Money Management Executive articles from February 2004

Money Management Executive archives from February 2004

Bond Group Offers Ways To Foil Analyst Conflicts.
February 2, 2004... To avert any potential scandals like those that have plagued equity analysts, the Bond Market Association has drafted its own guidelines for independent fixed income research. And these are slated for discussion this Friday at a BMA-sponsored...

The Fund Fee Bill is In the Mail'.
February 2, 2004... OXFORD, Miss. - The mutual fund fee bill is in the mail. And it should spell out, in hard dollars and cents, all the hidden costs of mutual funds, including 12b-1 fees. And these total costs can be so significant that in some cases they are...

SMAs Likely to Skirt Scandal: Campanale.
February 2, 2004... Separately managed account pioneer Frank Campanale doesn't see any outstanding areas where regulators might swoop in and shake up the industry's foundation like in the mutual fund arena - but thinks there is a small window that might draw...

Jack Bogle, Still at the Top of His Game.
February 2, 2004... Jack Bogle is in demand. Senators want his opinion. The best legal minds in the industry, including ICI Chairman Paul Haaga, are sparring with him (see mutual fund summit story, page one). Just last week, Bogle testified before the Senate...

MME Editorial Board.
February 2, 2004... The editors of Money Management Executive are forming an editorial board comprised of some of the leaders in the mutual fund, separately managed account, 401(k), 529 and alternative investment industries to help guide the publication. Or, to...

Expense Ratio Not Representative of Costs.
February 2, 2004... The true cost of owning a mutual fund is like a submerged iceberg - investors only see the portion of the costs that are visible to them and not what is hidden beneath the surface. Fund complexes are misleading investors, while inadequate...

Putnam Lowers Fund Fees, Increases Transparency.
February 2, 2004... Putnam Investments last Tuesday announced a host of initiatives to improve fund transparency and lower costs - which some reports estimate will reduce fees by some $35 million. The moves were voluntary and not a part of the firm's...

Spitzer Tells Legal Brethren Of Scandal's Historic Role.
February 2, 2004... NEW YORK - Emphasizing the increased role of state attorney generals in criminal enforcement, Eliot Spitzer distinguished between recent financial services industry scandals to a packed criminal justice section of the New York State Bar...

Putnam Paid $24 Million In Restitution, as $54B Walked Out the Door.
February 2, 2004... The million-dollar question of how much Putnam Investments paid to the SEC and other regulators in its settlement was answered last week - and it turned out to be a $24 million question. Putnam paid $24 million in restitution, legal and...

Bank of America Names Chief of Investor Platforms.
February 2, 2004... Bank of America announced in an internal memo recently that Keith Winn, the president of Bank of America Capital Management, has been named the investment product development and management executive for the organization expected to emerge from...

Morningstar to Build DB On Hedges, Private Equity.
February 2, 2004... Morningstar has announced plans to create a global hedge fund and private partnership database. The initiative responds to market demand for practical hedge fund information and analytics, the company said. The database is to include...

Hidden Fees Spell Trouble for Funds.
February 2, 2004... WASHINGTON- Excessive fees and inadequate disclosure represent far more serious threats to mutual fund shareholders than the trading abuses uncovered in recent months and will require more stringent legislation to remedy them. And it's time to...

President Bush Proposes 13% Budget Hike for SEC.
February 9, 2004... President Bush proposed last Monday a $913 million budget for the Securities and Exchange Commission, one that would represent a 13% increase in available funds for the regulatory agency. The budget consists of $893 million in new budget...

Haldeman's $54 Billion-Dollar Question: As Assets Walk, Putnam's New Leader Talks Performance, Profits and Penalties.
February 9, 2004... The harsh reality for Putnam Investments is that the firm has bled assets at an alarming rate, had sub-par portfolio performance the last few years, and upset the trust of investors and business partners due to developments of unchecked market...

CIBC Exec Arrested for Funding Late Trades: MFS, Artisan Among the Funds Timed.
February 9, 2004... Another casualty was added to the growing list of mutual fund criminals last Tuesday as a New York bank executive was hauled off in handcuffs for allegedly arranging $1 billion in financing for illegal mutual fund trades. Paul Flynn,...

SEC's Proposed Hard Close' Draws Critics.
February 9, 2004... The SEC's Dec. 11, 2003 proposal to end forward-pricing end runs around the 4 p.m. hard NAV close, has raised criticism from 401(k) plan sponsors, investors and administrators. Noting numerous instances where financial intermediaries or...

Mass. Pension Might Fire Fidelity for Performance.
February 9, 2004... Fidelity Investments might soon lose $475 million in assets that it runs for the Massachusetts state pension fund, Fidelity confirmed last week. Massachusetts' deputy CIO told Reuters that performance was the issue. Fidelity, which has...

Six B/Ds in Breakpoint Deal; To Pay Fines, Reimburse.
February 9, 2004... Six financial services companies, including UBS AG and Wachovia Corp., have reportedly agreed to settle SEC allegations that their brokers failed to give promised mutual fund discounts. The two banking companies are reportedly in talks with...

SEC Eyeing U.S. Bancorp Fund for Trading Activity.
February 9, 2004... U.S. Bancorp Asset Management last week indicated in an SEC filing it is cooperating with the SEC on an informal inquiry into trading activity in the First American Small Cap Growth Opportunities fund. Spokespeople for the company did not...

Alliance to Retool Ops; Fewer Funds, Jobs Seen.
February 9, 2004... Alliance Capital Management plans to overhaul its retail mutual fund business, a long-term initiative that may involve shrinking its fund lineup. Lewis Sanders, the company's chief executive, told analysts in a conference call that...

Morningstar to Investors: Shun More Market Timers, Including MFS, Scudder.
February 9, 2004... Morningstar already raised eyebrows when it told investors to think twice about keeping their money with Putnam, Janus, Alliance and Strong. And now the leading fund research firm has gone even further out on a limb. FleetBoston's Columbia...

Executive Moves.
February 9, 2004... DTCC Names Lewis New Marketing Director The Depository Trust & Clearing Corp., also known as DTCC, has hired Joan J. Lewis as its managing director of marketing. In the newly created position, Lewis will help the firm assess markets...

A Vanilla SMA That's Anything but Plain.
February 9, 2004... Until now, the low-end separately managed account marketplace has seemed a bit like a Baskin-Robbins shop where you could get everything but vanilla. But if Kevin Carter has his way, the SMA industry could soon be getting a long-awaited 32nd...

Yacktman's Take on Governance in Scandalous Times.
February 9, 2004... NEW YORK - Donald A. Yacktman, the president and chief investment officer of Yacktman Asset Management in Buffalo Grove, Ill., is no stranger to heated boardroom battles, and as the great bull run of the 1990s was reaching its heights, he made...

Outsourcing Responsible For 1/3 of Fido's Revenue.
February 16, 2004... The world's top mutual fund company has found that tabbing stocks is not the only way to make big money. For Fidelity Investments, outsourcing has grown so much that it is generating a third of the company's revenues, and the firm does not...

MFS a Good Company With a Bad Deal: Pozen: Firm's New Chairman Charged With Turning Company Around.
February 16, 2004... Robert Pozen, Massachusetts Financial Services' newest chairman, says the punishment doesn't fit the crime at his new firm. "Mass Financial is a good company that got a bad deal," Pozen said in a telephone interview. "This is not a...

Senate Bill Tackles Fees, 12b-1, Kickbacks.
February 16, 2004... Three U.S. Senators introduced new legislation last week aimed at reforming the $7.4 trillion mutual fund industry. The Mutual Fund Reform Act of 2004 would not only stamp out abusive trading practices but also overhaul the hidden fee structure...

Can Haldeman Convince the World That Putnam Has Changed?
February 16, 2004... BOSTON-Life after Lasser at Putnam Investments isn't as bad as it might appear from afar. A staple of Bean Town's financial district, Putnam is in the process of an "Extreme Makeover" after experiencing one of the biggest kicks in the teeth the...

Federated Profits Take 12%Hit in 4Q03 for Late Trades.
February 16, 2004... Investment management giant Federated Investors quarterly profits dropped 12% after taking a $20 million charge to cope with improper mutual fund trading. The Pittsburgh-based company said fourth-quarter net income fell to $42.8 million,...

Franklin Fires Back at Feds Over Rapid-Timing Trades.
February 16, 2004... Franklin Resources last week said that improper trading of its mutual fund shares were isolated incidents that do not reflect widespread company abuses and didn't harm long-term shareholders. The company was responding to Massachusetts...

Executive Moves.
February 16, 2004... Fassnacht to Take Over Vanguard Windsor Fund David R. Fassnacht will take the helm of the $19 billion Vanguard Windsor Fund. The move comes in connection with the announcement that Charles Freeman, 60, the head portfolio manager of the...

SMA Assets Moved Higher in Third Quarter : Average Account Size Jumps 12.5%.
February 16, 2004... Managed account assets have eclipsed the half-trillion dollar mark, as a robust rally in stocks and strong account growth bolstered the largely fee-based business. Assets held in separately managed accounts grew to $506.63 billion at the...

Hedge Inflows Quadruple, 03 Net Flows Reach $60B.
February 16, 2004... The global hedge-fund industry saw record inflows of an estimated $60 billion in net assets in 2003, according to a preliminary report by Tass, the research arm of U.K.-based Tremont Capital Management. The report noted that fourth-quarter...

ETF, Long-Term Assets Near $160B.
February 16, 2004... The combined assets of exchange-traded funds fell just shy of $160 billion in December, topping November's inflow of $132.7 billion and increasing nearly 50% on December 2002's inflow of $102.1 billion, according to the ICI. ETF shares...

Fidelity Says Not So Fast' To Independent Chair Push.(Edward C. Johnson III of Fidelity Investments)
February 23, 2004... The head of the world's No. 1 mutual fund company said last Tuesday that forcing firms to hire independent chairmen might not be the end-all solution to fixing problems in the industry. In an op-ed article published in The Wall Street...

Fund Auditor to Appeal SEC Sanction: McCurdy Vows to Fight for Reputation.(Securities and Exchange Commission)
February 23, 2004... James T. McCurdy, a 23-year veteran mutual fund auditor who was recently sanctioned by the Securities and Exchange Commission and given a one-year "time out" from the industry, has vowed to appeal that decision to the SEC's Commissioners, and...

Lifetime Payouts: Anyone, Anyone?
February 23, 2004... SCOTTSDALE, Ariz. - Investors and financial planners still have yet to uncover the tremendous benefits of annuity lifetime payouts but are slowly getting the message, thanks to such efforts as those of Ben Stein, this year's honorary chairman...

Fund Fee Disclosure Gets a Facelift.
February 23, 2004... Understanding mutual fund statements should be a heck of a lot easier now that federal regulators have okayed new disclosure rules that would spell out more clearly the fees imposed on shareholders. The SEC recently adopted a series of...

15 Firms Settle With SEC For Failed Breakpoints.(Brief Article)
February 23, 2004... Fifteen brokerages settled with the SEC and NASD for $21.5 million for not providing customers with $86 million worth of breakpoint discounts they were owed. The deal, struck earlier this month, also requires the firms to repay investors what...

Cali Investors Sue Franklin Over Market-Timing.(California, Franklin Resources Inc.)(Brief Article)
February 23, 2004... Franklin Resources' legal problems were extended to the tune of a massive class-action lawsuit filed by California investors. Filed by law firm Milberg Weiss Bershad Hynes & Lerach, the suit alleges Franklin's fund managers permitted...

Greenspan Downplays Need To Register Hedge Funds.(Alan Greenspan)(Brief Article)
February 23, 2004... Registering with the SEC should not be a requirement of hedge funds, at least not in the mind of Federal Reserve Chairman Alan Greenspan. Calling hedge funds helpful to the "internal flexibility of our financial system," Greenspan...

Navigating Change: Staying Ahead of Regulations and Consumer Demand in Dynamic Times.
February 23, 2004... It is said that the only constant is change. The past year has illustrated this point in the financial services industry, having brought conditions and concerns to light that are dramatically changing how fund firms do business. Eliot Spitzer's...

E*Trade 12b-1 Rebate Campaign, Staying Ahead of the Curve.(E*TRADE Financial Corp.)
February 23, 2004... There is something to be said for being in the right place at the right time. E*Trade Group announced an initiative to partially refund 12b-1 fees to investors using its service last summer, and the firm now has in place a rebate program...

Annuity Issuers Operating on Thin Margins.
February 23, 2004... Insurance company executives are going through a lot of contortions to make money in the variable insurance business today. They have to navigate the stock market and bond market, as well as regulatory, inflation and longevity risks to make...

Taking the Pain Out of Transfer of Assets Processing.
February 23, 2004... With trillions - that's trillions with a T' - of dollars in assets at stake, forward-looking mutual fund companies are honing their marketing efforts and developing improved products to take advantage of the coming boom in IRA rollovers. But in...

529 Plan Stakes Rise as do Changes, Asset Projections.
February 23, 2004... New York - The stakes are definitely higher today for all of those involved in sponsoring, managing and distributing tax-favored 529 college savings plans. That was the consensus among a panel of experts and members of the recently formed...

Executive Moves.(William Reynolds of T. Rowe Price Associates Inc. resigns)
February 23, 2004... T. Rowe Tabs Miller Director Fixed-Income, Reynolds to Retire in April Mary J. Miller, T. Rowe Price's assistant director of fixed-income, will be taking over for William Reynolds, director of the unit, who is retiring in April. ...