Portfolio

Fidelity Investments of Boston and American Century of Kansas City, Mo. both announced last week that in light of the Electronic Signatures Act taking effect on Oct. 1, they would accept new applications online, without handwritten signatures of any kind. Neither firm is requiring signatures, either at the time of an account opening or later, on hard copies via fax or the mail.

Mutual fund firms are considering offering hedge funds and related products in order to prevent portfolio managers from leaving to work for existing hedge funds, said industry executives.

NEW YORK - While exchange-traded funds are expected to grow rapidly in the near future, their growth will be hampered by numerous obstacles.

MetaMarkets.Com of San Francisco filed with the SEC Sept. 8 for a new fund that will invest in IPO's and new companies involved in developing products the company believes will lead to technological, social and economic change, according to the SEC filing.

Exchange-traded funds could turn out to be "the most significant new product category" of the decade, according to Financial Research Corp. of Boston. They will "continue their recent dramatic growth rate for many years to come," according to a recent FRC report. Any fund complex that wants to appeal to a broad investor base should probably add the products to its offerings, the report said.

If Ted Benna, the originator of the concept of 401(k)'s, has his way, 401(k)'s could become completely flexible, portable, and participant-directed within the next ten years.

Exchange-traded funds are not the only exotic new product shaking up the mutual fund industry. A new breed of customized, web-based baskets of stocks has recently come to market.

If new employees were automatically enrolled in 401(k)'s, mutual fund companies might collect assets from the 15 percent of the population that fail to sign up for 401(k)s, fund executives and consultants said.

California Federal of San Francisco has just joined the growing number of banks offering checking accounts with a "sweep" function that invests excess money in money market mutual funds.

In response to the increasing popularity of exchange-traded-funds, two firms are about to introduce two variations of the product.