Special Program Root Tag

So-called target-date and target-risk asset allocation funds portend to make investing easier for 401(k) participants, but the proliferation of these products in recent years can make choosing which to offer a headache for sponsors.

Competition, if nothing else, keeps companies constantly looking for the next innovative product or strategy that will bring more assets to their firm. That is why many asset management firms are choosing to offer the increasingly popular 130/30 strategies as the benefits of shorting stocks can outweigh the benefits of going long, according to the report "130/30: From Rationale to Implementation" by New York-based Merrill Lynch.

BISYS Fund Services may be all but history now with various servicing units having been parceled out to other acquiring firms. But troubles are still brewing among at least some of the 27 mutual fund clients that the firm had questionable distribution arrangements with dating back to the 1990s. And now, fund advisors are opening their wallets in an effort to make investors whole.

The Department of Labor estimates that automatic enrollment in 401(k) plans, as protected under the Pension Protection Act, will add between $45 billion to $90 billion a year to the plans, which had $3.6 trillion in assets under management in 2006, according to the Investment Company Institute.

General American Settles With SEC for $3.3M

William Blair Names Chief Operating Officer

Merger and acquisition (M&A) activity in the asset management industry is booming, and demand is not likely to stop anytime soon, nor are the competitive prices buyers are willing to pay for the deals. However, market turmoil and a more challenging leveraged finance environment could temporarily cool the enthusiasm of some private equity shops for asset managers and derail initial public offerings,

The acquisition of CheckFree Corp. of Norcross, Ga., by Fiserv of Brookfield, Wis., announced on Aug. 2, has raised questions as to whether CheckFree's investment services division will stay or go, perhaps being independently sold off to the highest bidder. The unit provides the separately managed account (SMA) technology, including client reporting and portfolio management, for investment managers and broker/dealers.

While income-oriented closed-end funds have attracted billions of dollars in assets, with some of them offering income of as much as 9% a year, they are taking a beating along with many other stocks, The Wall Street Journal reports. And in the past six weeks, some of them have tanked as much as 20%.

Investors contributed $70.29 billion to money market funds in the week ended Tuesday, according to iMoneyNet’s Money Fund Report, Reuters reports.

The Securities and Exchange Commission has distributed $55.6 million to 200,000 Banc One investors whose holdings were depleted by market timing. The fair fund resulted from a 2004 settlement in which Banc One Investment Advisors agreed to pay $10 million in disgorgement and $40 million in civil penalties.

Some companies may not be able to repay commercial paper loans, also known as short-term IOUs, and that could hurt money market funds, which often put a great deal of money into such debt, the Los Angeles Times reports.

Bear Stearns is being sued by four securities litigation law firms that are representing institutional and retail customers in the sub-prime mortgage hedge funds that recently closed up shop.

The credit crunch causing worries in the global markets has the potential to cause the collapse of a major hedge fund that could disrupt markets even more Moody’s Investors Service warned, Dow Jones reports.

Amid the market turmoil prompted by mortgage concerns, investors are fleeing equity and bond funds and moving into money market funds and U.S. Treasuries, The New York Times reports.

With the recent departure of Ellyn McColgan from Fidelity Investments as head of distribution earlier this month, financial advisers and analysts are saying they are, indeed, wondering about the firm’s future, the Boston Herald reports.

TIAA-CREF has launched a new $50 million advertising campaign centered around a simple idea that it hopes will differentiate itself from other financial service companies: its dot.org status, The New York Times reports. In conjunction with this, it has also launched a new website, powerof.org.

Blame the ratings agencies for the subprime crisis, The Wall Street Journal reports. In 2000, for instance, Standard & Poor’s said that “piggyback” mortgages, whereby borrowers take out a second loan to pay the down payment, were as safe for lenders as standard mortgages, and this led to a boom in subprime mortgages. S&P, Moody’s and Fitch Ratings all gave high marks to securities based on these loans.

Despite threats from hedge funds, exchange-traded funds and separately managed accounts, mutual funds continue to grow in popularity, Investors Business Daily reports.

Most companies that offer retirement plans to their employees risk fiduciary liabilities, according to Fiduciary Risk Management, a new subsidiary that CPA firm Habif, Arogeti & Wynne has launched specifically to address the issue.