Fund performance

Bank of America wants to remind everyone that Merrill Lynch is more than just a sideshow. Trying to move beyond the lawsuits and congressional hearings, BoA will finally start using Merrill for what it intended when it bought the beleaguered investment bank in January: to develop wealth management products.

NEW YORK - After the terrible performance of markets last year, disgruntled investors of all sizes are considering switching financial advisers to someone else, even if their own adviser buffered their portfolio so that it lost less than the market's overall 38% decline.

NEW YORK - Selling retirement income guarantees after a recession is like selling flood insurance after a flood. Timing is everything, and currently the timing could not be better.

Index mutual and exchange-traded funds tied to the S&P 500 Index vary widely on performance, cost and risk, Standard & Poor’s found.

Volatile redemptions from and investments in mutual funds are not just due to market returns but to an entirely different approach investors are taking to fund ownership, according to a new report from ReFlow.

Eighty-four percent of workers who are automatically enrolled in a 401(k) plan stick with the plan, up from 77% in 2007, Charles Schwab found. Participation among all plans rose to 77%, up from 73% in 2007.

Noting the urgency and immensity of their task, global financial leaders are frantically making small and large changes to U.S. Generally Accepted Accounting Principles (GAAP) and international financial accounting standards (IFRS) to make them more similar, and the Securities and Exchange Commission has recently made a single set of standards a high priority.

Since the stock market decline a year ago, there has been much talk of permanent decrease in investors' risk tolerance. Many investors' losses were staggering, goes the refrain, so their tolerance for risk will, for the foreseeable future if not a generation, be substantially lower.

Although American investors have grown much more aware of the risks of investing in stocks and have lower expectations for average annual returns, they do still plan to keep them as an integral part of their retirement portfolios, according to a Vanguard survey conducted in late May.

Stunned by trillions of dollars of losses in the financial crisis, Americans will be investing significantly less in the future, according to a new survey by AlixPartners. Forty-nine percent of the 1,000 people the consulting firm surveyed have either stopped or reduced investing in stocks or mutual funds, 26% have no intention to return to these bedrock financial vehicles in the next three years, and another 27% were unsure whether they had the endurance to return to the markets in that timeframe.

Financial advisers generally prefer to manage a small number of high-net-worth clients rather than a large number of small accounts, but recent advances in automation technology could change this dynamic.

Many financial service companies were only able to survive last year's recession by slashing staff and utilizing automated technology solutions to support customers, advisers, salespeople and their remaining workers.

The investors buying into stocks and sending the Dow up 53% since its March 9 low have continued to be pension plans and hedge funds; retail investors in mutual funds are certainly not driving those sales, the Washington Post reports. Only in the past two weeks have fund companies and financial advisers heard from retail investors curious about re-entering the market.

More than three-quarters, 77%, of 401(k) investors have not made any changes in the past 12 months leading up to April, J.P. Morgan Retirement Plan Services found in a survey titled “Anything But Certain.”

The pace at which the Internet continues to affect communications is nothing short of dramatic. Nearly every type of information is now instantaneously accessible, downloadable and hyperlinked. As we adapt to absorbing ever greater volumes of information, and to the rapid rate at which it comes at us, our preferences as consumers of information are changing.

Workers who had already been investing in their 401(k) for at least five years through 2008 saw their balances drop an average of 24% last year, compared with the S&P 500's sharp 37% decline, the Investment Company Institute and the Employee Benefit Research Institute said.

In 2007, Philip Moses, a Raymond James adviser at First Federal Bank of Florida in Lake City, had a local physician as a client who wanted to diversify his $1.5 million portfolio.

As exchange-traded funds continue to grow in scope and popularity, investment experts warn that some products, such as leveraged and inverse ETFs, may be too dangerous for all but the most experienced hands.

While most funds strictly adhere to their investment mandates, more are permitting their managers to move into cash and bonds as a defensive play. And the strategy proved to be extremely wise in last year’s steep declines.

Hedge funds rose 3.2% in September, slightly behind the S&P 500’s 3.6% gain but beating the Dow Jones Industrial Average’s 2.3% gain, Hennessee Group said. Meanwhile, the Nasdaq advanced 5.6%.