You wouldn't want to make a loan to someone without knowing what you will earn on the loan. But if you own mutual funds or exchange-traded funds, you might be doing exactly that.
Hedge funds and other traders need to borrow stocks and bonds from time to time in order to execute their strategies. To do so, they often turn to mutual funds and ETFs. In return for lending their holdings, the funds pick up a bit of extra income.
But it is fiendishly difficult for shareholders in the funds to tell whether they are getting a square deal.
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