Money Management Executive Latest News

Twenty-two percent of companies are now looking into completely outsourcing their retirement, health and welfare benefits, in an effort to cut costs, a survey by Diversified Investment Advisors. Eleven percent have begun the process of total benefits outsourcing(TBO), Diversified Investment Advisors found.

Instead of waiting for long-term bond prices to go back up, some mutual funds are offering investors the option of going short, The Wall Street Journal reports.

According to an expert on shareholder activism, many angry investors are looking into taking legal action against mutual funds holding Refco. Lawsuits have already been filled against Grant Thornton, Refco's auditor, as well as investment banks who disregarded the initial public offering by the futures broker a few months ago, and now more lawsuits are a possibility, MarketWatch reports.

On the heels of the SEC announcing last Wednesday its plans to establish guidelines on how soft dollars may be spent, Boston-based Fidelity Investments has decided to cut down on soft-dollar arrangements, a practice common in the mutual fund industry, in an effort to set an example for other firms, Reuters reports.

Hedge funds investing in emerging markets have outperformed their benchmarks this year, according to data from Hedge Fund Research. Hedge funds investing in emerging markets delivered returns of 14.7% in the first nine months of the year, as tracked by the HFRI Emerging Markets Total Index. This number contrasts with the 7.3% increase in the HFRI Fund Weighted composite index in the period.

Offshoring in the financial services industry is expected to double by 2008, but firms that approach the strategy solely from a cost-savings perspective, or that fail to address quality control, turnover and compliance costs, run the risk of missing out on its greatest competitive advantages - and not realizing those cost savings.

One year after assuming their new roles, chief compliance officers at mutual fund advisory firms shouldn't expect to be off the hot seat anytime soon. There are still policies and procedures to review, update and expand upon where gaps are found; reports to generate; compliance checks and balances to assess; and a myriad of other unforeseen issues.

Fidelity Investments of Boston last week launched the Fidelity Advantage Class shares on its five Spartan index funds, which will provide qualified investors with a bonus 30% reduction in fees, a remarkably lower price than what the rest of the industry offers on index funds. Some industry observers view the move as a strike against increasingly popular exchange-traded funds and industry rival Vanguard of Valley Forge, Pa.

Charles Schwab is making its Schwab and Laudus MarketMasters funds available to third parties through four clearinghouses and brokers outside of the company. The dealers who are currently licensed to sell its funds include: Ameritrade, Fidelity Investments, T.D. Waterhouse and Union Bank of California. Pershing and Fiserv Trust are soon to be added to the list.

Through the first nine months of this year, Standard & Poor's has found that 55.8% of actively managed large-cap funds have outperformed the S&P 500. But mid- and small-cap funds have not fared so well, with only 27.9% of mid-cap funds besting the S&P MidCap 400 index and 27.7% of small-cap funds trouncing the S&P SmallCap 600.