Fund performance

Older workers are much less confident about the outlook for their retirement security than they were two years ago, according to a survey of 2,200 workers by Watson Wyatt. Understandably, those with a pension plan are far more confident than those handling their own retirement savings through a 401(k).

With yields on money market funds dropping to all-time lows and more fund companies absorbing fees to prevent breaking the buck, even then, performance is an issue for investors, The Wall Street Journal reports. As a result, bank savings accounts that yield 2% on average are attracting more money.

Vanguard will be merging the $6.7 billion Vanguard Treasury Money Market Fund into the $21.8 billion Vanguard Admiral Treasury Money Market Fund in August, and it has already closed the Vanguard Federal Money Market Fund to new accounts and additional purchases.

Investors’ unease with the stock market, despite its 40% rise since early March, does not augur well for the mutual fund industry, the Chicago Tribune reports; assets in equity funds remain at half the level they were before the crisis began in late 2007.

Although credit markets are improving, money market funds are struggling to deliver positive returns, and as a result, since late last year, nearly all money funds, perhaps as many as 90%, have been waiving fees to avoid breaking the buck, The Wall Street Journal reports.

From recommending different products to rethinking their risk management strategy, some financial advisers say they have changed their approach in the wake of last year's market slump.

In a challenge to one of mutual funds' strongholds, exchange-traded fund providers are targeting defined contribution plans.

How far the 401(k) has come since employers first introduced the savings plan in 1981. And how far it has yet to go. 401(k)s, I predict, will become universal in our lifetimes, supplanting all forms of pension plans.

While index funds already have a place in the lineup of most 401(k) plans, a proposed federal mandate to require at least one index fund option in these plans is intrusive and unnecessary, according to industry experts.

After several failed attempts, the Securities and Exchange Commission is again revisiting the contentious debate on shareholder proxy voting.

How far the 401(k) has come since employers first introduced the savings plan in 1981. And how far it has yet to go. 401(k)s, I predict, will become universal in our lifetimes, supplanting all forms of pension plans.

The U.S. economy will begin to recover by the end of the year but unemployment is another matter, fund managers speaking at the Morningstar conference said.

With investment banking earnings set to improve this year, many executives will, despite government intervention, get bigger bonuses this year, according to compensation consultant Johnson Associates.

Persistent withdrawals brought Man Group’s revenues for fiscal year ended March 31 down by 22.8% to $2.49 billion and net profits down 85% to $503 million from $3.47 billion a year earlier.

In November, analyst consensus was that the S&P 500 would decline 17% for 2008 but rebound by 30% this year, The Wall Street Journal reports.

Hedge funds with $100 million or less in assets underperformed hedge fund giants for the first time since 1996, PerTrac Financial Solutions found.

Citing in-house investment expertise, New York’s pension plan appears to be trailblazing the way for other pensions to feel confident investing directly in hedge funds, not through funds-of-funds, Dow Jones reports. A year ago, New York’s state pension fund had $5 billion invested in hedge funds-of-funds. Today, at $500 million, that’s a mere shadow of its former self.

The seven largest fund houses in Boston saw assets under management surge 8% in April, boosted by a revival in the stock and bond markets and renewed faith by investors, who poured $42.1 billion into the funds during the month, the Boston Business Journal reports. The previous month, investors withdrew $6.3 billion.

Quantitative modeling took a tremendous hit during the credit crisis, and investors who favored such systematic investment strategies are, once again, favoring active stock pickers, The Wall Street Journal reports.

At the Morningstar Investment Conference in Chicago this week, speakers are expected to concentrate on the economy and how asset management firms should respond to the state of the financial markets.