Money Management Executive Latest News

Once the gold standard for fund governance, TIAA-CREF no longer deserves its designation as the industry's shareholder-friendliest firm, according to Christopher Davis, an analyst with Morningstar in Chicago.Davis cites the organization's recent management fee hike. After getting a no-vote from shareholders last fall, TIAA-CREF decided to poll them again in January to get it pushed through. "While we once regarded [their] culture as one of the fund industry's best, that's no longer the case," Davis said.

Fidelity Investments reported new profit of $1.3 billion in 2005, up 20% from $1.1 billion in 2004, according to reports. It was the second-most profitable year in firm's 60-year history.

With assets in and the number of exchange-traded funds continuing to rise, Morningstar is now rating 107 ETFs on the market, based on their risk-adjusted returns in their respective peer groups, as well as their expense ratios, the company announced Friday. To be eligible for the ratings, which Morningstar is making available to investors at its website at no charge, the funds must be three years old. Thus, Morningstar is rating only 107 of the 201 ETFs sold in the U.S. The ratings are designed to help investors compare one ETF to another as well as to regular mutual funds.

A federal judge last Monday tossed out a lawsuit filed again Marsh & McLennan in which shareholders accused the company of withholding information about improper trading at its Putnam Investments subsidiary in order to keep share prices artificially high, according to Dow Jones.

Just as lifecycle funds change with time to conform to investors' needs, Fidelity Investments is changing the mix of its Freedom Funds to respond to market demands. By June, Fidelity plans to add four new funds to the lineup, which has grown 248% in assets since 2003.

Selling mutual funds to the nation's largest and deepest-pocketed demographic, or those 77 million Baby Boomers with spending power of more than $1 trillion, would seem so easy. Just portray a bunch of 50-something actors in a variety of exciting lifestyle environments, cue a favorite rock-and-roll anthem from the 1960s and then deliver the marketing pitch.

A new report from the Securities Industry Association indicates that annual compliance costs for financial services firms have nearly doubled in the past three years, but whether the findings amount to nothing more than industry grousing or are genuine evidence that recent rulemaking has indeed been excessive, depends entirely on perspective.

Yet another fund group has decided to pull the plug on offering B-shares to new fund investors.

Fidelity Brokerage and JPMorgan reached an agreement whereby JPMorgan's initial public offerings, secondary share sales and certain municipal bond offerings will be available to Fidelity's retail and institutional clients. These include 10.7 million retail accounts, 3,000 registered investment advisors and 65,000 individual brokers served through more than 350 broker/dealer firms.

As investment management firms increasingly look to separate the money management and distribution sides of their business, divestiture-driven mergers and acquisitions among such companies could hit a record high this year, Putnam Lovell NBF predicts.