Fund performance

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.

U.S. News Media Group has created an online portal scoring 4,500 funds by integrating the rankings of Morningstar, Lipper, Zacks, TheStreet.com and Standard & Poor’s.

Investment managers around the world are cautiously optimistic about stocks in the coming year but more guarded about bonds, Towers Watson found in a survey of 98 managers with a total of $13.3 trillion of assets under management. They foresee economic growth, albeit modestly.

Average 401(k) balances ended 2009 at $64,200, rising 28% for the year and 5.7% in the fourth quarter, Fidelity reported Wednesday, citing the activity of its 11 million participants in more than 17,000 defined contribution plans.

To enable portfolio managers of its target-date funds to respond more nimbly to extreme market volatility, starting in April, AllianceBernstein will allow these funds to move up to 20% of their assets from equities and real estate investment trusts into bonds and cash.

The financial crisis has made a permanent impression on American consumers, who are likely to save 6% or more of their income over the next decade, translating to as much as $800 billion stashed away each year, according to a new study by Allianz Group.

UBS Wealth Management Americas reported net asset outflows of $11.2 billion in the fourth quarter as the division struggled to regain its footing in the competitive U.S. market. UBS blamed the outflows on advisers leaving the firm and taking clients with them as well as limited recruiting of experienced advisers.

Commodities, particularly precious metals funds, have been big sellers in recent months, but their good fortune reversed in January, when seven of the worst-performing mutual funds turned out to be concentrated on mining stocks.

An industry group developing best practices for 403(b) retirement plans is coming closer to streamlining these plans to make them even more similar to 401(k) plans, but first they will have to get everyone to agree to speak the same language.

Investors are about to test drive 401(k) plans with a 21st Century whole new look and feel.

NEW YORK - Financial experts think 2010 could provide many interesting opportunities in the realm of wealth transference, particularly with the temporary, one-year expiration of the federal estate tax and reduction of the gift tax.