Alternative investments

For the past year, investors have been nervously avoiding stocks and pumping billions of dollars into bonds and bond mutual funds, but a new study indicates that a large percentage of investors may have a limited understanding of how bonds work.

Putnam Investments has unveiled the industry’s first absolute-return target-date funds, which will combine both conventional investing strategies with absolute-return methods that seek to mitigate market volatility.

LAKE BUENA VISTA, Florida - Mutual fund boards are grappling with their increasingly expanding roles as risk overseers, management coaches and shareholder advocates as the Securities and Exchange Commission continues to add new rules and raise its expectations, including the creation last week of the Division of Risk, Strategy and Financial Innovation.

Given the number of tactical and absolute-return mutual funds hitting the market, it appears that some fund complexes are now giving their portfolio managers more leeway. The 17 individual traders who run ProfitScore Capital Management's multi-manager long/short unified hedge account accomplish this by actively trading mutual funds within their individual specialty. They primarily buy funds from Rydex, ProFunds and Direxion, including funds that permit intraday trades. Money Management Executive recently spoke with John McClure, CEO of ProfitScore, about this unusual approach.

LAKE BUENA VISTA, Florida - With the one-year anniversary of the collapse of Lehman Brothers finally in the rearview mirror and the economy on the way to recovery, many participants in the financial services industry are questioning whether the industry still needs to undergo substantial regulatory change, and what changes, if any, could be beneficial at this point.

Forward Management has launched the Forward Tactical Growth Fund, a mutual fund that will try to take advantage of market inefficiencies all the while minimizing downside volatility, by taking long, short of neutral market positions on individual securities, sectors or entire markets. Broadmark Asset Management is sub-advisor to the fund, which is a 40 Act version of a similar separately managed account the two firms already offer.

President Obama outlined a series of initiatives the federal government would take to help people boost their retirement savings, including allowing them to direct tax refunds, pay raises and unused vacation pay to their nest eggs.

In the eight months since their launch in January, Putnam Investments' new family of absolute-return mutual funds has attracted more than $400 million in new investments and, according to the firm, is on track to top $1 billion by the end of the year.

Mutual fund advocates are rallying together in preparation for a key Supreme Court battle this fall that could drastically change the way fund companies structure their fees.

Standard & Poor's Equity Research Services has upgraded its open-end mutual fund research product for financial advisors and clients.

Total assets in money market mutual funds fell by $15.3 billion to $3.543 trillion during the week ending Sept. 9, largely driven by institutional accounts, the Investment Company Institute said.

John Hancock Funds has launched the John Hancock Technical Opportunities Fund, which will use an unconstrained, bottom-up technical approach to rigorously select stocks. Additionally, the fund manager will have license to put 100% of the fund’s assets in cash.

Regulators are looking for ways to increase accounting safeguards for investment advisors who have custody of client assets, but an investment advisor's group says some of the proposed changes are too broad and go too far.

BlackRock made a big splash in the exchange-traded funds business this summer with its $13.5 billion purchase of the investment unit of Barclays Global Investors, and analysts and executives are waiting for the next shoe to drop.

When like-named target-date funds experienced a wide range of investment returns in 2008, regulators at the Securities and Exchange Commission and the Department of Labor took notice.

The mutual fund industry is known for churning out “hot-dot” funds that follow the latest investment craze, but as The Wall Street Journal notes in a recent column, it’s hard to believe but there are fewer than 10 small-cap emerging markets funds available.

After last year’s disastrous decline in all investment sectors, one of the worst years for investing since the 1930s, financial advisers are seriously rethinking traditional diversification and modern portfolio theory, The Wall Street Journal reports.

U.S. multi-manager assets fell by 24.2% to $403.5 billion last year, according to a report on global multi-manager products released by Cerulli Associates.

Combined assets of the nation's mutual funds increased 4.0% for the month of July, rising $398.6 billion to reach $10.431 trillion, according to the Investment Company Institute.

A push by institutional investors toward cash helped the total amount of money market mutual funds climb by $1.62 billion to reach $3.579 trillion for the week ending Aug. 27, the Investment Company Institute said.