Money Management Executive articles from May 2005

Money Management Executive archives from May 2005

American Funds Overtakes Fidelity to Become No. 2: Stock, Bond Funds Reap $29B.(Brief Article)
May 2, 2005... After months of chipping away at the nation's biggest fund company, American Funds finally surpassed Fidelity Investments as the second-largest U.S. fund group in March, according to data from Financial Research Corp released last Wednesday....

$28.4 Billion in Overall Flows.
May 2, 2005... Overall, inflows in stock and bond mutual funds, or long-term funds, rose 15% in March from the previous month, jumping to $28.4 billion from $24.6 billion in February. International and global funds once again led the charge, bringing in...

GAO Points Finger at SEC for Fund Abuse: Says Commission Missed Market-Timing Clues.(Government Accountability Office)
May 2, 2005... A report released on April 22 from the U.S. Government Accountability Office (GAO) in Washington, gives the Securities and Exchange Commission a lukewarm grade of "C" in its lack of detecting the market-timing abuses that plagued the mutual...

MFS Chairman Outlines Social Security Fix.(Robert Pozen)
May 2, 2005... MFS Investment Management Chairman Robert Pozen detailed his "progressive indexing" proposal before the Senate Finance Committee in Washington on Tuesday, claiming it could close the long-term deficit dilemma confronting Social Security by more...

NAIC Broker Comp Rules Under Fire.(National Association of Insurance Commissioners)
May 2, 2005... A proposed amendment to the already-adopted National Association of Insurance Commissioners' (NAIC) model legislation calling for broker disclosure is already raising serious concerns. At the center of the controversy is the amendment's...

ETF Assets Rise 2.2%: ICI.(Brief Article)
May 2, 2005... Total assets in the nation's exchange-traded funds in March reached $228.7 billion, up 2.2% from $223.86 billion in February, according to the Investment Company Institute. While assets of almost all ETFs went up, assets of equity index...

Fidelity Investments Juggles Large-Cap, Select Skippers.(Brief Article)
May 2, 2005... Starting this week, Fidelity Investments will implement a handful of new appointments. Matthew W. Fruhan has been named portfolio manager of Fidelity Large Cap Stock Fund. Fruhan, who will succeed Karen Firestone, has managed Fidelity Select...

Executive Moves.(appointments, promotions etc.,)
May 2, 2005... Lord Abbett Taps Bartlett as Director of Growth Equity Lord Abbett & Co. has hired Bruce Bartlett as director of growth equity investments and portfolio manager of the company's large-cap growth fund. Bartlett most recently worked for...

New York Life Ads Sell Company You Keep'.(New York Life Asset Management)
May 2, 2005... Some may consider values like financial strength, integrity and humanity a bit stodgy for an advertising campaign by a financial services company in the 21st century, but not at New York Life. At the end of January, the 160-year-old firm...

Nuveen May Launch Hedged ETF.(Nuveen Equity Premium Advantage Fund)(Brief Article)
May 2, 2005... Nuveen Investments plans to launch a new closed-end exchange-traded fund this month that will invest in call and put options in order to enhance performance and hedge against downside risk. It will be called the Nuveen Equity Premium Advantage...

Fidelity to Close Int'l Small Cap Fund.(Fidelity Investments is closing International Small Cap Fund )(Brief Article)
May 2, 2005... Fidelity Investments is closing its $2.1 billion International Small Cap Fund on May 5 to most new investors after assets increased almost threefold since the beginning of 2004. The fund has attracted $500 million in net new investments...

Privatization, Ignorance A Dangerous Combination.(Brief Article)
May 2, 2005... Privatization of Social Security could be very risky business, considering that personal accounts would put money in the hands of many Americans who are woefully ignorant of the basics of the economic system and common investment vehicles, such...

SEC Urges Funds to Use XBRL Coding.(Securities and Exchange Commission)(eXtensible Business Reporting Language)(Brief Article)
May 2, 2005... The Securities and Exchange Commission is urging mutual funds to utilize its newly launched volunteer program to report key financial information via Microsoft's eXtensible Business Reporting Language (XBRL), a code that enables documents to be...

MFS Chairman Anticipates Painful Political Wrangle Over Social Security Plans.(Robert C. Pozen)
May 9, 2005... MFS Investment Management Chairman Robert C. Pozen, architect of a strategy that President Bush would like to use as the basis for Social Security reform, is now urging lawmakers to move beyond the headline-grabbing issue of private accounts...

Bottom Line: The Scandal Cost Everyone Investors, Fund Firms Share Losses.
May 9, 2005... At first blush, the numbers are indeed impressive. According to government figures as of Feb. 28, the Securities and Exchange Commission has brought 25 enforcement actions related to the market timing and late trading scandal and obtained...

SEC Alum Living Life in the Trenches Aims to Restore Credibility to Tainted Firm.(Interview)
May 9, 2005... Cindy Fornelli is walking the walk. The former deputy director of the SEC's division of investment management who helped engineer a bulk of the new regulations governing mutual funds now has skin in the game, as she toils in the compliance...

Sihpol Opening Defense Argues Total Innocence.(Theodore Sihpol III)(Brief Article)
May 9, 2005... Theodore Sihpol III, an ex-broker for Bank of America, either knowingly participated in hedge fund Canary Capital Partners' illegal mutual fund trading, and profited from it, or was a mere "order taker" who "stole nothing," and had no idea...

VARDS Office Closing: Founder Parting Ways with New Owner.(Variable Annuity Research and Data Service, Rick Carey)
May 9, 2005... It looks like VARDS' move to Morningstar is truly its last, but this time it loses its founder and most of its staff. The Variable Annuity Research and Data Service, started by Rick Carey in 1988, has been semi-nomadic since 2000, when...

Paul Roye Lands Out West; Joins Capital's Legal Staff.(Capital Research and Management Co.)(Brief Article)
May 9, 2005... Paul Roye, former top mutual fund regulator at the Securities and Exchange Commission ended months of speculation last week by announcing that he's going to work for mutual fund giant Capital Research & Management. Roye, who stepped down...

New Integrity Mutual Fund Hunts for the Undervalued.(launches Integrity Growth and Income Fund)(Brief Article)
May 9, 2005... Integrity Mutual Funds, a Minot, Tenn.-based mutual fund and financial services company, has launched a new free cash flow fund, the Integrity Growth & Income Fund. The fund was launched in partnership with IPS Advisory of Knoxville, which...

Vanguard Fund to Switch From Dow Index to S&P.(Brief Article)
May 9, 2005... Vanguard Group's Extended Market Index Fund will change its target benchmark from the existing Dow Jones Wilshire 4500 to the Standard & Poor's Completion Index. The switch will affect all four of the $9 billion fund's share classes. ...

Waddell & Reed Ponies Up Over Annuity Switching.(Waddell and Reed Inc.)(Brief Article)
May 9, 2005... The NASD has reached a settlement with Waddell & Reed over allegations that the Shawnee Mission, Kan.-based money manager profited by illegally switching the variable annuities of more than 5,000 customers. Under the terms of the...

Soft Dollar, High Oil Prices Fuel Surge in Hedge Funds.(Brief Article)
May 9, 2005... Assets in the hedge fund industry swelled to $1 trillion in the first quarter, although demand for the high-return, loosely regulated investment vehicles remained at 2004 levels, according to a report released by Hedge Fund Research. The...

Fidelity Takes Bold Steps To Improve Efficiency.(Fidelity Investments)(Brief Article)
May 9, 2005... Boston fund giant Fidelity Investments has announced a major restructuring that includes replacing Abigail Johnson, the chairman's daughter, with a committee to run its money management arm. Johnson will become president of Fidelity's Employer...

Reaching Boomers: It's More Than Product.
May 9, 2005... The financial services industry is facing a test, in the form of 78 million retiring Baby Boomers. Every company wants to pass with flying colors, but providing retirement income is a different proposition from planning for retirement. Mutual...

Who's the Competition?(business strategy)(Brief Article)
May 9, 2005... In its study of strategies to reach the retirement market, LIMRA International of Windsor, Conn., interviewed 28 companies, including mutual funds, insurers, banks and distributors, about their own strategies and the competition. Fidelity...

The Evolving Roles of the Triumphant Triumvirate.(chief compliance officers, chief financial officers, chief information officers)
May 9, 2005... Just as swiftly as the mutual fund scandal cleaned house among fund advisor C-suites, a new trio of top chiefs have emerged as the triumphant triumvirate. These include newly knighted chief compliance officers (CCOs), as well as the...

Question of the Day: Regulation Overload?
May 9, 2005... Nearly two years after the Spitzer probe into mutual funds began, MME thought it wise to ask leading executive and legal minds the begging question: Have the regulators gone into regulation overload and is Spitzer killing capitalism? ...

History in the Making.
May 9, 2005... Let's just raise a question still unanswered after these past two scandalous years. What is market timing, and how could an industry entrusted with $8 trillion, or 22% of the nation's retirement assets, allow the unthinkable to happen?...

Fund CCOs Tackle E-mail Retention Sans Guidance.(chief compliance officers)
May 9, 2005... SCOTTSDALE, Ariz. - Despite the lack of a hard-and-fast rule regarding e-mail retention, mutual funds are hard-pressed to get their arms around electronic archiving, a potentially explosive compliance issue that has examiners licking their...

Will the Scandals Ever End?
May 9, 2005... Is there ever such a thing as closure when it comes to scandals? Maybe a better question is, do financial services executives become increasingly diffident about regulatory matters as the list of offenders grows longer and the severity of the...

The Inquiring MME.(Brief Article)
May 9, 2005... Photos by Matthew Atwan The mutual fund scandal has another side: the investors. Money Management Executive's roving reporter Joseph Checkler went around New York - from the 2005 NFL Draft at the Jacob Javits Convention Center to Grand...

The Changing of the Guard at the ICI.(Investment Company Institute)
May 9, 2005... Consumer advocacy groups and the national media have accused the Investment Company Institute of failing shareholders by focusing too heavily on the investment advisors on whom they depend for fees. Recently, in light of the continuing mutual...

The Culture of Compliance: Regulatory Acts Are Not the Solution Leadership Sets The Standards.
May 9, 2005... By George Wilbanks Over the last several years, the investment management business has seen a series of ethical lapses that drastically diminished the confidence of the market in executives and led to significantly greater regulation and...

The Buck Stops at The Back Office.(Column)
May 9, 2005... By Robert Goldberg While talking to a friend of mine about the state of regulation in the mutual fund industry, he commented that there was too much regulation, and the expense was raising the cost of doing business. It seemed to me...

Revenue Sharing Set for a Revolution.
May 9, 2005... ORLANDO, Fla. - Are you going to be paying for shelf space in the future? The fate of revenue sharing is an important question for insurance companies and broker/dealers alike and a keenly attended topic at various sessions during the...

FINAL RULES.
May 9, 2005... Market timing. The mutual fund industry has not heard the end of this phrase, ever since New York Attorney General Eliot Spitzer, in 2003, unearthed shady trading practices through which fund companies allowed some investors to rapidly trade in...

Fidelity Retirement Income Advantage.
May 9, 2005... Many successful models will emerge in the race to provide retirement income management to retirees, but by talking to the competition, the first company to gain major ground in this respect is Fidelity Investments of Boston. In October of 2004,...

The Czarina's' Top 10 List: Tips for Today's Compliance Pro.(Brief Article)
May 9, 2005... 1. Process excellence is key Create repeatable and sustainable processes and be able to demonstrate and document their effectiveness. 2. Strike while the iron is hot Seize this time to bake compliance into the day-to-day operations so...

Endnote: This Year's Winners.
May 9, 2005... Paul Roye After weathering the Spitzer storm, the SEC's chief mutual fund regulator proves his mettle by bringing a wave of lawsuits against mutual fund powerhouses that continues today, not to mention a record 14 new regulations, marking...

. . . And The Losers.(Theodore C. Sihpol III, Eddie Stern )(Brief Article)
May 9, 2005... Theodore C. Sihpol III As the trial against the former BoA broker accused of conspiring with Canary Capital to defraud $1 billion from mutual funds, begins in New York federal court, Sihpol faces 25 years in the slammer. With the exposure...

ICI Endorses Private Accounts for Social Security.(Investment Company Institute)
May 16, 2005... WASHINGTON - The Investment Company Institute, which has neither endorsed nor criticized President Bush's proposal to amend Social Security by allowing workers the option of setting up private accounts that would leverage some type of mutual...

What's Behind an Index Change?
May 16, 2005... For an index mutual fund or an exchange-traded fund that closely tracks a specific index, changing that underlying benchmark can be a big deal. So why do some funds go through the headache of changing the index they seek to mirror? In...

Julius Baer Banks on Repeat Performance: Launches Second International Equity Fund.
May 16, 2005... It is rare when the sequel is better than the original, but Julius Baer hopes to buck that trend by launching a second international equity fund on the heels of closing another to new investors. The Swiss banker first revealed its plans to...

SMAs Take the $15 Trillion Boomer Gamble.(separately managed account )
May 16, 2005... PHILADELPHIA - As the money flowing out of retirement accounts swells from $201 billion this year to $467 billion by 2010 - for a total of $15 trillion in rollovers from Baby Boomer accounts over the next 10 years - the race among money...

ICI Supports One Board Overseeing Multiple Funds.(Investment Company Institute)
May 16, 2005... A task force organized by a unit of the Investment Company Institute, the investment management industry's leading trade group, has determined that oversight of multiple funds by quality independent directors enhances the efficiencies and...

Executive Moves.(Robeco Investment Management appoints Stevens McAleer and Pax World Management Corp. appoints Joe Keefe)
May 16, 2005... Robeco Names McAleer As Principal Robeco Investment Management has tapped Stevens McAleer as a principal, focusing on municipal fixed income. In his new post, McAleer will also serve as an alternative strategies advisor. McAleer, who...

Getting on the Shelf at Schwab Gets Assets in the Door.(Doug Hanson of Charles Schwab & Company Inc.)(Interview)
May 16, 2005... Although fund managers don't like to pay intermediary fees, many are attracting billions of dollars in assets under management through Charles Schwab and are more than willing to pay for the opportunity. But just being on the system is no...

Fund Skipper Pay Up 34%, Study Shows.
May 16, 2005... Mutual fund portfolio managers are taking home fatter paychecks this year, as solid gains in the stock and bond market in the past two years have helped boost median pay, according to a survey by the CFA Institute and the executive-search firm...

A.G. Edwards Faces Fines for Shady Fund Sales.(National Association of Securities Dealers)(Brief Article)
May 16, 2005... A.G. Edwards said last Monday that the NASD has recommended disciplinary actions against the company in connection with various mutual fund transactions, Dow Jones reports. According to A.G. Edwards' annual report filed with the Securities...

Janus, W.Va. At War OverTiming, Late-Trading Razz.(Brief Article)
May 23, 2005... Janus Capital is again battling charges related to market-timing and after-hours trading. But this time, Janus says West Virginia Attorney General Darrell McGraws suit is precluded by settlements with the Securities and Exchange Commission and...

Reps. Hart, Pomroy Push For Permanent 529 Reform.(529 college savings plans)(Brief Article)
May 23, 2005... Two lawmakers introduced a bi-partisan bill last Tuesday that would permanently preserve the tax exemption on qualified withdrawals from 529 college savings plans, the so-called sunset provision that is set to expire after 2010. ...

MFS Focuses on Performance To Feed New Growth.(MFS Investment Management)
May 23, 2005... Maintaining highline performance in its mutual funds is a key strategy for MFS Investment Management to regain its position in the marketplace, according to C. James Prieur, president and chief operating officer of MFS parent Sun Life...

Brand, Reputation to Drive Fund Growth: Analysts Deconstruct Fund Biz at ICI Meeting.(Investment Company Institute)
May 23, 2005... WASHINGTON Recent growth trends in the asset management business indicate that brand and reputation have become increasingly important, as abusive mutual fund trading practices have prompted investors to vote with their feet. Fund...

Advisers Seek to Rebuild Client Relationships: Greater Transparency, Lower Costs Key Issues.
May 23, 2005... WASHINGTON Texas financial adviser Carl Stuart has a message for mutual fund wholesalers, Yall stop by, yahear. Despite the reams of information now available electronically, Stuart still considers the industrys road warriors among the...

Edward Stern Testimony Bolsters Sihpol Case.(Bank of America broker Theodore C. Sihpol III)
May 23, 2005... Former head of Canary Capital Partners, Edward Stern, testified recently that a former BoA broker was largely unaware of any illegal trading activity taking place at his firm. Stern made his recent remarks at the criminal trial of former Bank...

Execs Face the Somber Music At ICI Annual Convention.(Investment Company Institute)
May 23, 2005... WASHINGTON It was a first for the largely introspective ICI: Uncut, plain-speaking videotapes of investors on their mutual fund holdings and, all too often, a dim view of the industry (see ICI Rolls Unvarnished Shareholder Videotape,...

ICI Endorses Growth Act: Legislation Would Defer Taxes on Mutual Funds.(Investment Company Institute)
May 23, 2005... WASHINGTON The Investment Company Institute is strongly supporting a new piece of legislation called The Growth Act, or Generating Retirement Ownership Through Long-Term Holding. What ICI President Paul Schott Stevens likes about the plan,...

E-Commerce Escalation: Commands Greater Backup.
May 23, 2005... WASHINGTON Electronic communication, the way of life and doing business that it has become, demands greater vigilance on the part of mutual fund IT and legal experts. That was the message from John Walsh, associate director and chief...

Fidelity Cuts Fees-Again.(Brief Article)
May 23, 2005... The nations largest mutual fund company has done it again. Fidelity Investments last week decided to halve the per-contract charge on options trading for all tiers-Gold, Silver and Bronze-to 75 cents. On a trade of 10 option contracts,...

Executive Moves.(appointments)
May 23, 2005... SEC Appoints Thomsen As Enforcement Chief The Securities and Exchange Commission has filled the post of director of the division of enforcement from within. Linda Chatman Thomsen, formerly deputy director of that division, takes the place...

If Sihpol Convicted, Solow Can Evict BoA, Judge Rules: Invokes Anti-Drug, Prostitution Rule.(Bank of America)(Brief Article)
May 23, 2005... While calling a real estate management and development companys case against longtime tenant Bank of America audacious, a New York Civil Court judge has ruled that the landlord, Solow Building Co., can ask BoA to leave the building. Judge...

Former Continental CEO Shares Words of Wisdom.(Chief executive officers)
May 23, 2005... WASHINGTON Perhaps the mutual fund industry could borrow a page or two from the playbook of Gordon M. Bethune. Bethune is best known for his days as chairman and CEO of Continental Airlines, where he orchestrated what is easily the...

Correction.(Correction Notice)
May 23, 2005... In the May 9 issue (see Fund CCOs Tackle E-mail Retention), Jim Volk was quoted without proper attribution. He is chief compliance officer and chief accounting officer for SEI Investments fund accounting and administration business. (c)...

World Equity Fund Inflows Outpace Domestic Rivals.
May 30, 2005... Running contrary to declines in the broader market from March to April, equity mutual fund inflows increased month over month by about $3.5 billion, or roughly 24%, according to Lipper Senior Research Analyst Andrew Clark. The increases,...

Sihpol Beats Seven Counts of Fraud: But Prosecution Puts Kibosh on Key Witness.
May 30, 2005... NEW YORK - The biggest criminal trial in mutual fund history is nearing judgment day as both sides gear up for their summations, but not before some interesting twists and turns. Defense attorneys in the case against former Bank of America...

Critics Assail Fund-Friendly Growth Act: Pension Industry Plans Vigorous Opposition.
May 30, 2005... The Growth Act, a surprisingly obscure piece of tax code reform legislation that could be a boon for the mutual fund industry, has found a key ally in the Investment Company Institute. Unfortunately, it's also found itself in the crosshairs...

If You Can't Beat Em, Sell Em: SMAs, ETFs, Hedge Funds Force Mutual Fund Execs' Hands.(Separately Managed Accounts)(Exchange Traded Funds)
May 30, 2005... WASHINGTON - Mutual funds may be an undisputable mainstay in investors' portfolios - but investment advisors should carefully consider whether they want to also offer complementary or competing products such as separately managed accounts...

Democrats Won't Discuss Topic of Private Accounts.
May 30, 2005... Democratic National Committee Chairman and former presidential candidate Howard Dean said his party won't come to the table to discuss Social Security reform unless President Bush removes his controversial private accounts from debate. ...

Financial Firms Get ReadyTo Meet Boomer Demands.(Brief Article)
May 30, 2005... Nearly nine out of 10 major financial firms has made serving the upcoming Baby Boomer retirement boon their No. 1 priority, according to a new report from Financial Research Corp. While 88% are gearing up for this upcoming wave-primarily by...

Executive Moves.(Appointments)
May 30, 2005... Wilmington Trust Taps Sanford as President Gregory F. Sanford has been hired as president of Wilmington Trust FSB California. The wealth advisory firm said the move was part of its continued effort to stretch out farther into Southern...

Witness Details Sihpol's Compensation: Broker's Pay Rose Sharply During Alleged Abuse.(Brief Article)
May 30, 2005... Prosecutors in the criminal trial of former Bank of America broker Theodore C. Sihpol III rested their case last Monday after calling a human resources executive as their final witness, who testified that Sihpol's compensation rose sharply in...

SEC Unveils Consulting Industry Faux Pas.(Securities and Exchange Commission)
May 30, 2005... The findings of an 18-month Securities and Exchange Commission investigation into possible conflicts of interest in the investment consulting industry may have finally confirmed the suspicions of industry watchers; the pension investment...