Fund performance

Japanese mutual funds are headed for record declines this year as assets across the board have suffered losses from a combination of a global recession, plummeting interest rates and a surging yen.

The Securities and Exchange Commission may bring enforcement action against the Reserve Management Company and its managers for possible violations of federal securities laws.Reserve Management president Bruce Bent and his two sons Bruce Bent II and Arthur Bent III, who are senior executives at the firm, have said they will cooperate with an SEC investigation, but "expect to defend vigorously against the allegations."The Reserve's Primary Fund nearly created a panic in mid September when it announced that it "broke the buck," falling below the implied guarantee of $1 per share. Billions of dollars in assets flew out of other money market mutual funds in the following days, but money fund assets have since recovered at most shops, in some cases soaring.Since then, virtually all of Reserve's funds have frozen withdrawals and announced plans to liquidate.Investment firm Ameriprise Financial Inc. is suing the Reserve in federal court for allegedly telling some of its investors in advance that it was in danger of breaking the buck.A few weeks ago, Reserve admitted it gave inaccurate information to investors, saying the Primary fund actually broke the buck five hours earlier than initially reported.

It used to be that dividend-paying stocks got no respect, but after a year like 2008, they are back in their prime, BusinessWeek reports.

Standard & Poor's Friday downgraded 11 major U.S. and European financial institutions as they continue to face pressure from complex financial risks and the weakening economy.

UBS has distanced itself from responsibility for clients’ unspecified losses in one of its Luxembourg mutual funds that invested in Bernard Madoff’s funds, the Financial Times reports. The marketing and subscription documents for the $1.4 billion Luxalpha Sicav fund state that it is not UBS that is responsible for fund losses but U.S. broker/dealer Access Management.

Total assets of money market mutual funds dropped slightly during the week ending Dec. 17, falling $2.96 billion to settle at $3.775 trillion, according to the Investment Company Institute.This marks the first weekly decline in overall assets since late September. During their 11-week run, money fund assets increased by $321.2 billion, or 9.3%.Retail money market mutual fund assets rose by $1.57 billion to $1.284 trillion for the week. Of those, taxable fund assets rose $2.08 billion to $985.75 billion and tax-exempt assets fell $507 million to $297.91 billion.Institutional money market fund assets fell $4.53 billion to $2.491 trillion for the week. Among those funds, taxable assets fell $2.7 billion to $2.306 trillion and tax-exempt assets fell $1.83 billion to $184.7 billion.Money fund assets have increased $630.5 billion year-to-date, or 20%, for what could be their second-best increase ever. The best year was 2007, with a gain of $760 billion in new assets. Institutional assets increased $508.0 billion, or 25.6%, and retail assets have increased $122.5 billion, or 10.5%.The seven-day average yield fell from 0.94% to 0.88%, while the 30-day average yield fell from 1.09% to 1.01%, according to iMoneyNet Inc.'s Money Fund Report.The seven-day compound yield also dropped, falling from 0.95% to 0.89% for the week, and the 30-day compound yield fell from 1.09% to 1.02%.The average maturity of money fund portfolios was 50 days, up from 48.

This was a tough year to launch any new product, and exchange-traded funds were no exception.While ETFs were anticipated by many to overtake mutual funds due to their ability to trade like stocks, the crippling global economic crisis of 2008 put a halt to that growth for now, forcing dozens of new ETFs to close and hundreds more to delay launching until conditions improve.Approximately 70% of the 730 U.S.-based ETFs opened in the last three years, but that pace has slowed significantly this past fall. Many ETFs based on the healthcare industry are liquidating, such as those of New York ETF firm XShares Advisors, and many exchange-traded products based on commodities like oil have been hammered by extremely volatile price swings.Actively managed ETFs also failed to garner widespread support in 2008.

President-elect Barack Obama has named regulatory veteran Mary Schapiro to lead the Securities and Exchange Commission after he takes office next month.

Fidelity Investments has been taking advantage of new changes to 403(b) regulations to expand its presence in the higher education retirement business, adding more than 50 new plans this year.

The U.S. could see a 70% decline in the number of mutual fund families over the next five years unless regulations are changed to put them on a more equal footing with hedge funds, according to a new report by the Boston research firm Celent, titled: “The Global Credit Crisis: Implications for North American Wealth Management.”

Most executives wouldn't consider themselves "fortunate" if they took over one of the largest fund companies weeks before an historic market collapse.

The majority of money managers feel that the U.S. markets are undervalued, according to the Russell Investments “Investment Manager Outlook” for December 2008. The survey polled 206 asset managers on their expectations for the U.S. equity markets for 2009.

Nonprofit organizations are increasingly eyeing global investments as a way to hedge against the market's current volatility, according to the results of a quick poll released by SEI.

Northern Trust Corp. announced Monday that it will cut 450 positions, or about 4% of its workforce, to offset $300 million in third-quarter charges to support its money market funds. This will result in a pre-tax charge of $20 million to $25 million in the fourth quarter, or five cents to seven cents per share.

All asset managers are looking at cutting their budgets next year, according to a survey of 100 firms by SwanDog Strategic Marketing and Financial Research Corp. Two-thirds are looking at cuts of between 10% and 20% and the remaining third are expecting to slash their budgets by 30% or more.

This year's shrinkage in assets under management in U.S. funds could reach 29%, according to Merrill Lynch & Co.

American Century Investments has been hammered by the market downturn but is positioning itself for brisk growth at home and abroad, according to its top executive.

Financial industry analysts are anticipating a wave of new regulations to come out of this financial crisis, but with any luck, mutual funds will escape a direct hit.

Clients withdrew cash from municipal bond mutual funds at a clip not seen since October.

With interest rates falling so low, it will soon cost more for fund companies to run somemoney market funds than their investments, The Wall Street Journal reports. Rather than step in to make investors whole or permit their funds to break the buck, some money funds will likely close.