Useful Articles

Investing in mutual funds is a relatively safe way of growing your net worth, but such investments are not entirely free of risks. Before you pick on any particular mutual fund for inv

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

estment you should watch out for a few things.

Performance

The first thing you should look for is whether the mutual fund you are planning to invest in is outperforming or under-perf

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

orming with respect to the market. Good and safe mutual funds are those that consistently outperform the market. Changes in the net asset values (NAVs) of such mutual funds are consist

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ently one step ahead of the market. For example, if the index that measures market movements goes up, the NAV of most good and safe mutual funds will also move up at least as much as t

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

he market or even more than the market. On the other hand, when the market moves southwards, the NAV of most good and safe mutual funds will move down but such depreciation will be les

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

than or at the most equal to the market’s downward movement. Unsafe or risky mutual funds are those where the opposite occurs – when the market moves up, the NAV of risky or unsafe mu

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

tual funds may move up less than the market and may even move down despite a bull run in the market. Such under-performing mutual funds should always be eschewed when taking an investm

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ent decision.

Churn and earn

The next thing to watch out for is whether the mutual fund is undergoing too much “churn and earn”. This means you have to check whether too many transac

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

tions by the mutual fund are resulting in higher fees or costs to the investor. In this context, the worst offenders are those mutual funds that have a lot of spurious churn. Every tim

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

e a mutual fund buys or sells stocks, the broker or brokers it employs make a neat pile from the commissions. So, these brokers try to encourage a lot of churn or buying and selling o

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

stocks by giving a kickback to the mutual fund manager. Although direct bribery is illegal, payment of soft money through a sponsored trip to Hawaii or letting the mutual fund manager

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

have a swanky Wall Street office for $1 a month is not. The only loser in all this spurious churn is the investor, especially in cases where the small print says that the investor wil

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

l have to pay the brokers’ fees as well.

Lack of clarity

Mutual Funds that have prospectus, annual reports or statements of additional information written in such a way that they are

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

difficult to understand should also be avoided. The lack of clarity in their documents is almost a sure sign of lack of honesty in their dealings or a lack of competency in managing f

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

unds – both of which are strong reasons for avoiding them for investment purposes.

Risky and unsafe mutual funds are also characterised by having too many restrictions on how and when

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

investors can sell or redeem their mutual fund shares. Mutual funds that have too long lock-in periods or those which slap a hefty exit load at the time of redemption should be eyed wi

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

th suspicion and are likely to prove to be unsafe and risky.

Beware of scams

Finally, there are mutual funds that are outright scams. There have been reports of fund mangers selling

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

stocks at prices other than what has been reported to the investor. For example, the fund manager may have sold stock at prices that prevailed before closing of the day’s trade althoug

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

h the investor is told that the transaction took place at closing prices which were lower. The manager then pockets the difference and with most such transactions involving large volum

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

es, even a fractional price difference can lead to substantial gains for the manger. Again the only loser in all this is the investor who gets short-changed by the mutual fund operator

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.usefularticles.org.ua/article/117525/usefularticles-Mutual-Funds-and-Their-Risks.html">Mutual Funds and Their Risks</a>

BB link (for phorums):
[url=http://www.usefularticles.org.ua/article/117525/usefularticles-Mutual-Funds-and-Their-Risks.html]Mutual Funds and Their Risks[/url]

Do you constantly find yourself battling with your customers on price? Are you losing sales that you were sure you were going to get? If you want to start winning more sales, you need to stop selling to customers and start consulting for clients.

Americans are more concerned about identity theft than unemployment or corporate fraud, according to a survey of 2,000 people conducted by Star Systems. Nine out of ten Americans demand new federal ...

Understanding how the economy works isn’t the only fundamental analysis tools that are important while trading stocks. You also need to read financial statements to understand the financial status of the companies you want to buy. A Company’s income statements on the other hand give you a look at the results of the most recent period and provide a basis for comparison with prior years and periods. You can use these statements to look at whether revenues are growing, and if they are by what percentage. You also can see how much profit the company is keeping from the revenue it generates.

Tags

Links

Useful Articles - Mutual Funds and Their Risks

Related Articles: