Fund performance

WASHINGTON—The House reversed Monday's rejection of a bill to stabilize the financial markets approving the measure on Friday with a vote of 263 to 171.

Reserve Management has shut down its U.S. Government Fund, the second fund it has liquidated, and has given no indication yet of when investors can expect their money to be returned.

Money market mutual fund assets rose $12.39 billion for the week ending Tuesday as investors regained confidence in the funds, according to the Money Fund Report, published by iMoneyNet Inc.

Total retirement assets in the U.S. fell 5.2% during the first quarter of 2008, from $18.0 trillion to $17.1 trillion, according to the Investment Company Institute.

In response to scrutiny over its ratings of instruments tied to subprime mortgages, Fitch Ratings has increased its own scrutiny over fund of hedge fund managers, warning that many such funds may not be able to meet redemption requirements if their risks are not closely monitored.

The Reserve will liquidate its Primary Fund and begin returning cash to shareholders, according to an announcement on Monday.

On Monday and Tuesday, immediately after the government announced the opening of its $50 billion insurance program for money market funds, at least eight major fund companies had signed up, including BlackRock, Dreyfus, Evergreen, Federated, Invesco AIM, Morgan Stanley, TCW and Legg Mason’s Western Asset Management.

Evergreen Investments announced Tuesday that its parent, Wachovia Corp., will purchase Lehman Brothers debt held in three of its money market mutual funds: the Evergreen Money Market Fund, Evergreen Institutional Money Market Fund and Evergreen Prime Cash Management Fund.

Private equity firms Bain Capital Partners and Hellman & Friedman acquired Neuberger Berman Monday for $2.15 billion, with the two firms holding equal positions in Neuberger, the firm’s portfolio managers given a “significant stake” and the deal expected to close early next year.

After three hours of contentious debate, the U.S. House unexpectedly rejected a bill for a $700 billion rescue package on Monday — 228 to 205 — that would create a government facility to buy troubled assets from banks. The Dow Jones Industrial Average dropped 777 points on the news.

Many hedge funds will have trouble retaining top managers next year, thanks to terrible market performance across the board and a reward system based on that performance, The Wall Street Journal reports. To retain talent, they will have to tap into profits. Otherwise, they will have to close shop.

Canadian securities regulators have begun on-site reviews of money market funds, fearing their exposure to devalued securities.

Recent moves by the U.S. government to prop up ailing money market funds seems to be helping stem the recent massive run on the funds, another fund implosion like the Reserve's Primary Fund can't be ruled out; managers may be holding investments that turn out to be worthless.

CHICAGO - It often takes an economic crisis before firms really start thinking about risk management.

NEW YORK - Fee-based independent advisers, so far, are winning the retirement income race, beating out mutual fund companies, brokerages and insurance firms in the quest to conquer the 77 million Baby Boomers' estimated $17 trillion in retirement savings and total $90 trillion net worth.

Tax-exempt money market funds began recovering some of the nearly $30 billion of outflows they suffered in the past seven days, but market participants say there's still a feeling of queasiness among traders and investors in the midst of a disconnect between municipal and Treasury securities as the government bailout program unfolds.

The Royal Bank of Canada has pledged $35 million to help cover clients invested in a money market mutual fund that recently broke the buck, Reuters reports.

One of the biggest arguments against the $700 billion bailout of Wall Street’s bad debt is that by having the government clean up investment houses’ balance sheets, the same firms that caused the problem might make outsized profits in helping the government assess the debt, the New York Times reports.

TD Ameritrade announced Wednesday that it will kick in an additional $50 million to support investors in Reserve Funds’ Primary Fund, whose net asset value fell to 97 cents.

Minnesota U.S. District Court Judge Paul Magnuson has decided to expedite Ameriprise Financial’s lawsuit against Reserve Funds’ Primary Fund. The court will fast-track the discovery of documents and other supporting information.