Fund performance

A significant number of older workers 50 or older, 44%, have decided to delay their retirement age, and 34% overall have upped their target date for leaving the workforce, Watson Wyatt found in a February survey of 2,200 employees. By comparison, only 25% of those under age 40 have changed their plans for years in the workforce.Nonetheless, among all workers 65 is still the average age at which they expect to retire.Among the older workers, when asked what factors have impacted their decision to delay retirement, 76% said declining 401(k) balances, followed by 63% citing high healthcare costs and 62% pointing to high costs of living.“The economic crisis has affected many workers’ retirement plans and nest eggs, but those nearest to retirement have been especially hard hit,” said Dvid Speier, senior retirement consultant at Watson Wyatt. “Older workers do not have the time to offset declining retirement account values, either by recouping their investment losses or significantly increasing their savings rate. For many, the only choice is to delay retirement.”With older workers remaining on the job longer, that could present hiring issues for employers along with higher benefits costs, noted Lisa Canafax, another senior retirement consultant at Watson Wyatt. For that reason, employers might want to reconsider defined benefit plans.

Hedge funds returned 4.06% in May, the largest monthly gains since February 2000, according to the Credit Suisse/Tremont Hedge Fund Index. Year-to-date, hedge funds tracked by the index have risen an average of 6.72%.In the month, emerging markets funds were the strongest performers, delivering 6.96%. “The emerging markets sector has experienced a significant turnaround over the last three months, as risk appetite seems to be returning to the markets,” said Ovlicer Schupp, president of Credit Suisse Index. “Investors are encouraged by positive signs of global growth and risking commodities prices.”Year-to-date, emerging markets hedge funds are up 12.43%. Convertible arbitrage also did well in May, rising 5.81%; the category is up 19.12% YTD.

Ninety percent of American investors are frustrated about financial losses in the past year, according to “Make the Move,” a survey by the Charles Schwab Corp. One in four is considering leaving their current financial services firm and/or financial adviser.

For most Baby Boomers, even younger ones, the recession has done such a number on their retirement savings that they are gearing up to work longer, set aside more now and live a more modest lifestyle in their so-called golden years, USA Today reports.

While there have been reports of portfolio managers easing back into stocks, one-third of them are still sitting on record amounts of cash, SmartMoney reports.

In a survey of hedge fund executives attending the Global Alternative Investment Management conference in Monaco this week, 65% said they feared that the economic crisis will drag on, Reuters reports.Another 18% said things could even get worse. Only 17% said they thought it was over.“Bailouts [of banks] have worked somewhat, but problems have been transferred to governments,” said Peter Rigg, an executive with HSBC Private Bank who is one of the pessimists surveyed.Fifty-nine percent said they think Europe is suffering the worst, while only 35.5% said conditions are the most precarious in the U.S.“The worst problems are in western economies that have relied on leverage to grow. Economic power is going East,” said Jaime Castan of RMF Investment Management.But not everyone thinks that Asia is insulated, including Marc Lasry of Avenue Capital, who commented: “There’s a huge fiction out there that Asia is going to be fine, but it needs a strong U.S. and Europe to grow.”Asked how the crisis could compromise hedge fund strategies, executives said they were most concerned about liquidity, the lack of alpha and risk management. That said, the investment style that most, 28%, are optimistic about are distressed/event driven, followed by global macro (24%), managed futures (17%) and general arbitrage (10%).

To help parents and their children alike manage their finances better, Wells Fargo is promoting online budgeting and savings tools available on its website, and releasing the findings of a survey of parents on their children that demonstrate a generational knowledge gap.

Only 376 hedge funds liquidated in the first quarter of the year, down 52% from 778 that shut their doors in the fourth quarter of 2008, Hedge Fund Research said. The number that liquidated in the first quarter represented 4.05% of the 9,050 total number of hedge funds, and the number that went out of business the previous quarter was 7.77%.

The number of people who believe their financial security is worsening is now 45%, down from 49% in April, a survey by Country Financial found.

Hedge funds are returning to the practice of leveraging, with some levels as high as 50%, Reuters reports. Nonetheless, risk-taking, even by hedge funds, is not expected to return to pre-crisis levels.

After dropping 38.9% in 2008, slightly worse than the S&P 500’s 37% decline, the average stock mutual fund is up 9.9% year to date, quite a bit better than the index’s 5.3% return, The Wall Street Journal reports.

Although there have been reports of one-third of employers cutting back on or eliminating 401(k) matches, for the most part, they have continued to add other features to the plans to increase participation and investment rates, Charles Schwab found. And that has helped most workers stay the retirement savings course.

NEW YORK -- Investors tend to stay quiet about financial products they don't understand as long as the profits keep coming in, but when the tide goes out and profits fall, they want answers.

A recent cartoon in The New Yorker surely sums up many retirement investors' feelings toward their financial advisers: It depicts them being sacrificed to a volcano.

Before the bottom fell out of the markets last year, most asset management firms thought they already had robust risk management processes in place. Now they're not so sure.

Shares in publicly traded mutual fund management companies have soared 54% this year, compared to approximately 5% for the Standard & Poor's 500 index, but that growth may be about to slow down as fund companies catch up on paying expenses they have been putting off, USA TODAY reports.

Mutual fund managers are moving back into the stock market, finally putting cash they have been holding onto for more than a year back to work, MarketWatch reports.

Affluent investors' confidence increased in May for the third consecutive month, according to a survey by Spectrem Group.

Hedge funds posted their best monthly performance in nine years, with the HFRI Fund Weighted Composite Index rising 5.2% in May, Hedge Fund Research indicated.

Citing the positive effects of diversification and continued contributions, Vanguard announced that the median decline in the three million defined contribution accounts it administers fell 17% in the 15 months ended March 31, as opposed to the market’s overall 44% decline.