Fund performance

New Internal Revenue Service accounting rules aim to reconfigure the way investors report gains and losses when they sell stocks and mutual funds by putting the burden on those who handle the transactions.

For years, Americans enjoyed the "wealth effect," the sense that their assets were gaining value rapidly enough that they didn't have to save much. This perception of ever-expanding prosperity gave them freedom to spend lavishly and enjoy life. The effect was a function of feeling wealthy as well as being wealthy.

WASHINGTON - Mutual funds remain a sound investment choice, and will, once again, grow through the perseverance of American ingenuity. Investment firms must stress this to investors to restore their faith.

Investors are regaining their appetite for risk, particularly emerging markets funds, The Wall Street Journal reports.

Asking investors to properly maneuver their 401(k) plans in a market like this is akin to an airline pilot stepping aside and telling passengers to take the controls mid-flight. Workers never asked for so much responsibility in controlling their own retirement future, and most have no idea what to do now that the plane is losing altitude. In fact, most investors seem to be in shock and are doing nothing at all. A persistent problem with the mutual fund industry is the lack of education among its customers about how to manage their own retirement savings. Ignorance was bliss when equities were historically delivering 10% average returns, but the tide has turned. The first wave of Baby Boomers realized they did not have enough savings and decided to bet on risky equities to make up for the shortfall. That gamble backfired when equities in nearly every asset class plummeted last year. Now vastly underfunded as they approach retirement, most Boomers are skeptical they will ever get it back. Financial information is very confusing to the uninitiated. The vocabulary is difficult, the products are complicated, and the professional advice isn't always right. If the fund industry can encourage its customers to become more financially savvy, without stepping on any conflict-of-interest tripwires, its investors will be able to shop for the best products at the lowest cost and keep more assets under management. Younger workers-particularly those in my generation-are getting an early and valuable lesson about market volatility. Buy-and-hold investing is obsolete in an era where one bad year can wipe out 20 years of gains. Younger workers still have plenty of time to more than make up for losses, but will be wary going forward of future bear markets. These investors are plugged in to a myriad of information available instantly at their fingertips. As technology continues to advance, this will lead free-thinking investors who will be able to take responsibility for learning how to navigate their savings. Funds would be wise to become the source and the inspiration for that learning. (c) 2009 Money Management Executive and SourceMedia, Inc. All Rights Reserved. http://www.mmexecutive.com http://www.sourcemedia.com/

WASHINGTON --Mutual funds remain a sound investment choice, and will, once again, grow through the perseverance of American ingenuity. Investment firms must stress this to investors to restore their faith.

As investors have grown more conservative, fund companies are rethinking their entire product lineups, Dow Jones reports.

Legg Mason lost $325.1 million in the fiscal fourth quarter ended March 31, or $2.29 per diluted share, compared to a loss of $255.5 million, or $181per diluted share, in the fourth quarter of fiscal 2008.

Investors who have been laid off or who have switched jobs may be in for a rude awakening when it comes to their 401(k). Not only has its value declined steeply, but the investment advisor may not honor redemptions in funds whose assets are tied up in any type of risky, illiquid investment, The Wall Street Journal reports.

Growth funds are beating value funds handily so far this year, leading some fund managers to believe the market may be back on track, The Wall Street Journal reports.

With more than nine in 10 shareholders reporting Internet access, the SEC's summary prospectus rule represents more than just an opportunity to provide an easier-to-understand document. The new rule provides a unique chance to refine the overall shareholder communication model.

Last year was a brutal one for mutual fund performance, but that has not prompted bankers to revamp their lineups of preferred funds and fund families-possibly because they wisely erred on the side of caution and prudence in the first place.

Robert L. Reynolds loves a challenge. Without question, he certainly faces one. Trying to restore Putnam Investments' stature among America's top mutual fund companies after the firm's involvement in the trading scandal of 2003 and depletion of assets, now at $99 billion, a mere quarter of what they were in 2000-is a formidable task.

NEW YORK - Most financial transactions are dependent upon trust, but the last two decades of deregulation have eroded that trust and created a global crisis of confidence, according to experts who met last week at a global forum in the heart of New York's financial district.

The only way the financial services industry will recover from the brutal market and financial crisis of the present is to concentrate wholeheartedly on rebuilding investor trust. That was the overriding theme of this year’s Fund Forum Asia, the Singapore Straits Times reports.“High-profile frauds such as the Madoff and Stanford cases have made investors very nervous,” said David Seymour global head of investment management for KPMG. “The investor community is rattled, and confidence will not return easily.”To counter this sentiment, Seymour said, “Rebuild trust and confidence through strong customer relationship management. Historically, the most successful investment management firms have been those which focus clearly on their customers.”And while the market outlook currently remains weak, Seymour is convinced that investment management will bounce back in a “tremendous” way. “Those investment funds which keep their nerve, concentrate on improving transparency and communication with customers, and get themselves in shape for the new financial world order stand to enjoy an exciting and profitable future indeed.”Investors are currently seeking regular income-generating, low-risk products,” said Lester Gray, CEO of the Asia-Pacific arm of Schroders.

Harry Lange, manager of the $18.6 billion Fidelity Magellan Fund, appears to be back on a roll, up 10.6% so far this year after a brutal 2008, Dow Jones reports. Large technology and financial bets took the fund’s value down nearly 50% last year.

Morningstar reported first quarter net income of $25 million, a 8.2% increase from $23.1 million in the first quarter of 2008. However, excluding acquisitions and the impact of foreign currency conversions, revenue declined 7.1%.

Affiliated Managers Group reported that its first quarter profits plunged 80% to $6.1 million, or 15 cents a share, from $31.2 million, or 81 cents a share, in the first quarter of 2008.

Standard & Poor’s has downgraded Fidelity Investments’ parent FMR Corp. one level from AA-/A-+ to A+/A-1, citing a 22% decline in assets in 2008 to $1.25 trillion and trailing performance of some of its equity funds.

The Conference Board Consumer Confidence Index rose 12 points in April to 39.2 (1985=100), up from 26.9 in March., and the Expectations Index rose considerably to 49.5 from 30.2 the previous month.