The involution of mutual funds dictated by distribution networks

The first mutual fund under Italian law, launched on 20 June 1984, was a simple bond product. Forty years have passed since then and over time, with varying fortunes, the offer of mutual funds available to Italian savers has gradually increased to over 20,000 funds, and has now reached 57,525 with the various classes of the same product in the range offered by management companies.

In particular, the Italian asset management industry has undergone a profound transformation over the last 20 years, having reached its peak at the beginning of the new millennium. At that time, with demand plummeting, asset managers responded with new products, which still today do not always retain their simplicity and transparency. An innovation also dictated by the need to pamper the placers, to whom almost all the commissions collected are turned, and not by real investor needs.

The trend in recent years has brought mutual funds with a fixed maturity date to the forefront, which allow distributors to collect everything immediately, i.e. to receive commissions in advance (ranging between 3 and 5%) at the time of placement. Before even starting with the management activity. Moreover, the planned exit commission charged to individual participants, in the event of an early exit from the investment, could push the intermediary to move clients from one target fund to another early in order to earn more commission.

A potential distorting effect on products that are easily sold by offering the customer something similar to a BTp, which also often promises an attractive coupon stream for a number of years.

But if the coupon that the fund 'guarantees' is higher than the manager's return, the subscriber will still make a loss at maturity. And the coupons received are not the result of the returns achieved, but a simple repayment of the capital invested by the subscriber.+