Driven by 401(k) contributions and the increasing popularity of exchange-traded funds, stock sales of major mutual fund companies have significantly outpaced those of more traditional stocks and bonds, according to a report from USA Today.
Lipper's Management Company index, which gauges the success of the nation's largest publicly traded mutual fund company stocks, has surged 15.3%, versus a 3.5% gain for S&P 500, in the last three months.
Interestingly, fund shops caught in the recent scandal have rebounded to become among the most profitable. For example, after watching its value tumble nearly 74% during the last bear market, the stock of Denver-based Janus Capital took another hit when regulators slapped it with a $225 million fine for its role in the scandal. In the last three months, however, its stock is up 32.6%. New York-based Alliance Capital saw its stock value go from $9.1 billion to $1.5 billion during the bear market and then paid a $600 million in regulatory fines in 2003. Its stock is up 23.9% since September.
"In both companies, it seems like performance is improving," David Haas, an analyst at Fox-Pitt Kelton in New York.
Another outstanding performer is precious metals fund manager U.S. Global Investors. The San Antonio, Texas, shop has witnessed, on average, a 20.5% increase in its stock value in 2005. Since September, the stock price has shot up 91.8%.