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From Bloomberg News:
"Investors added $23.3 billion more to U.S. stock mutual funds than they withdrew in April, the Investment Company Institute said Thursday. Investors took out a net $7.8 billion from bond funds, the Washington-based trade group for the industry said in a monthly report."
According to Forbes:
"Legg Mason mutual fund guru Bill Miller, known for huge holdings of technology companies like Amazon.com Inc. (nasdaq: AMZN - news - people), said on Wednesday he has his sights on the much-anticipated sale of No. 1 search engine Google.
"Miller, who oversees Legg Mason's Value Trust fund which has outperformed the Standard & Poor's 500 index for 13 straight years, said he has not yet committed to a strategy for the upcoming initial public offering of Google stock.
"'I don't know what our answer will be but I have a sense of what that business is worth,' he said at a luncheon with reporters at Legg Mason's (nyse: LM - news - people) downtown Baltimore headquarters." Read more
From Bloomberg:
"Wells Fargo & Co., the fifth-biggest U.S. bank, agreed to buy the assets of Strong Capital Management Inc., the mutual fund company that last week settled allegations of engaging in improper trading.
"Assets under management at Strong Capital have declined about 20 percent since September as clients defected after New York Attorney General Eliot Spitzer identified the firm as one of four that allowed the Canary Capital Partners LLC hedge fund to make fund trades that hurt other investors." Read More
The new SEC regulation requires that fund managers report any investments they have made in their company's funds.
Bloomberg reports:
"The U.S. Securities and Exchange Commission, responding to trading abuses in the $7.6 trillion mutual fund industry, ordered the funds to adopt new ethics rules.
"Fund managers and advisers 'owe their clients more than mere honesty and good faith,' SEC Chairman William Donaldson said at a meeting in Washington. 'Recent experience suggests that all too many advisers were delivering less.'"
From the San Mateo County Times:
"THERE WAS A TIME, believe it or not, when investing in the stock market was simply a matter of choosing between individual stocks and managed, diversified stock mutual funds.
"The newest and most touted entry today is the exchange-traded fund (ETF), born in 1993, and now numbering more than 150 choices, with new ones emerging at a dizzying pace.
"An ETF is a basket of stocks that trade on an exchange -- and their heralded attributes are low cost, low annual fees since there's no manager to pay, tax-efficiency since there's no turn-over to create capital gains taxes, and trading flexibility since they are treated like stocks and can be traded any time during the day, unlike regular mutual funds that are priced once a day." Read More
According to the International Herald Tribune:
"Managers of some of the world's biggest stock hedge funds produced returns of more than 7 percent for clients during the first four months of the year, beating U.S. equity market benchmarks and reversing the underperformance of last year.
"The Maverick Fund, managed by Lee Ainsley, which had almost $10 billion in U.S. stocks at the end of the first quarter, was up 7.36 percent as of April 30. The Raptor Fund, managed by Jim Pallotta, climbed about 8 percent, and the Cantillon World fund, managed by William von Mueffling, rose about the same amount." Read more
From the Boston Herald:
"Research by Richard Green, a Carnegie Mellon University finance professor, found that smaller funds with skilled managers can outperform the market.
"It could be worth following the foray of Warren Buffett - one of the world's most successful investors -into the mutual fund business. Buffett's recent move to buy the Safeco group of mutual funds could make that business one to watch, suggests Fundalarm.com." Read More
A new original paper on the Mutual Fund Scandal (PDF) by James Atkinson at the University of Notre Dame investigates the wrongdoings of fund companies and what the SEC is doing to combat them.
According to Hedgeco:
"Deutsche Asset Management Company [DeAM] has announced a plan to offer leveraged funds of hedge funds. The new deal was reached with Tricom Equities, according to published reports. Tricom Equities will also be involved with the distribution of the new products, according to the released statements.
"The new DeAM absolute return product called the Strategic Value Fund will also be offered through DeAM’s vast distribution channels, as well as through those of Tricom, according to Glenn Poswell." Read more
Investor's Business Daily is reporting:
"Strong Capital Management, which last week agreed to settle allegations of improper mutual fund trading, said it is looking into "strategic alternatives" to maximize its value, including a possible sale of the company. [...]
"Strong and company founder Richard Strong agreed to pay $175 million to settle allegations of improper fund trading."
From Reuters:
"Mutual fund company Strong Capital Management Co. and its founder and main owner, Richard Strong, agreed to a $175 million settlement on Thursday to resolve securities fraud charges involving improper trading of mutual funds, according to state and federal regulators.
"The settlement is the latest in a year-old investigation of the mutual fund industry, but stands out from others because of the size of the penalty imposed on a single executive.
"'The size of the payment made by Richard Strong reflects the magnitude of the breach of trust he made as chairman and chief executive of the company,' New York Attorney General Eliot Spitzer told Reuters in an interview." Read More
From MarketWatch:
"While investors have pulled money from Magellan, they've put cash into Fidelity growth funds overall this year, with that group netting $4.4 billion through April, said Jim Lowell, editor of Fidelity Investor, an independent newsletter.
"While Magellan manager Robert Stansky's $65 billion fund had outflows exceeding $2 billion in each of the last four calendar years, Fidelity Spartan 500 Index Fund attracted cash each year, Lowell said. From Dec. 31, 1999 through April, Magellan has lost more than $15 billion to outflows, he said." Read More
From Investor's Business Daily:
"There was almost as much public hand-wringing as handshaking Wednesday at the mutual-fund industry's annual conference.
"'Collectively, we have no one to blame but ourselves for triggering the notoriety we received and the criticism we heard,' ICI Chairman Paul Haaga, Jr. told members.
"The fund business is suffering through as damaging a period as a bear market would bring." Read More
From Yahoo:
"The American Stock Exchange® (Amex®) will launch trading in options on Wednesday, May 19, 2004 on the underlying shares of the iShares Dow Jones U.S. Real Estate Index Fund.
"The iShares Dow Jones U.S. Real Estate Index Fund will open with strike prices of 80 through 100 in 1-point increments and position limits of 2,250,000 shares.
"The Fund's objective seeks investment results that correspond to the performance of the Dow Jones U.S. Real Estate Index." Read More
From MSN Money:
"Exchange-traded funds, which are essentially index mutual funds that can be bought and sold like stocks throughout the day on an exchange, have been getting a lot of attention lately.
"ETFs, which are not susceptible to the kind of trading abuses uncovered in the mutual fund industry since last fall, also have won a few converts among scandal-weary investors.
"One of the big knocks against ETFs, however, has always been that commission and trading costs can quickly turn their cost advantage into a disadvantage, especially for rapid traders or small investors who want to make regular, monthly contributions to their portfolios." Read More
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