Special Program Root Tag

Benjamin Edwards III, retired chief executive of A.G. Edwards, questioned and commented on the $6.8 billion deal with Wachovia Corp. Thursday at a shareholder meeting, according to the St. Louis Post-Dispatch. Edwards, who retired in 2001, called the merger “devastating news” and said his heart goes out to the Wachovia and Edwards employees who will lose their jobs when the firms merge. “We wonder if being number two is worth thousands of careers,” he said. Wachovia Securities is moving its operations to St. Louis from Richmond, Va., and once the merger is complete, it will be the nation’s second-largest brokerage firm, with 15,000 brokers. Robert Bagby, A.G. Edwards’ chairman and chief executive, said after the meeting that he wasn’t surprised by Edwards’ speech because he knew he was opposed to the deal. The merger “is a huge opportunity for the city and for A.G. Edwards. It’s a huge opportunity for our clients to move forward,” said Bagby. It “puts us in a position to never be a target again.” In his speech, Edwards questioned whether the company’s values will endure after the merger. “We thought we had built something special, a company that puts clients first, employees second and shareholders third,” he said. Later adding, “I believed we had the people, the client base, the physical plant the capital and the operating ethic to give us another exciting and enjoyable 120 years.” Edwards also said A.G. Edwards’ employees “feel lied to and betrayed.” He urged the company to preserve Edwards’ branch network and to resist the urge to close any branches over the objections of a branch manager. If the company does that, he said, it risks losing the manager and the brokers at that branch. 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.

The Securities and Exchange Commission voted on Wednesday to allow mutual funds to voluntarily join the 40 publicly traded companies currently submitting data to the SEC in interactive extensible business reporting language (XBRL). Fund companies will be able to submit information on their investment strategies, risks, returns and costs in XBRL.

After a day's worth of discussion among industry executives, regulators, academics and investor advocates about the utility and future of 12b-1 fees, one theme emerged: something should be done.

NEW YORK-Including exchange-traded funds in defined contribution platforms isn't just a good idea for plan sponsors, it's darn close to a fiduciary duty, said panelists at a recent ETF summit held here.

Score one for the mutual fund industry.

SEC Judge Dismisses Late-Trading Case Against Former J.B. Oxford Lawyer

American Century Names Lurito Growth Equity CIO

NEW YORK-As unified managed accounts become more well known among investors and financial advisers, firms creating them are faced with questions of what functions to outsource, along with related technology issues and compliance rules, according to panelists at Financial Research Associates' "Unified Managed Account" conference here last week.

NEW YORK-Changes to how small and mid-tier asset managers obtain research may be coming, as soft dollars continue to be scrutinized and execution costs are being unbundled, according to panelists at an AQ conference, "Navigating the Research Marketplace."

MainStay Investments announced Thursday that it has introduced three 130/30 funds, one core, another growth and the third international.

Increased environmental awareness has lead to increased investment options, according to The Wall Street Journal.

Nuveen Investments’ agreement to be bought by a private equity group led by Madison Deerborn Partners, may indicate more deals in the future between the two non-traditional partners, according to The Wall Street Journal.

A federal judge has dismissed a lawsuit that four workers at Deere & Co. brought against their employer and Fidelity Investments, trustee and recordkeeper of Deere’s 401(k) plan, Reuters reports. The suit, which sought class-action status, accused the two companies of not revealing a revenue-sharing agreement and of charging unreasonable fees.

Wachovia Securities was fined $2 million by the NASD for improperly supervising its fee-based brokerage business between 2001 through 2004.

Milton Shaffner, 92, is tired to prying bulky mutual fund publications out of his mailbox, and is lobbying the industry and regulators to cut back on paper, the South Florida Sun- Sentinel reports. “I don’t think anyone sits down and reads a 242-page report on his funds,” the retired lawyer said. So he wants fund companies to stop clogging his mailbox and spending shareholders’ money to produce and mail them. The Pompano Beach man also questions why he gets book of information dedicated mainly to funds he does not own, rather than only the pages relevant to his holdings. Of course, Shaffner’s contention that investors don’t read these lengthy disclosures—seven of 10 never looks at them when choosing funds—dovetails with Securities and Exchange Commission Chairman Christopher Cox’s initiative to move mutual fund shareholder communication online. It also complements the Investment Company Institute’s push to streamline paper disclosures. Shaffer has written on several occasions to the SEC, to his fund company, and to the local paper. He applauds these streamlining efforts. And although he probably won’t go online to get information himself, he’s happy if it will keep paperwork out of his mailbox. “Maybe if they save $5 million in unnecessary expenses, they’ll increase the dividend instead of cutting it,” Shaffner said. 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.

Morningstar has raised the bar for the stewardship grades it has been giving to mutual fund companies since 2004 for sound corporate practices, namely: regulatory history, fees, fund manager incentives, board governance quality and corporate culture. Morningstar said it will now change underlying criteria for four of the above areas, leaving fund manager incentives alone. Specifically, Morningstar said it will pay closer attention to corporate culture, increasing it from 20% of the grade to 40%, as well as independent boards. In addition, Morningstar said, firms with poor regulatory histories will lose points.

The Securities and Exchange Commission voted on Wednesday to allow mutual funds to join the 40 publicly traded companies currently submitting data to the SEC in interactive extensible business reporting language (XBRL).

Madison Dearborn Partners has bid to acquire Nuveen Investments for $5.75 billion. In addition, the private equity firm would absorb $550 million of Nuveen’s debt, valuing the total price of the transaction at $6.3 billion.

Matt King, a financial adviser with Bell Investment Advisors, recently said that investors should have international exposure, Reuters reports. However, they shouldn’t focus on single-country funds, he said. In fact, King even recommended that investors sell out of two strong-performing but specialized funds, the T. Rowe Price Latin America and the Matthews China funds.

Although commodity prices have swung widely recently, institutional investors continue to value them as a key diversifier, Reuters reports.So far this year, commodity indexes have underperformed major equity benchmarks. The best performer this year, for instance, is the Dow Jones-AIG Commodity Index, up 5.9% year to date, compared with the Dow Jones Industrial Average’s 9.3% climb. Nonetheless, large institutional investors continue to allocate between 2.5% and 5% of their portfolio to commodities, knowing that they swing in the opposite direction of equities and fixed income.