Fund performance

Mutual fund and other institutional investors are moving heavily into financial stocks, believing they probably hit their lowest point in the first quarter and are poised for sharp gains, according to strategists at Oppenheimer & Co.

Risk management has taken on a whole new meaning after the crazy behavior of markets during the past 18 months.

Cash is flooding into municipal bond mutual funds at a record pace as investors become more comfortable taking on risk and spiriting money out of safe havens. A heartier risk appetite in financial markets has lifted a broad spectrum of asset classes.

The Securities and Exchange Commission is considering making significant changes to money market mutual funds because there is still a danger that these funds could be unable to meet redemptions when investors begin to step off the sidelines en masse and move back into equity markets.

Seven out of 10 money managers surveyed believe the world economy will improve within the next 12 months, and already, they are putting their money back to work in the stock market, as they are bullish on corporate profits, according to the Merrill Lynch survey of fund managers for May.

Even though Fidelity’s mutual funds are performing strongly, with 62% in the top half of their category, the firm is looking for a new chief investment officer, Reuters reports. By comparison, in 2008, only 36% of the firm’s funds were in the top half.

Few investors changed their saving or investing habits in 2008, Hewitt Associates reports, citing data from 2.7 million participants. However, equity fund allocations reached record lows.

The investment community is hopeful that with a little tweaking, target-date funds could be the ideal solution for getting apathetic investors into an age-appropriate asset allocation.

Those hoping for a return to the good old days of self-regulated, self-correcting markets need to face reality: Those days are over.

A line has been drawn in the sand, and anyone with an interest in banking stocks will have to pick a side.

Investors have begun to embrace developed markets, Reuters reports.

Hedge funds rose 4.3% in April, according to HedgeFund.net. And year-to-date, they are up 4.5%, compared with a 2.5% decline in the S&P 500 Total Return Index.In the month, performance gains added $40 billion to hedge funds’ total assets. With redemptions totaling $35.1 billion, total assets under management ended at $1.697 trillion. Outflows certainly have steadied. In January, investors took $166.4 billion with them to the exits. In February, they redeemed $37.5 billion, and in March, $51.7 billion.Since the third quarter of 2008, redemptions have totaled $815.3 billion, and in that period, performance brought down assets by another $425 billion.The strongest hedge fund sector in April was global equity, and the only sector to turn negative was commodities.

Long-term mutual funds netted $13.51 billion in the week ended May 6, according to the Investment Company Institute, marking the eighth straight week that the funds have taken in money, for a total of $78 billion.Stock funds took in $8.17 billion, up markedly from $465 billion in the previous week, prompting some traders to believe the end of the bear market might be near.U.S. equity funds took in $9.85 billion, while international equity funds lost $1.68 billion.Bond funds netted $3.83 billion, down from the $5.61 billion they took in for the week ended April 29.Separately, money market funds lost $2.17 billion in the week ended May 6, following four straight weeks of outflows.

Advisers are showing signs of optimism after months of market doldrums, according to a new survey by broker/dealer Securities America of 180 of its top producers.

Few investors changed their saving or investing habits in 2008, Hewitt Associates reports, citing data from 2.7 million participants. However, equity fund allocations reached record lows.

With more millionaires loading up on cash and fixed income, financial advisers are revisiting their fee structure, Investment News reports.

An article in The Dallas Morning News warns investors against the wide discrepancies in the glide paths, or asset allocations, of target-date funds. As a result of too much risk, it says, some target-date funds are “missing the bull’s-eye.”

WASHINGTON--Across the board, executives from leading mutual fund companies reported during the Investment Company Institute's General Membership Meeting that investors have held steady during market turbulence, with only 1% to 3% redeeming equity fund shares in the face of huge market drops.

UMB Fund Services, a subsidiary of UMB Financial Co., the listed, Missouri-based multi-bank holding company, added to its holdings JD Clark & Co., an alternative investment firm, in an all-cash deal.

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