Special Program Root Tag

The mutual fund world may reside far from that of annuities, but fixed annuities have gained momentum as investors have sought out safe havens for their money. While single-digit fixed annuity yields seemed unappealing during the bull market, now, returns not preceded by a negative sign turn heads.(see chart, page 8).

The debate over the housing bubble aside, real estate funds are one of the few bright spots in the mutual fund industry.

T. Rowe Price Chairman George A. Roche said at his company’s annual meeting yesterday that first quarter earnings would fall significantly below the 41 cents per share earned in the first quarter of 2002. The results, which are scheduled to be released April 25, could be 30% lower, Roche said.

In the same breath as announcing its inclusion in the S&P 500 index, Federated Investors yesterday announced that it projects its first-quarter earnings will be $49 million, down 6% from $52.3 million a year earlier.

State Street Corp. will slash 1,800 more jobs on top of the 1,000 recently announced as a part of a cost-reduction package that aims to cut operating expenses by $125 million throughout the remainder of 2003, the company announced yesterday.

While State Street Corp. is planning to eliminate 1,800 people, the firm is also looking to expand its back-office services beyond it existing customer base of seven. Hiring new people to achieve that growth is a possibility, executives of the firm said.

Co-chief executive of Charles Schwab David Pottruck tried yesterday to justify the company’ mutual fund platform increase by saying the volume of phone calls the company receives from investors is increasing, despite the decline in its assets and trading volume, Dow Jones reports.

A number of banks that already offer insurance are adding to or reinforcing their employee benefits operations in a trend that experts say demonstrates the way these banks are focusing on their middle-market commercial customers.

The manager of the Oppenheimer Rochester National Municipals mutual fund, down a steep 7.8% so far this year, has reduced his fund’s exposure to one area that has hurt it badly this year: municipal airport authority bonds back by AMR Corp.’s American Airlines.

Fidelity has launched several new services for advisers: a separate accounts screening program, custody and recordkeeping for alternative investments and charitable management for private foundations.

Franklin Resources, the money and mutual fund manager that operates Franklin Templeton Investments, said it was preparing to pay up to $521.1 million in cash next month to buy back its convertible bonds that mature in 2003, The Wall Street Journal reports.

Actively managed funds beat our their indexed brethren in the first quarter of 2003, according to Standard & Poor’s. In the Standard & Poor's Indices Versus Active Funds Scorecard (SPIVA), analysts found that actively managed mutual funds are better equipped to take advantage of the economic recovery.

U.S. mutual fund investors in taxable accounts paid the government $8.6 billion last year, despite poor equity returns and an eight-year low in total distribution payouts, according to Lipper’s recently released 2003 study, Taxes in the Mutual Fund Industry.

Legg Mason Wood Walker Inc. has started a 529 college savings plan.

Fidelity Investments is purchasing Correspondent Services Corporation (CSC), the clearing unit at UBS PaineWebber, in a move to tap into the clearing business and broaden its base of revenue.

Janus Capital Group announced Tuesday that total assets under management rose to $132.7 billion in March, up slightly from February. The Denver-based fund complex said assets, on average, were about $133.8 billion, a small increase from the previous month. The numbers include its investment management subsidiaries Janus Capital Management, Berger Financial Group and Bay Isle Financial, the company said in a press release.

Principal-protection, bond and hedge funds have been gaining popularity on both sides of the pond.

Playing up their rough-and-tumble investments in distressed companies, hedge funds name themselves with brash, ferocious or outlaw-sounding titles, Reuters reports. Weapons and wild beasts are also points of inspiration.

Northern Trust Global Investments said it has been appointed to advise $300 million of U.S. equity mandates for the fund management arm of France's largest mutual insurer.

Mark Whiston, the new chief executive of mutual fund company Janus Capital, will get a salary of $600,000 this year under a new employment agreement, according to a regulatory filing Monday, Reuters reports.