Loss of investor confidence continues to weigh on scandal-plagued fund companies, CBSMarketWatch reports. The mutual fund industry reaped a stunning $26 billion in net new assets in stock and bond funds last month, but a handful of asset managers that are linked to market-timing scandals were frozen out of the windfall.
Janus Capital and Putnam Investments were the biggest losers in terms of asset flows last month, despite fresh settlements with securities regulators. Putnam bled $2.5 billion from its stock and bond funds in April, according to Financial Research Corp., and investors withdrew $1.4 billion from Janus, which lost an additional $2 billion in flows the previous month. Putnam has lost an astounding $10 billion of customer assets in the first four months of the year.
Other mutual fund providers that are plagued by the market-timing and late-trading scandal, including Alliance Capital Management and MFS Investments, are also hemorrhaging assets, but to a lesser extent. Alliance lost $258 million of assets in April on top of $234 million in March, while MFS dropped $662 million in April and $597 million in March.
"Investors have a very long memory in terms of penalizing those funds that they perceive as having been involved in the abuses," commented fund consultant Burt Greenwald.
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.