NEWS SCAN
Nationwide to Defend Against Mutual Fund Lawsuit
It looks like Nationwide Mutual Insurance Company will have its day in court come January 2014 to defend itself against a mutual fund lawsuit.
That's because NorthPointe Holdings, a domestic-equity firm dedicated to serving institutional and high-net-worth investors, is looking to pursue its lawsuit against the Columbus, Ohio-based insurer and its various entities alleging "fraud, lack of good faith and fair dealing, and breach of contract."
Gundlach, Gross Say Worst Is Probably Over for Treasuries
Bond managers from DoubleLine Capital Jeffrey Gundlach to Pacific Investment Management Co.'s Bill Gross are telling investors the worst may be over for Treasury bonds after 10-year yields rose to a 22-month high.
Gundlach and Gross are telling investors not to panic after comments by U.S. Federal Reserve Chairman Ben Bernanke two weeks ago that the central bank may reduce its asset purchases sent markets lower across the world.
RESEARCH
Freeman & Co. Optimistic on Asset Management M&As
Asset management deal activity rose during the first four months of 2013 over the same period in 2012, according to a new report by Freeman & Co.
Specifically, Freeman & Co. reports that 51 asset management deals were announced globally in the first four months of 2013, representing a 12% annualized increase over 2012 and marking the second year of double-digit growth in deal activity.
Cerulli Highlights Advice Gap for Asset Managers
Eighty percent of investors under the age of 40 don't feel like they are getting adequate financial advice from their advisors, according to new findings from Cerulli Associates, leaving the doors wide open for asset managers and retirement plan recordkeepers to fill the advice gap.
"Investors under the age of 40 are often overlooked due to the focus on the Baby Boomer generation," stated Kevin Chisholm, associate director at Cerulli. "However, these investors are the key to financial services firms' long-term success."
Mutual Funds Face Ongoing Compliance Challenges
Mutual fund companies are facing ongoing challenges in overseeing their financial intermediary relationships as omnibus processing and the reliance on FIs continue to increase, according to a new survey by Boston Financial Data Services.
Specifically, the survey found that nearly all (96%) of the mutual fund firms anticipate that their obligation to manage FI relationships will increase over the next three years, primarily due to Securities and Exchange Commission interest (92%) and interest at the fund Board level (69%).
Muni Fund Outflows Surge to $4.53 Billion
Municipal bond mutual funds that report flows weekly recorded $4.53 billion in outflows for the week of June 26, Lipper FMI numbers showed, after $2.22 billion of outflows reported the previous week. The past week's outflow was the most in data going back to 1992.
Long-term muni bond funds that report flows weekly had $2.79 billion in outflows. Weekly reporting high-yield muni bond funds recorded outflows of $1.20 billion for the week of June 26.
ETFs Gain $12 Billion in May
Assets of all exchange-traded funds rose in May by $12.14 billion to $1.481 trillion, according to the Investment Company Institute.
Domestic equity ETFs have gathered $222.19 billion since May 2012, and global equity ETFs assets rose $101.46 billion during the same period. At the end of May 2013, assets of bond funds were $257.12 billion and hybrid funds were $1.32 billion. Over the past 12 months, ETF assets rose $365.27 billion, or 32.7%.
Survey Reveals Weak Global Net Inflows
Last year, global asset managers experienced their highest operating margins since 2007, according to a new survey by consultant Casey Quirk and research shop McLagan.
However, net inflows of 1.2% last year - compared with 3.7% in 2007 - increasing fee pressure, and a widening economic divergence among firms post-financial crisis point to growing industry challenges, according to the Performance Intelligence: 2013 Survey Results.
Bad Rep Lingers for Asset Managers
It's not all good news on Wall Street these days.
That's because despite an improving economy and recent record highs in the stock market, nearly half (44%) of financial services companies lost 5% or more business in the past 12 months because of ongoing reputation and customer satisfaction issues, according to new findings by PR firm Makovsky.
PRODUCTS
Franklin Preps Alt Multi-Manager Fund
Franklin Resources, the parent of Franklin Templeton Investments, is readying its first multi-manager alternative mutual fund almost a year after buying a majority stake in K2 Advisors Holdings, a fund of hedge funds manager, from private equity shop TA Associates.
Specifically, the firm is prepping the Franklin K2 Alternative Strategies Fund to allow retail investors access to hedge-like strategies such as long/short equity, relative value, event driven and global macro, according to a regulatory filing.
TCW Offers EM Diversified Fund
The TCW Group has launched the TCW Emerging Markets Multi-Asset Opportunities Fund (TGMAX/TGMEX), which will bet on sovereign and corporate bonds denominated in U.S. dollars, local currency debt and equities.
The fund is managed by Dave Robbins and Penny Foley, who also manage the $6.6 billion TCW Emerging Markets Income Fund (TGEIX/TGINX), the $403 million TCW Emerging Markets Local Currency Income Fund (TGWIX/TGWNX) and the $492 million TCW Worldwide Opportunities Fund.
ARRIVALS
SEC Names Karpati's Replacements
The Securities and Exchange Commission has named Julie Riewe and Marshall Sprung as co-chiefs of the Division of Enforcement's Asset Management Unit.
Riewe and Sprung have been serving as deputy chiefs of the Asset Management Unit since May 2012. They succeed Bruce Karpati, the unit's inaugural chief, who left in May.
Litman Gregory Adds Senior Investment Advisor
Larkspur, Calif.-based Litman Gregory Asset Management has hired Meredith Shuey Etherington as senior investment advisor, providing investment advisory services to individuals, family groups, foundations, and endowments.
Prior to joining Litman Gregory, Etherington served as a portfolio manager with Brown Investment Advisory & Trust. Etherington also previously served as a financial analyst in the Private Wealth Management division of Goldman Sachs.
Mairs & Power Makes PM Moves
Mark Henneman and Ronald Kaliebe have been named lead managers of the Mairs & Power Growth Fund and Mairs & Power Balanced Fund respectively, effective July 1.
William Frels, lead manager of both funds, moves to a co-manager role in preparation for his retirement in 18 months.
