T. Rowe Price won a total of 26 awards,
"The companies we are honoring with a Lipper Fund Award have proven to be first-rate in managing client assets," said Tom Roseen, Lipper’s research manager for the U.S. and Latin America. "These award-winning funds are subject to an exacting methodology to distinguish the leaders from their competitors and are to be congratulated for delivering consistently strong risk-adjusted performance.”
Loomis Sayles won the award for Best Bond Fund Group – Large, and State Farm won for Best Bond Fund Group – Small. PIMCO won Best Equity Fund Group – Large, while Parnassus Investments won Best Equity Fund Group – Small. Janus won Best Mixed-Assets Group – Large.
"After a year like 2009, this is a nice award to receive," said Dan Fuss, vice chairman of Loomis Sayles and a portfolio manager. "This was a good example of 'same bonds; new prices'. We did our homework, stuck to our conviction about the bonds we owned, and shareholders have been rewarded. We now face a very different market and we're hard at work ensuring that our long-term returns are just as satisfying."
The U.S. is one of the 23 countries covered by Lipper's 2010 fund awards program, which is part of the Thomson Reuters Awards for Excellence.
Fidelity Pledges $1.6M to Advertise on Time iPad
The Fund giant is among the first to sign up for the new device that brings bells and whistles to print.
Because Apple hasn’t even launched the iPad tablet yet, and most publishers and marketing firms still don’t have completed apps, which Apple must approve, there are many unanswered questions about how it works for readers and advertisers.
Nonetheless, because there are so few marquee spots available, advertisers are lining up at the door to participate in the iPad, which launches April 3, The Wall Street Journal reports. Already, Time magazine has reportedly signed up
Each Time contract is worth $1.6 million, for eight ads costing $200,000 apiece.
By comparison, The Wall Street Journal has signed up six advertisers, including Coca-Cola and Federal Express, for a four-month advertising package for $400,000
Advertisers are reportedly drawn to the interactivity, video, flash, social networking, navigation, touch technology, downloads—and even games—that can be embedded on the iPad. Wired magazine, for instance, is offering different levels of this type of functionality to advertisers, and it is asking advertisers to sign insertion orders for eight ads in a single issue for the video functionality.
“Some of the things you can do are just mind blowing,” said Steve Pacheco, director of advertising for FedEx. “You are taking something that used to be flat on a page and making it interactive and have it jump off the page.”
Financial Reg Reform Gets a Shot in the Arm from Healthcare
Even leading Republicans say the bill is unstoppable.
By Stacy Kaper, American Banker
WASHINGTON — President Obama's successful fight to pass healthcare reform has given a bill to revamp the financial system a dramatic boost, lawmakers from both parties said Wednesday.
Two Senate Republicans said they now consider the bill unstoppable, and predicted it would win at least some GOP support when the legislation moves to the floor after lawmakers return from a two-week recess in mid-April. The Republicans were backed by
"I know there are Republicans I serve with in the Senate who frankly don't want the 'just say no' policy when it comes to major legislative initiatives," Dodd said. "So I'm much more optimistic in light of what happened on healthcare. Frankly, the outcome [on] healthcare has strengthened our hand in reaching out to people that would like to be part of the solution."
Political analysts are still dissecting the healthcare vote, but some GOP lawmakers said they cannot treat financial reform the same way. Opposing the bill would likely be seen as siding with Wall Street at a time when there is still widespread populist anger against banks. Lawmakers also acknowledged that while healthcare is a personal issue to many voters, they see regulatory reform differently.
"This is so unlike the healthcare debate," said Sen. Bob Corker, (R-Tenn.) "I don't think people realize that this is an issue that almost every American wants to see passed. There will be a lot of pressure on every senator and every House member to pass financial regulation."
Although the Senate Banking Committee approved the reform bill 13 to 10 on Monday evening without any Republican support, Corker agreed that Democrats are gaining momentum and have a chance to win GOP votes without much further compromise.
"The White House feels they have the wind at their back. I think the dynamics have changed since the bill came out of committee," Corker said. As a result, Corker said, the Republicans have lost a chance to win significant changes to the legislation.
"The leverage that existed up until Monday night is gone, and I think it's far more difficult to get us where we need to go," he said.
Indeed, although Dodd pledged Monday he would continue to work with Sen. Richard Shelby (R-Ala.), the Banking Committee's top Republican, on the bill, he said Wednesday that he did "not necessarily" need Shelby's support. "We're out of committee. I'm dealing with 99 other senators, not just the 22 in the Banking Committee," he said.
The situation is far different from just two days ago, when analysts predicted that Dodd would have to make major concessions to garner Republican support on the floor. The healthcare victory has altered the political calculus in Washington, and many observers said Republicans are not likely to uniformly oppose the bill.
That view appeared to be shared by Sen. Judd Gregg (R-N.H.), who told reporters Wednesday that the reform bill is unstoppable. "Reg reform will pass regardless of [whether] it's a good bill or a bad bill," he said. "My hope is we will reach a compromise that is bipartisan and substantive. certainly 100% chance it will pass."
Gregg agreed Republicans could not oppose the bill in the same way they fought healthcare reform. "It's not the same type of issue," he said. "This is a technical type of issue. The politics of this are pretty limited."
Some analysts said Democrats now run the risk of overreaching if they attempt to move the Dodd bill further to the left.
"It emboldens the White House and leadership for a bill more to their liking," said Brian Gardner, an analyst with
Democrats appeared intent Wednesday on presenting a united front on the issue. Appearing alongside Dodd after a meeting with Obama,
"This is now the No. 1 issue the American public will be focusing on, and every single issue in contention, I think, would benefit from that."
Although there are considerable differences between the House reform bill passed in December and Dodd's legislation, Frank said they could all be worked out. "If you look at the House and Senate versions of a major piece of legislation, we are closer on this set of rules than we usually are," Frank said. "That's not an accident."
Survey: Wealthy Believe in Themselves over Advisors
By Pamela J. Black
March 24, 2010
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When it comes to making investment decisions, the wealthy “seem very self confident and will turn to their peers before turning to advisors,” according to the Knight Frank/Citi Private Bank’s global Wealth Report 2010.
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The majority of high-net-worth individuals that responded ranked their own expertise as their most important source of information, with their colleagues in second place. Personal bank or wealth manager and independent financial advisor tied for third place.
The report, which was released this week, said that an exception is South Americans, who look first to their personal bank or wealth manager. Most respondents felt that information on the web wasn’t reliable and was the least important source of advice.
According to the survey, the high net worth individual had most of their assets in property, hedge funds and equities. Bonds were the least popular investment. Gold, derivatives and cash also scored low. Respondents expected the best performance this year to come from equities (31%), followed by hedge funds (25%) and property (21%).
Despite a seemingly aggressive investment stance, 72% of high-net-worth individual respondents didn’t expect their personal wealth to grow more than slightly this year.
The report also revealed that the countries which lost the most millionaires (or people with investable assets of at least $1 million) last year were India and Portugal, both down 24%, to 85,000 and 13,000 respectively. Losing the fewest millionaires were Chile and Columbia with 20,000 millionaires and the United Arab Emirates, with 20,000 millionaires, all down only 2%. By comparison, the United States, with by far the world’s most millionaires at 2.5 million, was down 19%.
ETFs Zero In On International Growth With Small-Cap Funds
By Stacy Schultz
March 24, 2010
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As the global market crawls out of the recession, the rapid proliferation of narrowly-focused exchange-traded funds, which slowed as markets crumbled in the past two years, is beginning to gain momentum again.
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One new trend to take note of: Providers are launching single-country small-cap ETFs. Through these funds, providers are offering exposure to domestic growth in specific emerging and developed countries, hoping to avoid the large cap companies that correlate closely with the still struggling global economy.
The trend garnered attention when Market Vectors launched its Brazil Small-Cap ETF in May, said Paul Justice, an ETF strategist at Morningstar Inc. [MORN]. The fund is considered successful, Justice said, returning 44.89% and 22.98% in the third and fourth quarters respectively, though it is down 7.53% year-to-date through March 22. The fund held $699.2 million in assets as of Feb. 28.
Much of the success is due to the fund's ability to avoid many of the materials companies and energy names that serve the global markets, Justice says. Instead, it moved into the small-cap sector, capitalizing on the emerging consumer and the health of Brazil.
That too is the thinking behind IndexIQ, the index-based alternative solutions provider that launched the first two in a series of single-country index-based small-cap ETFs on Tuesday. To Justice, IndexIQ is the first to follow Market Vectors in a trend that is here to stay.
“Throughout the year a lot of ETF issuers are going to come up with small-cap country exposure, partly because there’s a small cap idea that they give you more domestic stock exposure,” he said. “A lot of smaller countries have a few very large names on their stock exchanges that either tend to be utility companies, a large bank or a global titan that compete on a global level, so those are going to be large-cap and not necessarily giving you exposure to that domestic economy. And so now you have this new demand for small-cap exposure within those countries.”
The IQ Canada Small Cap ETF seeks to replicate the performance of the IndexIQ’s IQ Canada Small Cap Index, before fees and expenses. The index lost 61.54% in 2008, gained 116.44% last year and is up 2.24% year-to-date through Feb. 28.
Rich in natural resources, Canada climbed out of the economic crisis of 2008 and 2009 with significant strength, largely due to its hefty capital reserves and conservative lending practices, according to IndexIQ. It is the fifth largest oil exporter in the world and the second largest natural gas exporter, according to IndexIQ. The country also contains the second largest proven oil reserves. CNDA will offer exposure to the country’s rich oil and gas space.
The IQ Australia Small Cap ETF seeks to replicate performance of the firm’s IQ Australia Small Cap Index, before fees and expenses. The index lost 58.03% in 2008, gained 87.63% last year and is down 7.87% year-to-date through Feb. 28.
The only major country to avoid a recession by the technical definition (it experienced only one quarter of negative GDP, a recession is defined as two consecutive quarters of decreasing GDP), Australia has also proved its resiliency to the global downturn. It is one of China’s largest and fastest-growing trading partners, according to IndexIQ, and the world’s fourth largest producer of coal and gold.
Australia and Canada’s focus on the commodity space, however, could inhibit the success and popularity of the new ETFs, Justice said. In both countries, whether in small- or large-cap funds, commodity names dominate the portfolio, he says. Because of their small populations, as compared to the wealth of natural resources they offer, both economies are largely tied to the performance of such resource stocks.
Small-cap funds in these countries “don’t give you the small-cap exposure the [BRF] did, and so I’m not so sure that they will resonate with investors the way the small-cap Brazil ETF did,” Justice said. “Plus, there are similar shared risk factors for Australia and Canada.”
Survey: Investors May Feel Sting of Delayed Retirement
Despite strong market returns in 2009, a majority of advisors have found that their clients will have to work three to five years longer in order to maintain their standard of living during their retirement, a recent survey revealed.
By Ruthie Ackerman
March 25, 2010
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Despite strong market returns last year, a majority of financial advisors have found that their clients will have to work three to five years longer to maintain their standard of living during their retirement, according to a survey.
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Brinker Capital, an investment management firm, announced the results of the first quarter Brinker Barometer, a gauge of financial advisor confidence and sentiment regarding the economy, retirement savings, investing and market performance in 2009 and 2010. The study, which was released Monday, was conducted online by Brinker Capital in February and March and is based on the responses of 247 advisors affiliated with insurance companies, independent broker-dealers and in solo practices.
Although the majority of financial advisors were satisfied with 2009’s performance, the study highlighted that 63% of advisors said that up to three-quarters of their clients will have to work from three to five years longer to make their retirements viable.
“Clearly 2009 ended on a far more positive note than it began, which meant that financial advisors are generally optimistic about the way the markets and US economy were trending than they had for quite some time,” John Coyne, the president of Brinker Capital, said in a press release. “Their general level of optimism notwithstanding, the majority of advisors note that their clients still have to delay retirement plans to make up a savings shortfall, and concerns about potential tax increases still abound.”
Sixty one percent of advisors said they’re either “highly confident” or “somewhat confident” about the nation’s economic outlook; 67% say they’re “highly confident” or “somewhat confident” about 2010 market performance; and 93% indicate they’re “highly confident” or “somewhat confident” about the future of their practices.
In terms of investing strategy, 88% of advisors believe emerging markets will outperform the United States again in 2010, while only 34% plan on allocating additional assets to exchange traded funds. Seventy seven percent are allocating additional assets to guaranteed insurance products and 56% are allocating additional assets to cash or other short-term strategies.
There is still uncertainty ahead, which advisors fear will cause some pain. Topping the list of concerns are tax increases, followed by budget deficit, double-dip recession, another financial meltdown and healthcare reform.
Hedge Funds Eke Out Small Returns in February
Hedge funds were up just slightly in February, mostly in line with global markets. But is the lack of skyrocketing returns making investors increasingly averse to these high-fee funds?
By Stacy Schultz
March 25, 2010
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Most major equity markets rallied in February, driving the Morningstar 1000 Hedge Fund Index up 0.3%. The Morningstar MSCI Hedge Fund Index eked out small returns as well, up 0.7%.
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But large swings in risk aversion and a myriad of mixed signals from the economy made investors wary last month — and created problems for hedge fund strategies, said Nadia Papagiannis, an alternative investment strategist at Morningstar [MORN].
That confusion was apparent in the performance of Morningstar’s Global Trend and Global Non-Trend Hedge Fund Indexes, which rose 0.1% and 0.3%, respectively. Both of these funds trade derivatives in stocks, bonds, commodities and currency markets. While some funds in the indexes found opportunity in U.S. Treasury bonds and the U.S. dollar in relation to the Euro, others were hindered by the turn-around in the global and oil markets, according to Morningstar.
The most notable outlier to the upward global trajectory in major markets was Europe, which suffered from international concerns about the strength of the Euro and the financial stability of Greece. The Morningstar Europe Equity Hedge Fund Index, for example, was down 1.6% for the month, mostly in line with the MSCI Europe NR Stock Index, which declined 2.0%.
Emerging markets and Japan also struggled last month, thanks to the inevitable tightening of monetary policy that occurred in China, after fears over inflation in the communist country exacerbated. Both the Morningstar MSCI Emerging Markets and the Morningstar MSCI Japan Hedge Fund Indexes were down 0.7%. However, increased mergers and acquisitions activity in Asia drove the Morningstar Corporate Action Hedge Fund Index was surprisingly up nearly 2.0%, according to Morningstar.
In January, Morningstar’s hedge funds overall saw $2 billion in outflows, marking the second consecutive months investors pulled money from the funds. Hedge funds, known for their lack of transparency and high fees, used to justify these barriers with above-market rates. Now, with smaller returns in a transparency-focused environment, industry analysts indicate that investors may be finding this increasingly difficult.
ING Bullish on US Economic Recovery
ING Solutions Funds Portfolio Manager Paul Zemsky has been bullish about the economy since the second quarter of last year and he expects strong growth to continue.
By Ruthie Ackerman
NEW YORK—ING Solutions Funds Portfolio Manager Paul Zemsky has been bullish about the economy since the second quarter of last year and he expects strong growth to continue.
“We think people are too pessimistic,” he said at a breakfast briefing that
Zemsky said ING Solutions Funds foresees strong earnings from corporations since productivity is expected to be phenomenally strong. The fund is also overweight commodities and high-yield, or junk, bonds.
In the international arena, Tycho van Wijk, the lead portfolio manager of ING’s Global Opportunities Strategy, is seeing a global economic shift that will impact investors.
“The growth-oriented ambitions of emerging economies are clashing with the preservation-of-wealth goals of advanced economies,” he said. “The balance of powers will continue to shift, and no new equilibrium is to be expected in the short or even mid-term.”
This will mean that investors need to reinvent, Wijk said, and be ready for higher volatility, which may include higher peaks and deeper troughs. Wijk’s solution is to allocate funds to seven different investment themes: economic growth, digital revolution, demographic shifts, changes in consumer behavior, industrial and technological innovation, environmental change, and social and political change. Instead of thinking in binaries – international versus domestic stocks - Wijk’s team invests in themes that capture the most important changes in the global economy.
Meanwhile, Chris Diaz, co-manager of the ING Global Bond Fund, expects 3% growth in the United States and flat growth in the Eurozone.
There was a lot of concern in the room about sovereign debt risk after Portugal’s credit rating was downgraded to AA-minus by
Diaz questioned whether the euro can survive an International Monetary Fund intervention given the large impact smaller countries have on the Eurozone as a whole. Diaz said he is long on the U.S. dollar relative to the pound, the euro and the yen since the dollar has proven itself as the flight to quality even during the downturn.
Zemsky summed up the briefing with this kernel of investment advice: “If you believe in economic growth and a recovery buy high-yield bonds and equities.”
