Money Management Executive Latest News

A class-action suit against a major 401(k) provider charges that mutual fund companies act illegally when they rebate a share of administrative fees to the plan vendor.

Retirement services provider GoldK has added Satuit Capital Management’s Capital Micro-Cap Fund to its retirement offerings.

While Mellon Financial Corp.’s income from continuing operations fell 4.3% to $177 million in 2001, the firm’s assets under management and investment management fee revenue increased due to growth in its money market and fixed-income funds, the firm announced today.

By all standards, Dodge & Cox had a banner year. While fund data providers are still crunching full-year 2001 numbers, the institutional advisor based in San Francisco is poised to cap off the year as the third best selling no-load fund complex, and the seventh overall best selling fund group in 2001.

Value funds definitely were successful in attracting assets throughout much of last year. According to Lipper, value funds collectively soaked in $55.6 billion through November of 2001, while funds that invest with a growth discipline lost $17 billion over the same period. Core funds which tend to utilize both styles attracted just $3.8 billion in new money.

Mutual fund executives wanting to put 2001 behind them may get a nasty reminder of what kind of year it was. Year-end bonuses for executives and wholesalers, typically handed out this month, are down significantly from the previous year.

Default insurance on money market funds has spiked so sharply over the past year that a growing number of fund companies are dropping coverage rather than paying rates that have increased as much as 400%, according to industry executives.

Overall, marketing budgets at fund firms for 2002 are way down, according to analysts. Many firms maintain that marketing is one of last things they want to cut, but the downward trend in spending, which began in 2001, is continuing this year. Still, because firms started paring down their marketing initiatives in 2001, there is not a lot to drop in 2002. As a result, firms are likely to maintain their initiatives, but direct them to a smaller pool of potential investors.

Last March the Dreyfus Corporation said it would close its mid-cap value fund as soon as its assets reached $1.4 billion. At the time, the fund had roughly half that amount in its coffers, a little more than $632 million, and executives guessed it would quickly fill to capacity.

If it is hard for mutual fund executives to get a handle on the concept of e-wholesaling it may be because everyone has their own way of defining it. A recent joint report from Financial Research Corp. (FRC) and kasina, E-wholesaling: The Distribution Solution, emphasizes that there isn't one e-wholesaling solution. Each firm has to develop its own approach based on its business strategy.