Special Program Root Tag

Although only 2% of the $14 trillion in institutional assets is currently invested in hedge funds or hedge funds-of-funds, in coming years, that is expected to considerably rise, and with it, dramatic changes in hedge funds, Dow Jones reports. Most notably, hedge funds will offer far greater disclosure, fairer fees and lower-cost, passive choices.

The recent volatility in international markets hasn’t taken the luster off of global investing, USA Today reports. A poll of 668 owners of stock by the newspaper and Gallup found that 72% of those who own foreign stocks plan to “make no changes” to their holdings. Only 12% said they would sell some of these securities. However, only 12% said they would increase their holdings.

With the recent interconnectivity of the world’s stock markets proven by the 9% decline in China’s major exchanges heard—and felt—around the world, it is becoming apparent that investors looking for international diversification might just be getting more of the same, The Wall Street Journal reports.

Calling China a “global economic leader” and noting that over the past five years, the U.S. and China spurred more than 50% of global growth, Treasury Secretary Henry M. Paulson, Jr. told business leaders in Shanghai that “China’s continued economic success is not only vitally important to the people of China, but also to the rest of the world.”

Will exchange-traded funds, separately managed accounts, private equity and hedge funds become more popular among investors, much as the iPod and MP3 have overtaken CDs and CDs overtook cassette tapes, Investor’s Business Daily asks. The possibility seems entirely real, as ETFs took in only 2% of the $7 billion inflow into funds in 2000 and a whopping 40% of the $60 billion inflow last year.

The number of Americans who believe the economy will deteriorate over the next year has doubled from January to 31%, a Wall Street Journal/NBC News poll of 1,007 people found. Nonetheless, 46% of those who have $5,000 or more invested in the market believe the market will rise in value over the next 12 months, while a third believe it will hold steady, The Wall Street Journal reports. Only 16% foresee it falling. The numbers are important, as the poll was conducted March 2-5, just after the wild turbulence in the markets. However, in January, 55% said they believe the market will rise.

A federal judge has tossed out a Securities and Exchange Commission case against three former Putnam executives who it had accused of using accounting chicanery to hide a $4 million loss in Cardinal Health’s 401(k) plan that resulted from failing to invest funds in the plan on a day the market rose, The Wall Street Journal reports.

The Securities and Exchange Commission has dropped a civil fraud case it filed in March of last year against investment firm Global Crown, sister company J&C Global Securities and two of its executives, Rani Jarkas and Antoine Chaya, for allegedly exaggerating performance of a hedge fund they ran, Cogent Capital Management, in order to hide losses.

The Securities and Exchange Commission has announced the dates and locations of its regional CCOutreach seminars. Taking place between April and June, they will be held in: Atlanta, Baltimore, Boston, Charlotte, N.C., Chicago, Cleveland, Denver, Hartford, Conn., Los Angeles, Miami, Memphis, Tenn., New York, Portland, Ore., Richmond, Va., San Francisco, Seattle and Wilmington, Del.

As lifecycle funds—easy to use “set it and forget it” funds—continue to pick up traction in 401(k) plans, financial advisers are beginning to warn investors against the high fees many of these funds-of-funds tend to charge, Dow Jones reports.

Dismissing the $750 billion decline in stock valuation last Tuesday as mere speculation rather than a reduction in intrinsic value, Vanguard founder John Bogle urged investors to “stay the course,” The New York Sun reports.

Chinese investors’ enthusiasm for stocks and mutual funds continues unabated despite recent market volatility, the Xinhua News Agency reports. On the first trading day that First State Cinda Fund Management introduced a new mutual fund, the fund took in its full sales quota of 9 billion yuan, or $1.1 billion.

Noting that because fees in 401(k) plans are hidden from investors they can be unfairly high—between 3% and 5%—a senior Capitol Hill legislator called for better transparency on Tuesday, Reuters reports.

Sun Life Financial is hoping to reach out to Boomers scared off by the “use it, or lose it” nature of guaranteed annuity income with a new program that allows investors to “store” their income, tax-deferred.

Rydex Investments on Monday launched a managed futures mutual fund and announced it plans to offer more alternative investment offerings.

Mutual funds focused on Japan are popular and are at the top of the international list this year, according to Dow Jones.

Because the first exchange-traded funds to hit the market were based on mainstream indexes, they offered relatively safe investments, but with new ETFs tracking increasingly narrower slices of the equity, commodity and currency markets, that is no longer the case, the Philadelphia Inquirer reports.

Even as the world markets continued to slide on Monday—with $800 billion erased from the U.S. markets since the decline began on Feb. 27—giant money managers said they continue to have faith in the market will rise by more than 10% over the next year, Bloomberg reports.

Analysts at investment banks are giving less time to mutual fund portfolio managers who call them looking for stock insight and more time to hedge funds, Bloomberg reports. The reason is because hedge funds are more lucrative clients, given their needs for prime brokerage, securities loans and complex trades, and managers at investment banks are instructing their analysts to cater to these preferred clients.

A federal judge has dismissed a lawsuit by the Securities and Exchange Commission against two executives at a Citigroup transfer agent who realized nearly $100 million in savings from an affiliated transfer agent but kept the profits for the company rather than to lower fund expenses.