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By Bridget B. Hughes, CFA | 03-28-2011 10:03 AM

Pozen: Much Change for Fund Industry in Last Decade

MFS chairman emeritus and author Bob Pozen discusses the trends toward international investing, ETFs, dedicated asset managers, and trading processes.

Bridget Hughes: Hi, my name is Bridget Hughes. I am one of the fund analysts here at Morningstar. I am here today with Bob Pozen, who is the chairman emeritus of MFS Investment Management. He is also the co-author of a new book called "The Fund Industry: How Your Money is Managed."

Bob, thanks so much for being with us today.

Robert Pozen: Glad to be here.

Hughes: So, you have written a book on the fund industry before, nine years ago. This time you have included a few chapters specifically geared toward individual investors. Why did you think that was important to do?

Pozen: I think that the individual investor is, obviously, a big component of the industry, there are millions of them, and I guess I believe that a lot of those investors need something more than Mutual Fund for Dummies. That they actually want to know how their funds are managed and what's happening behind the scenes. Of course, they can just look and see, "well what was the return last year?" But I think that there is a growing appetite for a fuller understanding.

In particular, one thing that I noticed was that lots of investors feel overwhelmed by all the information they get, there are so many prospectuses, annual reports etc. And one of the things we've tried to do in this book is tell investors, here are all the documents you get, but here are the ones to look at, and within those documents, here are the specific things that are really going to be important to you. So, don't feel overwhelmed. Here is a guide map to what to look for.

Another thing is, lots of investors are confused about all the different measurement systems. Morningstar has an excellent system as do others, but they don't really know what they mean, how do you use them. So we try to explain to investors what are the tools that are available to them, and how they can use those tools. So, I think that's another big service that we are doing for investors, and hopefully they'll like it.

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