Fund performance

Many of the biggest institutions that own municipal bonds beefed up their holdings last year as state and local government debt became something of a preferred asset.

Last week, investors did something they have not done in more than a year: They withdrew more money from municipal bond mutual funds than they put in.

Currencies in China, Brazil, Canada and Australia all offer attractive returns in the coming months, compared to sub-par performance from the euro, British pound and Japanese yen, according to Paul McCulley, a fund manager at Pacific Investment Management Co.

Confidence among millionaire investors rose in March, according to a Spectrem Group monthly survey, even as confidence amongst affluent investors declined.

Advisor confidence in the economy and the stock market improved in March as a majority of advisors said they think unemployment has finally steadied.

With investors more prone to invest in alternatives in the wake of the financial crisis, they might want to consider commodities, according to an article written by three university professors and the managing director of the CFA institute in the upcoming issue of Journal of Investing.

NEW YORK—ING Solutions Funds Portfolio Manager Paul Zemsky has been bullish about the economy since the second quarter of last year and he expects strong growth to continue.

Most major equity markets rallied in February, driving the Morningstar 1000 Hedge Fund Index up 0.3%. The Morningstar MSCI Hedge Fund Index eked out small returns as well, up 0.7%.

While investors shunned stock mutual funds in 2009 despite their dramatic comeback, they may finally be poised to return to the stock market via long-term funds, The Wall Street Journal reports.

More than $2 trillion in public pension fund assets could potentially change management as these funds question the advantage of alternative investment classes and seek more reliable, less correlated choices in the wake of 2008 losses.

Redemption fees successfully protect mutual funds from short-term traders, whose churning can serious hurt fund performance, according to “Redemption Fees: Reward for Punishment,” authored by three researchers at Texas Tech University’s Division of Personal Financial Planning.

In their recent shift toward retail deposits, one factor that has helped banks is weak competition from money market funds.

After one 2030 target-date fund lost 41% in 2008, legislators in Washington went up in arms against the fund category. One of the most controversial proposals would have limited equity exposure in such funds, but the industry fought back on the grounds the 40 Act gives asset managers leeway to determine asset allocation on their own.

Canadian investors are missing out of up to $500 million a year in yields by sticking with money market funds rather than higher-yielding, insured premium savings accounts, according to a 21-page report from Fair Canada (Foundation for Advancement of Investor Rights).

Nearly 70% of defined contribution balances have returned to levels prior to the stock market slump of 2008 and 2009, according to a survey by Mercer, a provider of benefits administration outsourcing.

Investors showed uncanny calm, inertia or perhaps even malaise during the recession, with a scant 1% selling out of equity funds at the height of the market volatility in October 2008, Vanguard found.

Baltimore asset management titan T. Rowe Price reported its executives took compensation cuts in 2009, led by CEO James Kennedy, who had his compensation package slashed by 17%.

The fixed investment mandates of mutual funds and the pressures put on portfolio managers to deliver short-term gains take a head-turning toll on gains. Just take a look at the 20% annualized gains of Berkshire Hathaway over its 45 years of existence.

Total assets in exchange-traded funds fell 5.8%, or $45 billion, in January from a month earlier, according to monthly data from State Street.

Hedge fund assets grew last year to $1.96 trillion, levels not seen since the pre-crisis days of 2007, according to Hennessee Group LLC, an adviser to hedge fund investors.