Morningstar determined that Janus and Putnam were the two largest "wealth destroyers" during the decade, losing $58 billion and $46 billion, respectively. "Janus and Putnam rode the growth wave more than anyone else," Kinnel says. "They had some very aggressive funds that put up big numbers that got huge inflows." After the tech bubble burst, the funds that were most heavily invested in these types of holdings experienced huge sell-offs, which made it difficult for these funds to attract inflows through the remainder of the decade.
According to Morningstar, American Funds created about $191 million in wealth for investors during the decade, followed by Vanguard and Fidelity. Since American Funds generally employs a more value-oriented strategy, the firm was largely able to avert the first bear market of the decade. "The 2000 to 2002 bear market was all growth and tech, and American barely touched that, whereas they had lots of value, dividend payers, and bonds, which did very well," Kinnel says.
Recently, the tables have turned for American. In 2009, it lost the most of any fund family (more than $25 billion). No fund family, including American, was able to avoid the bear market of 2008. The same strategy that allowed American to bypass most of the first bear market failed because many well-known dividend-paying companies, like big financial firms, experienced huge losses.
thinkahol * on 19 Aug 11I've written before about the crisis of inequality in the United States and about the quasi-religious abhorrence of "wealth redistribution" that causes many Americans to oppose tax increases, even on the ultra rich. The conviction that taxation is intrinsically evil has achieved a sadomasochistic fervor in conservative circles-producing the Tea Party, their Republican zombies, and increasingly terrifying failures of governance. Happily, not all billionaires are content to hoard their money in silence. Earlier this week, Warren Buffett published an op-ed in the New York Times in which he criticized our current approach to raising revenue. As he has lamented many times before, he is taxed at a lower rate than his secretary is. Many conservatives pretend not to find this embarrassing. Conservatives view taxation as a species of theft-and to raise taxes, on anyone for any reason, is simply to steal more. Conservatives also believe that people become rich by creating value for others. Once rich, they cannot help but create more value by investing their wealth and spawning new jobs in the process. We should not punish our best and brightest for their success, and stealing their money is a form of punishment. Of course, this is just an economic cartoon. We don't have perfectly efficient markets, and many wealthy people don't create much in the way of value for others. In fact, as our recent financial crisis has shown, it is possible for a few people to become extraordinarily rich by wrecking the global economy. Nevertheless, the basic argument often holds: Many people have amassed fortunes because they (or their parent's, parent's, parents) created value. Steve Jobs resurrected Apple Computer and has since produced one gorgeous product after another. It isn't an accident that millions of us are happy to give him our money. But even in the ideal case, where obvious value has been created, how much wealth can one person be allowed to keep? A trillion doll
