Special Program Root Tag

By acquiring A.G. Edwards, Wachovia Corp. will gain $1.1 trillion in client assets and almost 15,000 financial advisers. Wachovia shelled out $6.8 billion to buy the national brokerage.The deal is expected to close in the fourth quarter of this year and the integration should be complete by first quarter of 2009.

The American Medical Association and a startup Internet company called Sermo, which serves 15,000 doctors, are now partnering on the online service for doctors in which they openly discuss new medical developments, trends and patient outcomes—and with another side effect that could benefit fund companies and other investment firms.

The world’s largest asset manager, Man Group, plans to list a hedge fund on the New York Stock Exchange for the first time, in a ploy to get more money from U.S. investors, according to the Wall Street Journal.A trend is occurring in the industry that has hedge fund managers increasing their assets through closed-end fund vehicles that can be bought by both institutional and individual investors and bypass regulatory restrictions on direct hedge-fund investments.

After falling for more than a century, the average retirement age is once again climbing, according to the Bureau of Labor Statistics, Dow Jones reports. Twenty years ago, only 18% of people in their late 60s were still working. Today, that’s 29% and expected to continue to climb.

MFS Investments Chief Executive Officer said he doesn’t expect assets to grow as much as the 20% they climbed in the past 12 months, due to “more normal” market conditions of about 8% a year, Reuters reports. As the firm’s assets hit the $200 billion market in April, the company celebrated by giving each of its employees either $200 or a windbreaker inscribed with the figure.

The Chinese government will punish firms involved in the so-called “backdoor” listing of GF Securites, as it continues to crack down on insider trading and other market irregularities that analysts say are rampant, Reuters reports.

Economists said that even if former Federal Reserve Chairman Alan Greenspan is correct that China’s stock market is headed for a “dramatic correction,” it won’t upset China’s economy or spread to other markets and economies around the globe, Bloomberg reports.

Although the Shanghai composite index tumbled 6.5% on Wednesday following the news that the China’s Ministry of Finance had tripled the stock trading tax to 0.3%, fund managers said they don’t expect the move will entirely stall the country’s exceptional, 1-1/2-year bull run, Reuters reports.

In line with the priorities that Democrats in Congress have set, the 31 Democratic state attorney generals are most likely to shift their focus away from abuses on Wall Street to populist concerns of consumer protection, health and safety, Forbes.com reports.

Socially responsible investing funds are becoming more mainstream, with 401(k) plans and 529s increasingly offering them and more Americans becoming in tune with environmental, governance and social issues, The Wall Street Journal reports.

Aegon will take a 49% stake in Industrial Fund Management, a medium-sized fund manager in China. The company will be renamed Industrial-Aegon Fund Management.

Vanguard filed a registration statement to offer a new exchange-traded fund that tracks the same index as one of Barclays’ iShares funds, the MSCI EAFE (Europe, Australasia, Far East) Index, MarketWatch reports. But Vanguard’s fund will only change 15 basis points, as opposed to the 35 basis point fee on the iShares fund.

As mutual funds and hedge funds increasingly outsource risk management, investors could benefit through lower fees and better transparency, The New York Times reports, citing a PricewaterhouseCoopers survey of more than 150 investment management executives. About 31% said they plan to outsource more business functions over the next two years.

As the 77 million Baby Boomers begin to retire and cash out of their stock and mutual fund holdings, the market will not spiral into a bear market, according to a new study from the National Bureau of Economic Research called “New Estimates of the Future Path of 401(k) Assets,” The New York Times reports.

A Chinese government think tank says that U.S. hedge funds have invested $50 billion in Chinese markets, according to the South China Morning Post. The Hong Kong-based newspaper quoted research from Zhang Yuewen at the Chinese Academy of Social Sciences that notes that hedge funds account for about one-third of the mutual fund managed assets in China. Zhang also urged the government to increase its oversight of the short-term deals made between these offshore hedge funds and Chinese investors. 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

Despite a 14 % increase in profits, Royal Bank Of Canada missed second quarter earnings estimates, due mainly to a lag in trading revenue in the U.S., Bloomberg reports. Profit form the U.S. rose 8 %, outpacing growth in Canada. However, expenses increased 18% due mainly to the acquisition of AmSouth Bancorp and Flag Financial Corp., in addition to the opening of new branches stateside. In the past year, the bank has opened 70 new commercial branches in the U.S. and upped its workforce by 2,267. In the investment banking division, profits fell 15% to $350 million Canadian, due mainly to a 7.2 % drop in fixed income trading revenue. Earnings at the wealth management group, on the other hand, rose 22%, propelled mainly by a 25 % surge in mutual fund sales. In this respect, RBC beat analyst expectations. “The mutual fund business has been going fantastically,” Dundee Securities analyst John Aiken said. RBC and Toronto Dominion dominate fund sales in Canada, where the industry had its greatest growth in nine years. For the period ending April 30, net income rose to $1.28 billion Canadian, or 98 cents Canadian per share, compared to $1.12 billion Canadian, or 85 cents per share. 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 mutual fund is cheering as the New York Stock Exchange proposal to ban brokers from voting on behalf of some shareholders has been modified to exclude mutual funds, according to the Wall Street Journal. The revised plan was submitted to the Securities and Exchange Commission last week stating that the mutual fund industry is exempt from an NYSE proposal to eliminate broker voting on behalf of shareholders who don’t vote shares themselves. The current NYSE rules allow members brokers to vote shares on routine matters, including uncontested elections, if the owners whose shares they hold don’t submit their own votes within 10 days of the shareholders’ meeting. The original proposal was never released, but garnered opposition from the Investment Company Institute, which believed the proposal would make it more difficult and costly to elect fund directors while adding little benefit to fund investors. Paul Schott Stevens, president of the ICI, said last week that the fund group is pleased to support the amended proposal. As a general matter, “the election of directors is not routine,” said Catherine Kinney, NYSE Euronext president and co-chief operating officer, at an SEC meeting last week. However, smaller public companies, which also raised similar arguments as the mutual fund industry, are not exempt under the revised proposal. The NYSE said its decision to shield only fund companies came even though its advisory group had “considerable concern and discussion about the potential problems facing smaller issuers as a result of the potential rule change, as well as discussion about the similarities and differences between smaller operating companies and investment companies.” 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.

Zurich-based UBS on Friday said it plans to shed its 20.7 % stake in private Swiss bank Julius Baer, which the world’s fifth-largest bank acquired as part of a 2005 financing deal involving the sale of three private banks and a hedge fund. Baer’s modest size and quickly growing business make it a takeover target analysts told Reuters. “There are more people that are interested than people who are not interested, and UBS could certainly sell (the stake) at a premium when there is a single investor,” said Dirk Becker, an analyst at Kepler Equities. The market value of Julius Baer is estimated at about $16 billion. Baer, which holds $30 trillion in assets, is Switzerland’s third largest wealth manager and has been growing quickly especially in Asia. One way a buyer might finance the deal would be to jettison Baer’s GAM hedge fund, Reuters quotes one anonymous source as suggesting. Global entities including Citigroup, HSBC, Barclays, and Deutsche Bank are each looking to grow their wealth management businesses. In an effort from giving a boost to any such competitors, one Helvea analyst suggested UBS will sell its stake either to a group of institutional shareholders or to Baer itself. 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.

Quantitative tools are gaining popularity with fund shops in Indian as the market demands improved standards of research, according to Reuters. Quantitative research has been useful to Sanjay Sinha of SBI mutual fund and a few other analysts who are using the research, as it senses the market undercurrents across sectors and capitalization earlier than other methods might. “With the markets now becoming fairly deep with over 2,000 stocks traded on any given day, you need to keep an eye on activity throughout the market,” said Sinha. Keeping the research from being used more widely is high costs and paucity of historical data, experts stated. “Quantitative analysis takes away the personal bias of the individual,” said Gaurik Shah, associate at Mape Admisi Securities, a brokerage that relies heavily on quantitative research. “[The] quantitative tools we use have given decent returns and our models have outperformed by 20-40% to the broad market,” he said. Aalap Shah, a derivatives analyst with Dolat Capital Markets, said the firm was able to sense early the oncoming correction in the derivatives market in February. Dolat advises its clients to be cautious after implied volatility on options strayed out of normal trends in December, Shah said. However, there are challenges to quantitative research as it is in beginning stages in India and the pool of talented researchers is small. The biggest challenge might be the shortage of data available. The Indian market is very young and it is very difficult to test some of the tools on indexes or stocks, said Gaurik Shah. 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.

Alpha magazine dropped its first shoe when it released the salaries of the top 100 hedge fund managers, with the top master of the universe, James Simons, earning an astonishing $1.7 billion in 2006 and the top 25 an average of more than half a billion. In 2006, the compensation of this top 25 soared 57% from the year before and 127% from 2004.