Money Management Executive Latest News

Many hedge funds that invest in Asia are delivering poor returns since the credit crunch since they were so bullish on the region that they went long on stocks without hedging their bets, The Wall Street Journal reports. And many of these funds were invested in the same stock.

Due to the credit crisis caused by subprime mortgage loans, money market funds are beginning to cut back on all types of asset-backed securities, not just those funded with mortgages, The Wall Street Journal reports. Many managers are concerned about such securities’ risks and fear that they might delay or default on repayment.

The U.S. District Court for the Northern District of Illinois has ordered John M. Fife, a principal of Clarion Management, a hedge fund based in Chicago, to pay more than $500,000 in fees and disgorgement for having allegedly placed illegal market timing trades in 2002 and 2003. The court also barred him from working at an investment advisory firm for 18 months.

Subprime market problems in the U.S. are causing damage to markets around the world. Thailand estimated the problems have cost the county $1 trillion and might cause repercussions in the property business until the middle of next year, according to Thai News Service.

Longtime Berkshire Hathaway mutual fund investors are starting to leave the Warren Buffet run company, according to Forbes.

Small-cap stocks have been favored in recent years, but now a turnaround is happening and mutual-fund managers investing in Europe are stating they are finding large-cap stocks more attractive than small-caps, according to Dow Jones.U.S. counterparts are also relating the same thing and the reasons are quite similar.

Managers of quantitative hedge funds are pointing the blame at each other stating all quantitative funds own the same stocks and use similar models, which caused them all to sell at the same time, driving down share prices, according to the Wall Street Journal.

The mortgage-backed securities woes have not diminished interest from investors in securities linked to insurance policies, according to the Wall Street Journal.

Some mutual fund managers are taking advantage of the beaten-down prices in the market, turning to higher-risk bonds, such as junk bonds and loans backing highly leveraged takeovers, along with mortgage-backed securities and REITs.

Two hedge fund managers are paying $275,000 to settle with the Securities and Exchange Commission over improper mutual fund trading, the Associated Press reports.