Fund performance

The average 401(k) account balance rose 13.5% in the second quarter to $53,900, which was perhaps behind the trend for more investors to increase their deferral savings rate than to decrease it, Fidelity Investments reports.

In order to survive this marathon recession, experts say fund companies will need lean cost management operations with the stamina to endure prolonged, stagnant growth.

Now that the global economy appears to be on the road to recovery, investors are gradually beginning to step off the sidelines and take on more risk, as markedly proven by fund flows. Money market fund assets surged to $3.9 trillion in March, but have since fallen back to $3.6 trillion. Meanwhile, investors steadily withdrew $259 billion from equity funds between June 2008 and March, but in the past four months, they have since have moved $50 billion back in.

The average return of U.S. equity mutual funds in the second quarter, a stunning 19.77%, was certainly welcome news, but it gave investors absolutely no reason to believe the stock market was turning around. After all, what fundamentals were there?

Hedge funds continue to do well, rising 2.4% in July, bringing year-to-date returns to nearly 12%, according to HedgeFund.net. In fact, it’s the best first seven months of the year for hedge funds in a decade.

Alternative assets under management fell 37.25% from a year earlier, to $2.496 trillion as of March 31, according to a survey.

Many mutual funds geared toward a special type of socially responsible investing, green investing, are outpacing the Dow and the S&P 500, BusinessWeek reports. And given the environmentally conscious and alternative energy initiatives of the new president, valued at more than $80 billion, they could continue to outpace the general markets.

Bond funds attracted seven times the amount of money than stock funds in the three weeks between July 1 and July 22, despite the impressive 9.9% rise in the Dow Jones Industrial Average—signaling very different investor behavior than previous rallies, USA Today reports. As the paper puts it, “The stock market may be roaring, but mutual fund investors are snoring.”

The recent drop in financial markets has rekindled the demand for safer, conservative financial products like stable-value funds.

Sometimes we seek out opportunities for change. Other times change is thrust upon us. Market conditions in the past 24 months have produced seismic shifts in the mutual fund industry, and several business drivers have emerged that will shape our industry's future. As asset managers, distributors, suppliers and others evaluate their next steps, these demands will drive strategies and shape new solutions.

Financial advisers have been going independent or switching wirehouses in record numbers since the economic crisis began at the end of 2007, and brokerages are scrambling for ways to get them and their loyal clients to come back.

Bond funds are not as reliable as they have historically been, which his creating some headaches for investors, The Wall Street Journal reports.

Retail investors appear to be regaining some nerve, The Washington Times reports.

Christopher Ryan, managing director of Fidelity International, told Bloomberg he is particularly optimistic about China, citing the economy’s diversification and the government’s stimulus plan.

Massachusetts on Friday subpoenaed four brokers to obtain sales, revenue and training records for leveraged exchange-traded funds: Ameriprise, UBS, LPL and Edward Jones.

UBS has stopped selling leveraged exchange-traded funds, saying that the funds don’t conform to its belief in long-term investing due to the “short-term nature of these securities.”

Securian Retirement is urging sponsors that offer stable-value funds in their 401(k) plan to be aware that there can still be risks in such funds, depending on their holdings and the stability of the financial markets. Such funds need to be monitored, Securian says.

For anyone in a rush to snap up wealth management firms, or who thinks Wilmington Trust Corp. is poised for a buying spree, Ted T. Cecala says think again.

Firms attempting to prepare and strengthen their risk management systems in this rapidly changing regulatory landscape are finding it's a bit like trying to hit a moving target.

NEW YORK -- Most retirement planners agree that retirees should maintain some equity exposure during retirement in order to keep up with inflation and a retirement that could last three decades or longer, but what this level of exposure should be -- and whether or not the government should set some parameters -- is being widely debated.