Money Management Executive Latest News

Two mutual fund shareholders are challenging the constitutionality of a two-month-old Maryland law designed to define what makes a mutual fund director independent.

The SEC's office of compliance, inspections and examinations, in a letter May 1 to investment advisers, has identified 12 areas of potentially troubling practices that the SEC expects to review during exams. The letter, which largely tracks speeches top compliance office officials have made this year, outlines advisers' duties regarding advertising, personal trading, soft dollar disclosure and other issues. It also offers examples of instances of violations the office has found.

A former Dalbar executive and a financial planner have formed a new company which plans to begin offering online services for investors and financial intermediaries in September. MonEcast.com, the website of the new company, FinStream LLC of Boston, will provide live online video of personal finance advisors for investors. Investors will be able to ask the advisors for advice by email and telephone and see and hear responses online. FinStream plans to offer similar online sessions for intermediaries designed to help their business.

In the bull market, investors have stampeded to aggressive mutual funds. But will investors flock to bearish mutual funds with the same enthusiasm if the markets face a sustained bear market? That is a bet some fund advisers are taking - with mixed results.

With $864 billion of assets under management, Fidelity Investments of Boston, the number one mutual fund company in the United States, commands an eight percent market share of the $7.059 trillion total mutual fund assets in the U.S., according to the Investment Company Institute.

William M. Lyons, president and chief operating officer of American Century Companies of Kansas City, Mo., is the chairman of this year's general membership meeting of the Investment Company Institute. Lyons discussed the state of the mutual fund industry with Mutual Fund Market News reporter Mike Garrity. An edited account follows.

The Canadian fund industry is lobbying against new securities regulations that require mutual fund prospectuses to compare past performance to market benchmarks. The mandatory references to market indexes are among the more controversial aspects of the legislation, National Instrument 81-101. The sweeping new rule took effect on Feb. 1 and is coming into force gradually this year as fund companies revise their prospectuses and introduce new funds.

Every business day, companies announce "partnerships." Some work. Some do not.

William E. Grau became head of marketing for Deutsche Asset Management's retail and mutual fund groups early last month. Grau formerly was marketing director for the retail fund and private and institutional banking businesses of Chase Manhattan Bank of New York. Grau recently discussed Deutsche Asset Management's efforts to establish its brand name in the U.S. mutual fund market with Mutual Fund Market News reporter Andrew Greene. An edited account of their conversation follows.

With the current yo-yo equity market, it should not be surprising that turnover rates in mutual fund portfolios have been high. But opinions differ as to the impact on investors.