Money Management Executive Latest News

The subprime mortgage woes are now affecting hedge funds, with one closing up shop and the other halting investors from withdrawing their money, according to The Wall Street Journal.

Because of the bull run over the past five years, it has become harder for portfolio managers to find stocks with good value, and as a result, mutual fund returns are likely to decline, fund managers said at the Morningstar conference, according to Reuters.

Nasdaq will create a division that will focus solely on exchange-traded funds, The Wall Street Journal reports. One of the key functions of the unit will be to provide liquidity for ETFs with the help of a market makers.

Fund companies have been so busy focusing on the Baby Boomers that they have been overlooking Generation Y, those in their 20’s, the Financial Times reports, citing a report from KPMG. And that is going to have a profound effect on their bottom lines, particularly as the population of those between the ages of 40 and 59 is set to decline sharply in the next decade.

The Heinz Family Philanthropies, in partnership with the Women’s Institute for a Secure Retirement, has issued a free online book called What Women Need to Understand About Retirement.

According to a poll sponsored by AIG Sun America and conducted by Harris Interactive, 97% of Baby Boomers believe guaranteed income for life is their top retirement goal, followed by protection against investment losses and enough income to meet rising healthcare costs.

The Securities and Exchange Commission announced Monday that it will distribute $37 million in fair funds to 300,000 Columbia Funds investors whose holdings were affected by market timing between 1998 and 2003. It is the first of a five fair funds distributions totaling $140 that the SEC is making to Columbia Funds investors.

Although there have been a smattering of articles about a reformation at Janus Capital appearing over the past few months, none has been as colorful or as compelling as one last week in Kiplinger's Personal Finance.

Many mutual funds and closed-end funds have tried to mimic successful hedge fund strategies. However, at the end of the day, they are still not hedge funds, according to BusinessWeek. Now, individuals who desire hedge fund-like returns and are willing to take the risk, are buying shares in companies that invest similar to hedge funds.

Fundamental indexing has had the mutual fund excited about the investment idea, but early returns from one of the most major fundamental indexing shops, WisdomTree Investments, have not been stellar, according to Dow Jones. Conventional index funds have been around for 30 years and aim to match market results, betting that they will be able to beat most stock-picking mutual funds over time. Recently, a number of prominent index fund critics have argued that these funds are flawed because traditional indexes weight companies by market capitalization, or the total number of their outstanding shares, instead of fundamental measures such as company’s earnings or dividends. Last month, WisdomTree gave a glimpse into how the 20 original ETFs actually performed since their one-year inception. The results showed that WisdomTree may have to wait awhile longer before putting conventional indexing company giants such as Barclays, State Street Corp. or Vanguard Group out of business. However, the returns are preliminary, and ideally investors should look three to five years to make a sound judgment. WisdomTree’s basic domestic style funds lagged ETFs that track conventional indexes from those three competitors basically across the board. The international funds performed better than domestic funds, outperforming other popular ETFs in a number of categories, but still returns were mixed. For the domestic funds, results were the same whether WisdomTree funds were compared to competitors’ balanced funds or value-oriented funds. Critics of fundamental indexing commonly state that fundamental ETFs are similar to value funds. The international funds were compared only to competitors balanced funds because there are few international value ETFs available to investors. The company is “very, very pleased” with its one year results, said Bruce Lavine, president of WisdomTree. He emphasizes what he considers strong returns by a number of its international funds. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.