Money Management Executive Latest News

No cocktail party conversation about mutual fund reform would be complete without a discussion of the future of rule 12b-1.

The Securities and Exchange Commission Thursday approved a new rule to combat market timing that would leave the decision to impose redemption fees on mutual funds up to the board of directors and allow funds to hold intermediaries more accountable for abusive trading.

MIAMI - Having put the pain of a pervasive trading scandal behind it, Alliance Capital Management and its mutual fund subsidiary Alliance Bernstein are focused on carving out market share and winning new clients by retooling their distribution strategy. "We're no longer known for hot product and high fees," said Bob Hausler, director of marketing communications at AllianceBernstein, speaking at a recent conference sponsored by the National Company Service Association. "We're a different firm than we were 14 months ago."

Led by favorable stock market activity and a reputation still unmarked by the scandal, Fidelity Investments witnessed a 23% surge in net income in 2004. Profits at Boston-based Fidelity rose to $1.1 billion in 2004, versus $908 million in 2003, the firm's third-best year ever. Fidelity's average assets under management in 2004 grew to $1.0 trillion, an 18% hike compared to 2003. However, Jim Lovell, editor of Fidelity Investor, noted that probably 75% of the increase in assets was due to market activity.

Amid the ongoing furor over the mutual fund trading scandal, three fund luminaries, , Jack Bogle, Mercer Bullard and Don Phillips, weighed in with Morningstar on what reforms the industry needs to embrace to fix its inherent flaws.

Even though revenue-sharing payments come out of a fund's own coffers, the common practice hurts investors because of the bias it creates, attests Morningstar columnist Eric Jacobson. "The reality is that fund companies pay up for precious access to brokers, and those brokers are almost always limited to selling funds that have paid up," Jacobson said. For instance, he points out that Merrill Lynch notes that "funds that do not enter into arrangements with Merrill Lynch are generally not offered to clients."

Fidelity Names Strickland President of Canadian Firm

Who's got the lowest cost index funds? Get your index fund expense ratio scorecard ready.

Wearied in recent years by a bear market and the market-timing and late-trading scandal, Janus Capital is introducing two new funds that could finally signal a turnaround for the onetime fund giant and a departure from its reputation for aggressive growth.

Fidelity slid in net new inflows rankings for January, according to Financial Research Corporation. Boston-based Fidelity's net new client investment in its stock and bond mutual funds fell from fourth place to seventh place in January, or a 77% decline to $1.24 billion from the $5.3 billion it received in January 2004.