Portfolio

Hedge funds may turn out to be a greater competitor to mutual funds than most people expected. While hedge funds are extremely risky vehicles that do not appeal to investors who are interested in safer products, funds of hedge funds offer some of the advantages of hedge funds with an enormous reduction of risk. Although the number of funds of funds is relatively small right now, it's growing, and may soon capture a lot of assets that ordinarily would have gone to mutual funds, say industry observers.

The retail investment arm is launching a new high-net-worth wrap product that allows financial advisers to build, manage and customize portfolios of funds and individually managed accounts.

This year Nuveen Investments launched 18 new closed-end, fixed-income funds. Last year it launched zero.

With U.S. warplanes swarming over Afghanistan and Special Forces troops readying to take to its ground, financial planners have begun to get calls from investors inquiring about defense-related investing.

Fidelity Investments Institutional Brokerage Group and Frank Russell announced an alliance in which Fidelity will distribute Russell's new multi-manager separately managed account program through its registered investment advisors and correspondent broker/dealers.

A poor economy and rising unemployment rates are making an already difficult defined contribution market even harder for plan providers. Because plan sponsors are occupied with more pressing business concerns in a difficult economic environment, changing or adding a plan provider to their defined contribution plan is not a priority. That has made gaining market share very difficult for many 401(k) providers, say industry observers.

SEI Investments has launched SEIBusinessBuilder.com to assist planners with marketing and client relationship issues.

In an effort to gain access to the education savings market, investment management companies are increasingly looking to partner with existing state-sponsored "529" college savings plans (See MFMN, 9/3/01). But standards don't yet exist for 529 partnerships, so the nature of the arrangements among these companies is different with each one.

For years, people have gathered in quiet, suburban living rooms to pick stocks and discuss matters impacting markets. They are known as investment clubs, and the communities of investors sometimes manage sound returns based on the notion that many heads are better than one.

BOSTON - Exchange-traded funds are approaching their capacity, and the development of new types of exchange-traded products is going to be necessary to sustain growth, according to industry executives who spoke here earlier this month at the Performance Institute's 2001 Summit: Beyond Mutual Funds (assets have grown at an enormous rate over the past few years. Total ETF assets were less than $10 billion in 1997, but have passed the $80 billion mark this year).