While talk of competition from hedge funds, private equity and alternative investments might be sending shivers down the spines of some mutual fund executives, by many major barometers, the industry seems to be holding up to its rivals, The Wall Street Journal reports.
The Dow Jones Wilshire U.S. Asset Managers Index, which includes the share prices of T. Rowe Price, Janus Capital, Franklin Resources and Federated Investors, is up nearly 10% this year. And net flows into long-term equity and bond mutual funds was $154 billion in the first quarter, a 20% increase from the first quarter of 2006. In addition, the automatic 401(k) enrollment that the Pension Protection Act encourages could also bring more assets to the industry.
Mutual fund firms that have expanded their global, retirement and institutional businesses have made the right moves. Also, compensating their best-performing portfolio managers to keep them from jumping ship to a hedge fund may be costly, but is a good strategy.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.