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Non-indexed mutual funds try to keep it secret that actively managed mutual very funds rarely do better sto

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ck market indexes. The higher fees of the managed funds really make it hard for these funds to out compete

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

indexed funds. Smart financial journalists occasionally rat out fund managers for not educating the public

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

in this regard. When this happens the mutual fund managers make a feeble attempt at self defense by point

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ng to something called the 5% rule.

This rule says that for a fund to market itself as diversified it cann

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ot have more than 5% of 75% of the funds total assets in a single stock. In other words, a fund can have 2

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

5% of its holdings in a single stock, but the remaining 75% must follow the 5% rule. The 5% rule was creat

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

d by the Investment Company Act Requirement. Fund managers claim that this hampers their performance inste

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ad of admitting that they are in the business just to clip you for high fees while the mutual fund under-pe

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

rforms the general market.

The truth is that the big killer is the herd mentality of active fund managers.

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

They follow each other around buying and selling the same junk. They flock to the same familiar companies

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

and often overlook the new, obscure companies that show great promise. They take great comfort in knowing

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

that, even if their fund misses out on a great opportunity, most of the others in its group will too. The

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

y also know that they can pull their huge fees out during the whole time your retirement savings are parked

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

in their fund. Over the years they spend a lot of marketing money to make you think that they actually car

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

e.

That is certainly not the attitude I want the manager of my retirement to have! You should be asking y

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

our self why the mutual funds don’t just mimic the same portfolio stock composition as a major index like t

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

e S&P 500 stock market index. Well, some have and those that are indexed out perform actively managed fund

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

s at the minimum management cost. For this reason I strongly recommend that if you can only buy mutual fun

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

ds as in the case of the 401(k) then restrict your purchases to indexed funds like the Vanguard 500 (VFINX)

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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