Money Management Executive Latest News

After 11 straight months of positive flows, Canadian mutual funds suffered outflows of $545.4 million in September, The Globe and Mail reports.

The National Association of Securities Dealers has fined Sentinel Financial Services Co. $700,000 and censured it for not doing enough to stop market timing in its funds. The market timing, which took place in three Sentinel Group funds, was partly a result of a shoddy supervisory system, the NASD said.

Three mutual funds have reportedly drawn the Securities and Exchange Commission's ire for alleged violations resembling the accounting sins committed by Bridgeway Capital Management. The SEC is now targeting the Putnam Research, Gartmore U.S. Growth Leaders and the WWW Internet funds for potentially erring in performance-based fee calculations. The fees in question rise and fall in proportion to a fund's ability to beat its benchmark, such as the Standard & Poor's 500 Index.

The Securities and Exchange Commission is reportedly reconsidering its proposal to require funds to impose a 2% redemption fee on shares sold within five days of purchase. Of the 280 comment letters the SEC has received on this proposal, 250 are against it, citing increased costs for investors, the difficulty of implementing since many funds are held through retirement or omnibus accounts and the inappropriateness of a government body setting fees. In fact, some at the SEC reportedly believe that requiring funds to disclose their policies to detect and prevent timing is adequate, and they are pushing to make a redemption fee optional.

At Janus Capital Group of Denver, September wasn't such a bad month. But folks there may not be breaking out the fluted champagne glasses -- yet. After a brutal bear market that wrought havoc on the tech-heavy firm, and then the fund scandal, the question of whether or not the firm is finally turning the corner still remains.

It's official.

Fidelity and Vanguard may have avoided the stench of recent scandals, but they couldn't escape the ire of one investment adviser or his quarterly Hall of Shame listing the worst mutual funds in the country. The Fidelity Destiny 1 fund and the Vanguard U.S. Growth fund are two of 15 funds that Adam Bold, founder and CIO of Overland Park, Kan.-based The Mutual Fund Store, a fee-based investment advisory firm, has singled out as being worthy of such a notorious distinction.

Bear Stearns is reportedly investigating whether top executives in its private-client brokerage unit approved improper mutual fund trades. According to internal documents, Bear Stearns is examining e-mails from 109 of its employees, including several firm executives. Included in that group are the heads of the private client group, Steve Dantus and Vincent Dicks. In addition, the New York Stock Exchange has asked the duo for statements.

T. Rowe Price Vice Chairman James S. Riepe has been named chairman of the Investment Company Institute, succeeding Paul G. Haaga, Jr., EVP of Capital Research and Management Co. Haaga, who served two one-year terms, will continue as vice chairman, in the tradition of past chairmen. Riepe is also chairman of T. Rowe Price Mutual Funds and is currently on the board. This will be his second term as chairman of the ICI, having served in the position between 1990 and 1992.

The increases in compensation for wholesalers of mutual funds, annuities, retirement services and other investment products nearly doubled from 2002 to 2003, according to a recent survey by DGL Consultants. DGL found that after a 3% increase in cash compensation in 2002, compensation jumped 5.9% in 2003. Wholesalers already sitting in the 75th percentile felt an increase of 9.1%, while wholesaler incentive compensation rose 8.6%. "The objective of this survey is to provide a frame of reference for evaluating the total sales compensation package," said DGL President Don Lariviere.