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56-401: The Templeton Prize is an annual award granted to a living person, in the estimation of the judges, "whose exemplary achievements advance Sir John Templeton 's philanthropic vision: harnessing the power of the sciences to explore the deepest questions of the universe and humankind's place and purpose within it." It was established, funded and administered by John Templeton starting in 1972. It

112-529: A Rhodes Scholar and earned an M.A. in law. He was a CFA charterholder and was a student of the "father of value investing ", Benjamin Graham . In 1939, Templeton, during the Depression of the 1930s, had his broker purchase 100 shares of each NYSE -listed company which was then selling for less than $ 1 a share (equivalent to $ 22 in 2,023) (104 companies, 34 in bankruptcy, in 1939), later making many times

168-409: A limited life span, established at creation. Investors can redeem shares directly with the fund at any time (similar to an open-end fund) or wait to redeem them upon the trust's termination. Less commonly, they can sell their shares in the open market. Unlike other types of mutual funds, unit investment trusts do not have a professional investment manager. Their portfolio of securities is established at

224-496: A modern mutual fund was the Boston Personal Property Trust that was founded in 1893; however, its original intent was as a workaround to Massachusetts law restricting corporate real estate holdings rather than investing. Early U.S. funds were generally closed-end funds with a fixed number of shares that often traded at prices above the portfolio net asset value . The first open-end mutual fund with redeemable shares

280-644: A mutual recognition regime that allows funds regulated in one country to be sold in all other countries in the European Union, if they comply with certain requirements. The directive establishing this regime is the Undertakings for Collective Investment in Transferable Securities Directive 2009 , and funds that comply with its requirements are known as UCITS funds. Regulation of mutual funds in Canada

336-480: A net asset value based on the value of the securities held in the funds. In the United States, at the end of 2019, assets in money market funds were $ 3.6 trillion, representing 14% of the industry. Bond funds invest in fixed income or debt securities. Bond funds can be sub-classified according to: In the United States, at the end of 2019, assets in bond funds (of all types) were $ 5.7 trillion, representing 22% of

392-449: A substitute for bank savings accounts , though money market funds are not insured by the government, unlike bank savings accounts. In the United States, money market funds sold to retail investors and those investing in government securities may maintain a stable net asset value of $ 1 per share, when they comply with certain conditions. Money market funds sold to institutional investors that invest in non-government securities must compute

448-522: A trust named Eendragt Maakt Magt ("unity creates strength"). His aim was to provide small investors with an opportunity to diversify. The first investment trust in the UK, the Scottish American Investment Trust formed in 1873, is considered the "most obvious progenitor" to the mutual fund, according to Diana B. Henriques . One of the earliest investment companies in the U.S. similar to

504-466: Is now called the "Vanguard 500 Index Fund" and is one of the largest mutual funds. Beginning the 1980s, the mutual fund industry began a period of growth. According to Robert Pozen and Theresa Hamacher, growth was the result of three factors: The 2003 mutual fund scandal involved unequal treatment of fund shareholders whereby some fund management companies allowed favored investors to engage in prohibited late trading or market timing . The scandal

560-543: Is now co-funded by the John Templeton Foundation , Templeton Religion Trust, and Templeton World Charity Foundation, and administered by the John Templeton Foundation. The prize was originally awarded to people working in the field of religion ( Mother Teresa was the first winner), but in the 1980s the scope broadened to include people working at the intersection of science and religion. Until 2001,

616-636: Is primarily governed by National Instrument 81-102 "Mutual Funds", which is implemented separately in each province or territory. The Canadian Securities Administrator works to harmonize regulation across Canada. In the Hong Kong market mutual funds are regulated by two authorities: In Taiwan, mutual funds are regulated by the Financial Supervisory Commission (FSC). Mutual funds in India are regulated by Securities and Exchange Board of India ,

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672-507: Is targeted at different investors, with hedge funds being available only to high-net-worth individuals. At the end of 2020, open-end mutual fund assets worldwide were $ 63.1 trillion . The countries with the largest mutual fund industries are: At the end of 2019, 23% of household financial assets were invested in mutual funds. Mutual funds accounted for approximately 50% of the assets in individual retirement accounts, 401(k)s and other similar retirement plans. Luxembourg and Ireland are

728-575: The Nobel Prizes ; Templeton felt, according to The Economist , that "spirituality was ignored" in the Nobel Prizes. As of 2019, it is £1.1 million. It was typically been presented by Prince Philip in a ceremony at Buckingham Palace . The prize has been referred to as prestigious and coveted, with The Washington Post calling it the most prestigious award in religion. Atheist scientists Richard Dawkins , Harry Kroto and Jerry Coyne have criticized

784-670: The Shiller P/E , rebalancing and Tobin's q . Despite the name of his flagship fund, Templeton Growth Fund , he was more a practitioner of value investing rather than growth investing . However, his stock-selection strategies could be eclectic and often defied easy categorization other than avoiding stocks he considered expensive, defined as an estimated five-year forward price to earnings ratio higher than about 12-14. Templeton focused on buying stocks he calculated were substantially undervalued, holding them until selling when their price rose to fair market value. His average holding period

840-539: The net asset value (NAV) computed that day based upon the prices of the securities owned by the fund. In the United States, open-end funds must be willing to buy back shares at the end of every business day. In other jurisdictions, open-end funds may only be required to buy back shares at longer intervals. For example, UCITS funds in Europe are only required to accept redemptions twice each month (though most UCITS accept redemptions daily). Most open-end funds also sell shares to

896-461: The 1970s and turned to US stocks when they were at historic lows. Templeton's flagship fund outperformed a global stock index by an average of three percent a year for his entire career, and by over six percent a year for the period after his relocation to the Bahamas. Typical of value-oriented investors, Templeton often had disappointing results during bull markets due to his avoidance of hot stocks of

952-577: The John Templeton Foundation and the Templeton World Charity Foundation. While all three organizations have similar aims, they operate as separate charitable entities. As a member of the Presbyterian Church, Templeton was dedicated to his faith. However, Templeton eschewed dogma and declared relatively little was known about the divine through scripture, espousing what he called a "humble approach" to theology and remaining open to

1008-402: The John Templeton Foundation. As a philanthropist, Templeton established: Templeton College is closely associated with Oxford's Saïd Business School . In 2007, Templeton College transferred its executive education program to Saïd Business School. In 2008, Templeton College merged with Green College to form Green Templeton College . This is one of the exceptional mergers in recent history of

1064-742: The United States, stating he intended to live out his life in the Bahamas and felt obligated. He held dual naturalised Bahamian and British citizenship and lived in the Bahamas full-time from 1968. His neighbors included Joe Lewis , Sean Connery , Arthur Hailey , and Fahad Al Sabah . Uninterested in consumerism, Templeton lived relatively frugally and never flew first-class. A friend jokingly described Templeton as Calvinist in his approach to wealth: "He believes it's okay to make money so long as you don't enjoy it." On 8 July 2008, Templeton died at Doctors Hospital in Nassau, Bahamas , of pneumonia at 12:20. He

1120-429: The United States, the principal laws governing mutual funds are: Mutual funds are overseen by a board of directors if organized as a corporation, or by a board of trustees , if organized as a trust. The Board must ensure that the fund is managed in the interests of the fund's investors. The board hires the fund manager and other service providers to the fund. The sponsor or fund management company often referred to as

1176-743: The University of Oxford. He was created a Knight Bachelor in 1987 for his philanthropic efforts. Templeton was inducted into the Junior Achievement US Business Hall of Fame in 1996, and in 2003 awarded the William E. Simon Prize for Philanthropic Leadership . Templeton Religion Trust (TRT) is a global charitable trust chartered by Sir John Templeton in 1984, with headquarters in Nassau, The Bahamas, where Sir John lived until his death in 2008. TRT has been active since 2012 and supports projects and

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1232-559: The answers to such questions through "explorations into the laws of nature and the universe, to questions on the nature of love, gratitude, forgiveness, and creativity." In an interview published in the Financial Intelligence Report in 2005, Templeton asserts that the purpose of the John Templeton Foundation is as follows: "We are trying to persuade people that no human has yet grasped 1% of what can be known about spiritual realities. So we are encouraging people to start using

1288-578: The benefits and values of other faiths. Commenting on his commitment to what he called spiritual progress, "But why shouldn't I try to learn more? Why shouldn't I go to Hindu services? Why shouldn't I go to Muslim services? If you are not egotistical, you will welcome the opportunity to learn more." Similarly, one of the major goals of the John Templeton Foundation is to proliferate the monetary support of spiritual discoveries. The John Templeton Foundation encourages research into "big questions" by awarding philanthropic aid to institutions and people who pursue

1344-601: The couple had three children: John , Anne, and Christopher. Judith Templeton died in February 1951 in a motorbike accident. He remarried, to Irene Reynolds Butler in 1958; she died in 1993. A Christian, he was a lifelong member of the Presbyterian Church . He served as an elder of the First Presbyterian Church of Englewood (Englewood, New Jersey). He was a trustee on the board of Princeton Theological Seminary ,

1400-488: The creation of the UIT. In the United States, at the end of 2019, there were 4,571 UITs with combined assets of less than $ 0.1 trillion. Closed-end funds generally issue shares to the public only once, when they are created through an initial public offering . Their shares are then publicly listed. Investors who want to sell their shares must sell their shares to another investor in the market; they cannot sell their shares back to

1456-463: The development of open-end mutual funds (as opposed to closed-end funds). In 1936, U.S. mutual fund industry was nearly half as large as closed-end investment trusts. But mutual funds had grown to twice as large as closed-end funds by 1947; growth would accelerate to ten times as much by 1959. In terms of dollar amounts, mutual funds in the U.S. totaled $ 2 billion in value in 1950 and about $ 17 billion in 1960. The introduction of money market funds in

1512-409: The dissemination of results from projects seeking to enrich the conversation about religion via three broad initiatives: TRT's aim is to improve the well-being of individuals and societies through spiritual growth and an ever-improving understanding of spiritual realities and spiritual information. TRT is the first of three charitable entities established by Sir John Templeton. The other entities are

1568-431: The fund manager, trades (buys and sells) the fund's investments in accordance with the fund's investment objective. Funds that are managed by the same company under the same brand are known as a fund family or fund complex. A fund manager must be a registered investment adviser . In the European Union, funds are governed by laws and regulations established by their home country. However, the European Union has established

1624-442: The fund's investment objective, investment approach and permitted investments. The investment objective describes the type of income that the fund seeks. For example, a capital appreciation fund generally looks to earn most of its returns from increases in the prices of the securities it holds, rather than from dividend or interest income. The investment approach describes the criteria that the fund manager uses to select investments for

1680-442: The fund. Bond, stock, and hybrid funds may be classified as either index (or passively-managed) funds or actively managed funds. Alternative investments which incorporate advanced techniques such as hedging known as "liquid alternatives". Money market funds invest in money market instruments, which are fixed income securities with a very short time to maturity and high credit quality. Investors often use money market funds as

1736-427: The fund. The price that investors receive for their shares may be significantly different from NAV; it may be at a "premium" to NAV (i.e., higher than NAV) or, more commonly, at a "discount" to NAV (i.e., lower than NAV). In the United States, at the end of 2019, there were 500 closed-end mutual funds with combined assets of $ 0.28 trillion. Mutual funds may be classified by their principal investments, as described in

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1792-533: The greatest global stock picker of the century". Templeton attributed much of his success to his ability to maintain an elevated mood, avoid anxiety and stay disciplined. He rejected technical analysis for stock trading, preferring instead to use fundamental analysis . Thus he did not attempt to predict future stock movements, but paid close attention to valuation . From the late 1930s Templeton and his colleagues developed sophisticated quantitative finance methods that anticipated by decades common features such as

1848-570: The high-interest rate environment of the late 1970s boosted industry growth dramatically. The first retail index funds appeared in the early 1970s, aiming to capture average market returns rather than doing detailed company-by-company analysis as earlier funds had done. Rex Sinquefield offered the first S&P 500 index fund to the general public starting in 1973, while employed at American National Bank of Chicago. Sinquefield's fund had $ 12 billion in assets after its first seven years. John "Mac" McQuown also began an index fund in 1973, though it

1904-958: The issuer at the net asset value of each share as of the close of the trading day in which the order was placed, as long as the order was placed within a specified period before the close of trading. They can be traded directly with the issuer. Mutual funds have advantages and disadvantages compared to direct investing in individual securities. The advantages of mutual funds include economies of scale , diversification, liquidity, and professional management. As with other types of investment, investing in mutual funds involves various fees and expenses . Mutual funds are regulated by governmental bodies and are required to publish information including performance, comparisons of performance to benchmarks, fees charged, and securities held. A single mutual fund may have several share classes, for which larger investors pay lower fees. Hedge funds and exchange-traded funds are not typically referred to as mutual funds, and each

1960-476: The largest Presbyterian seminary, for 42 years and served as its chair for 12 years. In 1964, Templeton renounced his US citizenship , which some sources claim was a strategy to minimize taxes (the United States taxes citizens globally regardless of residency under FATCA ). However, in a 1997 interview with Charlie Rose , Templeton asserted the Bahamas had a higher tax rate than the United States and denied he renounced his citizenship to avoid paying taxes to

2016-443: The moment. His outperformance typically came during crashes and bear markets when his fund suffered smaller losses than average, or had modest gains relative to the broad market. In 2005, he wrote a brief memorandum predicting that within five years there would be financial chaos in the world, anticipating a collapse of the housing market and decline in yields on government-issued bonds to near zero. Templeton also predicted within

2072-407: The money back when US industry picked up as a result of World War II . According to Templeton, he called his broker the day World War II began and instructed him to make the purchases. This stratagem helped make him a wealthy man. Templeton became a billionaire by pioneering the use of globally diversified mutual funds . His Templeton Growth Fund , Ltd. ( investment fund ), established in 1954,

2128-453: The name of the prize was "Templeton Prize for Progress in Religion", and from 2002 to 2008 it was called the "Templeton Prize for Progress Toward Research or Discoveries about Spiritual Realities". Hindus , Christians , Jews , Buddhists and Muslims have been on the panel of judges and have been recipients of the prize. The monetary value of the prize is adjusted so that it exceeds that of

2184-426: The next few decades a major decrease in traditional schooling due to internet-based learning options. Initially privately circulated to family and a small number of Franklin-Templeton management, the memo was eventually made public in 2010. Templeton was a Chartered Financial Analyst (CFA) charter-holder. He received AIMR's first award for professional excellence in 1991. Templeton married Judith Folk in 1937, and

2240-447: The performance of an index, such as a stock market index or bond market index , or actively managed funds, which seek to outperform stock market indices but generally charge higher fees. The primary structures of mutual funds are open-end funds , closed-end funds , and unit investment trusts . Over long durations passively managed funds consistently overperform actively managed funds. Open-end funds are purchased from or sold to

2296-533: The primary jurisdictions for the registration of UCITS funds. These funds may be sold throughout the European Union and in other countries that have adopted mutual recognition regimes. The first modern investment funds , the precursor of mutual funds, were established in the Dutch Republic . In response to the financial crisis of 1772–1773 , Amsterdam-based businessman Abraham (or Adriaan) van Ketwich formed

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2352-569: The prize as "blurring [religion's] well-demarcated border with science" and being awarded "to scientists who are either religious themselves or say nice things about religion", a criticism rejected by 2011 laureate Martin Rees , who pointed to his own and other laureates' atheism and that their research in fields such as psychology, evolutionary biology, and economy can hardly be classified as the "promotion of religion". Sir John Templeton Sir John Marks Templeton (29 November 1912 – 8 July 2008)

2408-422: The prospectus and investment objective. The four main categories of funds are money market funds, bond or fixed-income funds, stock or equity funds, and hybrid funds. Within these categories, funds may be sub-classified by investment objective, investment approach, or specific focus. The types of securities that a particular fund may invest in are set forth in the fund's prospectus , a legal document that describes

2464-401: The public every business day; these shares are priced at NAV. Open-end funds are often referred to simply as "mutual funds". In the United States at the end of 2019, there were 7,945 open-end mutual funds with combined assets of $ 21.3 trillion, accounting for 83% of the U.S. industry. Unit investment trusts (UITs) are issued to the public only once when they are created. UITs generally have

2520-993: The regulator of the securities and commodity market owned by the Government of India, under the SEBI (Mutual Funds) regulations of 1996. The functional aspect of Mutual Funds industry comes under the purview of AMFI , a trade association of all fund houses. Formed in August 1995, the body undertook the Mutual Funds Sahi hai campaign in March 2017 for promoting investor awareness on mutual funds in India. There are three primary structures of mutual funds: open-end funds , unit investment trusts , and closed-end funds . Exchange-traded funds (ETFs) are open-end funds or unit investment trusts that trade on an exchange. Open-end mutual funds must be willing to buy back ("redeem") their shares from their investors at

2576-469: The same methods of science that have been so productive in other areas, in order to discover spiritual realities." In 2004, Templeton donated an additional $ 550 million to the foundation. Mutual fund Mutual funds are often classified by their principal investments: money market funds , bond or fixed income funds , stock or equity funds , or hybrid funds. Funds may also be categorized as index funds , which are passively managed funds that track

2632-573: Was 95, and was survived by his children, Anne, Christopher and John. John Templeton Jr. has since died, in 2015, of brain cancer. Templeton was one of the most generous philanthropists in history, giving away over $ 1 billion to charitable causes. In 2007, Templeton was named to the Time 100 list as one of the world's 100 Most Influential People by Time under the category of "Power Givers". Time cited his "pursuit of spiritual understanding, often through scientific research" through his establishment of

2688-411: Was about four years. He believed holding assets priced above fair market value in hopes they would further increase in price was speculation, not investing. However, Templeton did not buy stocks merely because they were undervalued but also took care investing in companies he determined were profitable, well-managed and with good long-term potential. By emphasizing overlooked or unpopular stocks Templeton

2744-536: Was among the first American firms to invest in Japan starting in the mid-1960s. Templeton also created funds specifically in certain industries such as nuclear energy, chemicals, and electronics. By 1959, Templeton's company made their initial public offering , with five funds and more than 66 million dollars under management. In 2006 he was listed in a seven-way tie for 129th place on The Sunday Times ' s " Rich List ". Money magazine in 1999 called him "arguably

2800-466: Was an American-born British investor , banker, fund manager , and philanthropist. In 1954, he entered the mutual fund market and created the Templeton Growth Fund , which averaged growth over 15% per year for 38 years. A pioneer of emerging market investing in the 1960s, Money magazine named him "arguably the greatest global stock picker of the century" in 1999. John Marks Templeton

2856-478: Was born in the town of Winchester, Tennessee , and attended Yale University , where he was an assistant business manager for campus humor magazine Yale Record and was selected for membership in the Elihu society. He financed his tuition with a scholarship, odd jobs and winnings from playing poker , a game at which he excelled. He graduated in 1934 near the top of his class. He attended Balliol College, Oxford , as

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2912-648: Was established on March 21, 1924, as the Massachusetts Investors Trust, which is still in existence today and managed by MFS Investment Management . In the U.S., there were nearly six times as many closed-end funds as mutual funds in 1929. After the Wall Street Crash of 1929 , the United States Congress passed a series of acts regulating the securities markets in general and mutual funds in particular. These new regulations encouraged

2968-424: Was in many ways a contrarian and became known for his "avoiding the herd" and "buy when there's blood in the streets" philosophy to take advantage of market turmoil. He also was known for taking profits when values and expectations were high. His time at Oxford started an interest in global investing, which was uncommon in the United States but more popular in the UK due to the widespread British Empire . Templeton

3024-496: Was one of the earliest American investors to devote substantial focus to investment opportunities in then-overlooked foreign markets such as Asia and Eastern Europe. He was such early investor in Japan during the 1950s that he had difficulty finding bi-lingual stockbrokers in either Japan or the United States to handle his firm's trades. Always on the lookout for bargain-priced stocks and hoping to avoid expensive stocks, he rotated out of Japanese stocks as they became more fashionable in

3080-517: Was part of a large pension fund managed by Wells Fargo and not open to the general public. Batterymarch Financial, a small Boston firm then employing Jeremy Grantham , also offered index funds beginning in 1973 but it was such a revolutionary concept they did not have paying customers for over a year. John Bogle was another early pioneer of index funds with the First Index Investment Trust, formed in 1976 by The Vanguard Group ; it

3136-645: Was uncovered by former New York Attorney General Eliot Spitzer and led to an increase in regulation. In a 2007 study about German mutual funds, Johannes Gomolka and Ralf Jasny found statistical evidence of illegal time zone arbitrage in trading of German mutual funds. Though reported to regulators, BaFin never commented on these results. Like other types of investment funds, mutual funds have advantages and disadvantages compared to alternative structures or investing directly in individual securities. According to Robert Pozen and Theresa Hamacher, these are: Mutual funds have disadvantages as well, which include: In

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