Portfolio

The issuance of U.S. Treasuries is set to fall by 16% this year, and tax receipts should jump. Demand for bonds will also increase, both among pensions and individuals and overseas buyers, and quality small cap stocks should rise above the pack. Keefe, Bruyette and Woods suggests shorting stocks that will benefit from rising short-term interest rates.

Client trading activity increased 17% from the third quarter due to stronger market conditions and an upbeat economic outlook.

A new study from Aon Hewitt claims that pension funds for companies located in the U.S., the U.K., Canada and Europe clocked out of 2010 with a 87% funded status, marking a 1% increase from previous numbers.

Mutual funds have emerged as the dominant source of selling pressure for state and local government paper in the new year as investors keep pulling out their money, forcing fund complexes to sell bonds into an already jittery market.

According to a company memo, “a big driver of [Morgan Stanley's] future success will be the continued build-out of our sales and trading platform and, in particular, our strategy and footprint in fixed income."

For equity funds, 2010 was a solid year, with the average fund rising 16.57% and 98% of all equity funds in positive territory, according to Lipper. Sector equity funds rose 19.02%, U.S. domestic equity funds rose 17.14%, world equity funds were up 13.67% and mixed asset funds delivered 12.02%.

According to Wealth-X, the top executives at the ten biggest banks and asset managers on Wall Street have an average net worth of $210 million. Their combined net worth is at least $2.1 billion. Check out the top ten.

A majority of institutional investor, 55%, expect global growth over the next six months, up considerably from the 33% who felt this way in the third quarter, a survey of 97 institutional managers by Northern Trust found.

Matt Fink, former president of the Investment Company Institute, covers this and other frequently asked questions about the industry in the new edition of his book, “The Rise of Mutual Funds: An Insider’s View.”

Matt Fink was with the Investment Company Institute from 1971 to 2004 and served as its president from 1991 to 2004. He is the author of a history of mutual funds, “The Rise of Mutual Funds: An Insider's View,” (Oxford University Press, 2008). A new edition, covering the 2008 financial crisis and its impact on mutual funds, has just been published.