tailieunhanh - PROMOTING LONGER-TERM INVESTMENT BY INSTITUTIONAL INVESTORS: SELECTED ISSUES AND POLICIES *

The "efficiency" or "inefficiency" of a mutual fund portfolio, or the extent to which market impact costs and other expenses detract from its overall performance, may be estimated by comparing the fund's performance with some appropriate market index over some long period of time. For mutual funds invested in common stocks, the most commonly used index is the Standard &. | euRofi FINANCIAL SERVICES IN EUROPE EUROFI High Level Seminar 2011 Organised with the French Presidency of the G20 Paris 17-18 February 2011 OECD DISCUSSION NOTE PROMOTING LONGER-TERM INVESTMENT BY INSTITUTIONAL INVESTORS SELECTED ISSUES AND POLICIES This note has been drafted for the Eurofi high-level seminar on the benefits and challenges of a long term perspective in financial activities to be held in Paris on 17 February 2011. The note is designed to stimulate discussion on the benefits of long-term investing to growth sustainable development and financial stability and the barriers which may be preventing institutional investors from acting over such a time frame. Drawing on existing OECD work and guidelines the note also puts forward some initial policy suggestions for encouraging long-term investing. Further in-depth analysis and data collection will be undertaken by the OECD in the framework of its current programme of work s 11 ml 1 1 1 1 1 . z- . 1 Z-XT Z-5T-X n . Z 1 -IT - . ri i n Z-XT Z-5T-X The paper is issued under the responsibility of the OECD Secretary General. It does not necessarily reflect the opinion of OECD members. Comments are welcome. EXECUTIVE SUMMARY 1. The main institutional investors in the OECD pension funds insurance companies and mutual funds held over US 65 trillion at the end of 2009. Emerging economies generally face an even greater opportunity to develop their institutional investors sectors as with few exceptions their financial systems are largely bankbased. The main institutional investors in these countries are Sovereign Wealth Funds which held over US 4 trillion at the end of 2009. 2. The growing clout of institutional investors has brought a transformational change in financial systems. Traditionally these investors - and in particular pension funds life insurers and mutual funds that operate in retirement savings systems - have been seen as sources of long-term capital with investment portfolios built around the two main