economics

Must reading to learn the ins and outs of the industry .

Ever since I began work in the mutual fund industry six years ago, I've looked for books that would increase my understanding of the industry. Many books tell you how to invest in mutual funds and a couple attempt to describe (but in my view unsuccessfully) how the industry works. This week I found and read Gremillion's book on mutual funds. And I was amazed. It's all there. History of the industry, the laws that affect it, how funds are manufactured and distributed, e-business and a lot more. I really enjoyed reading the author's impartial discussion of industry issues like the debate over fees and expenses, active vs. passive management, and the state of the market.

Gremillion's clear and concise writing makes his book an interesting and easy read. Too bad it wasn't available when I was in college.

This book is written in a clear, non-academic, and easy-to-follow style. And even though he generally speaks well of the industry, the author does not sugar-coat it. A number of illustrative anecdotes (the book is full of these) describe less than exemplary behavior, such as how one Minneapolis money manager ran his funds into the ground speculating on interest rate movements.

The book is full of data as well. For example, the author doesn't just tell about how much a few star portfolio managers get in compensation. When he discusses what investment managers get paid, he includes the results from an industry survey that show averages and ranges for a variety of positions. John Bogle appropriately calls the book "authoritative" in his foreword.