Executive Briefing

NEWS SCAN

Inflows Continue to Top 2012 Numbers

Stock and bond funds, including exchange-traded funds, maintained a strong pace of net inflows in April, according to fund industry researcher Strategic Insight (SI). The funds netted nearly $50 billion in the month.

Avi Nachmany, SI's director of research, identified two trends responsible for these numbers. "Overall, we observe two great rotations in the mutual fund industry. One, from $10 trillion+ zero-yield cash to other income vehicles, mostly bond funds. Another, from un-invested money to capital appreciation vehicles, as investors re-engage and move up their personal risk curve."

 Moody's Says New Money Fund Rules May Reshape Industry

New rules being considered for U.S. money-market mutual funds will make them safer for investors while forcing some smaller providers out of the business, Moody's Investors Service analysts said last week in a research report, according to Bloomberg News.

The Moody's study said the potential transformation of some funds to a floating share value from a constant value "would have a significant impact" on cash-management products available to investors, investor preferences and industry composition.

Morningstar Report: U.S. Best Market for Fund Investors

The United States is the best market for fund investors based on criteria such as investor protection, transparency, fees, taxation, and investment distribution, according to Morningstar's Global Fund Investor Experience report. Next on the list was Korea with a B+.

Who Will Sell Mutual Funds in the Future?

Breaking into the brokerage business is getting tougher as declining fees make small accounts less profitable and government restrictions on unsolicited calls make phone sales taboo according to Bloomberg News.

That's leaving big firms struggling to replace a retiring generation of advisers who helped accumulate trillions of dollars of assets and generated steady profits for years.

Hiring brokers away from competitors isn't a sustainable strategy for replacing those who retire, according to Bob Patrick, 51, director of education and development at Raymond James Financial. "We can't keep rotating people around because we all keep getting older," Patrick said. "We're extincting ourselves."

ETF Gives Chinese Investors Access to U.S. Securities

China's first cross-border exchange-traded fund (ETF), based on the NASDAQ-100 Index, has begun trading on the Shanghai Stock Exchange. The NASDAQ-100 Exchange-Traded Fund (513100), sponsored by Guotai Asset Management, was created so that investors in China could easily invest in companies traded on NASDAQ. The listing of this product marks the first ETF in China to provide access to the U.S. market.

PRODUCTS

Goldman and Morgan Stanley Launch Alt Funds for Retail Market

To bring alternative investments to a wider investor base, Goldman Sachs Asset Management (GSAM) has launched the Goldman Sachs Multi-Manager Alternatives Fund (GMAMX, GMCMX, GSMMX, GIMMX, GRMMX). Morgan Stanley's Alternative Investment Partners (AIP) group rolled out the AIP Dynamic Alternative Strategies Fund (DACSX), its first mutual fund.

Fidelity and USAA Offer Target Volatility Funds

Targeting investors looking for better returns but lower risks, Fidelity Investments has rolled out a target volatility strategy, the Fidelity VIP Target Volatility Portfolio. For its part, USAA is planning to roll out the USAA Global Managed Volatility Fund on July 12, according to a registration filing.

The VIP Target Volatility Portfolio primarily invests in U.S. equities, foreign developed market equities, U.S. investment grade bonds, and cash through a combination of underlying Fidelity mutual funds as well as ETFs and index futures.

The USAA fund will combine a portfolio of domestic and foreign equity and debt securities with the use of alternative investment strategies, according to the SEC filing.

Vanguard Debuts Emerging Markets Gov't Bond Index Fund

Vanguard has rolled out the Vanguard Emerging Markets Government Bond Index Fund, the company's first international fixed income offering available to U.S. investors.

ALPS Offers MLPs in a VA

ALPS is launching what it says is the first of its kind variable annuity product. The ALPS|Alerian Energy Infrastructure Portfolio delivers energy infrastructure and MLP-focused investments to the variable annuity market.

ARRIVALS

Martino Replaces Milano at T. Rowe Price

Daniel Martino has replaced Joseph M. Milano as portfolio manager of the T. Rowe Price New America Growth Fund (PRWAX) effective last Monday, May 13.

Martino is currently manager of the T. Rowe Price Media & Telecommunications Fund (PRMTX). Effective May 13, Paul D. Greene II joined Martino as co-portfolio manager of the Media & Telecommunications Fund, and effective October 1, 2013, Greene will become sole portfolio manager.

SEC's Karpati Joins Pru

Bruce Karpati, the former national chief enforcement officer of the SEC's asset management unit, has been named chief compliance officer for Prudential Investments.

Karpati spent more than a decade at the SEC, most recently as national chief enforcement officer for its asset management unit, leading enforcement efforts involving investment advisers, investment companies, mutual funds and private funds. His appointment at Prudential was effective last Monday.

TIAA-CREF Taps Leary as Asset Management Chief

TIAA-CREF has appointed Robert Leary as executive vice president and president of TIAA-CREF Asset Management, effective June 24, 2013.

Leary will oversee all aspects of TIAA-CREF Asset Management. He will drive the group's strategy across investments, distribution and operations, and help expand the company's third-party business. He most recently served as president and chief operating officer of ING U.S.

Federated, Manulife PM Moves

Roberto Sanchez-Dahl, and Paolo Valle, formerly managers of the Federated Emerging Market Debt Fund, have joined Manulife Financial as managing directors and senior portfolio managers. The two will manage an emerging markets debt strategy for institutional clients and certain wealth management businesses of Manulife Financial and John Hancock.

Federated Investors has named Ihab L. Salib as senior portfolio manager of Federated Emerging Market Debt Fund. Salib serves as senior vice president, senior portfolio manager and head of the international fixed-income group at Federated where he manages a variety of global portfolios spanning all sectors of the international markets.

 

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