From Abnormal Returns, and worth reproducing in full:

Fund marketers and defunct economists:

There is an old saw on Wall Street that mutual funds are sold, not bought. Now read this quote by Keynes and substitute ‘fund marketer’ for ‘defunct economist.’

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. – John Maynard Keynes, The General Theory of Employment, Interest and Money, 1935. (via Wikiquote)

Given this perspective the story of how the SPDR Gold Trust (GLD) came into existence takes on a whole new meaning. Cam Simpson at Bloomberg has done a nice job relaying the history of the fund and its rise to prominence. The spectacularly successful fund was the brainchild of the gold mining industry that wanted to “sell gold as an investment to the masses.” Today the fund is a fixture in individual and institutional accounts alike.

Gold is not an isolated case. Every fund on the market today represents the joint effort of both fund managers and marketers alike. If you think you are free of the intellectual influence (and bias) of the investment management industry, think again. Indeed this influence is difficult to avoid in our super-saturated media environment. The challenge for every investor is to own their decision making process and not be unduly swayed by an industry whose goals are likely very different that your own.

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