Fund performance

Whereas financial advisers have long been known for avoiding index funds, and their newer, exchange-traded fund brethren, for fear of not appearing to warrant their fees for providing active advice, that is changing, The Wall Street Journal. Advisers are beginning to see the merits of ETFs’ low fees, tax efficiencies and narrow slices of the market—and instead of leaving it to mutual fund portfolio managers to create a basket of diversified funds, many advisers are now driving asset allocation themselves by creating a basket of ETFs.

Taking dead-aim at Middle America, Allstate Corp. has added guaranteed lifetime withdrawal benefits to its target funds.

An obscure book about mutual funds has begun to arouse the ire of the industry.

In another sign of the difficulties facing the financial services industry, Camulos Capital has told its investors that if they keep nearly $2 billion with the $2.5 billion hedge fund for the next year, the fund will reduce its fee by 75 basis points to 1.25%, The Wall Street Journal reports. And if the fund makes money between Oct. 1 and the end of 2010, it will reduce its share of profits to 10%, rather than the standard 20%.

Although Roth 401(k) features became effective Jan. 1, 2006, few employers immediately implemented them, since they were new and recordkeepers were still developing systems to accommodate the new feature.

The unified managed account (UMA) market’s rapid growth will not continue without greater standardization and automation, says a Dover Financial Research report issued Wednesday and commissioned by Depository Trust & Clearing Corp. (DTCC).

Evergreen Investments of Boston, Wachovia Corp.'s asset management arm, announced Sept. 4 that it has closed its family of fund of funds.

By increasing the number of alternative products and strategies it offers, Mellon Capital Management Corp. has generated inflows in the past three years, despite difficult market conditions.

The number of affluent households in the United States has decreased, according to initial research from the annual Affluent Market Research Program by TNS, a marketing company based in New York.

Currency hedge funds reported an 0.11% loss in July, according to the Parker FX Index.

Pacific Investment Management Co. will add an actively managed bond exchange-traded fund to its current ETF lineup, and perhaps other types of active ETFs, The Wall Street Journal reports.

To help develop its financial system, China is going to support the launch of additional hedge funds, the South China Morning Post reports. However, Bejing is not going to give them a free hand; the government promises to police the funds and offer governing oversight.

What a difference a year makes. Just about this time last year, investors were clamoring to get into some of the best-performing hedge funds. But with some of the biggest names in the business down 7%, 25% in some cases, year to date, hedge fund managers fear that their investors are gearing up for massive withdrawals come the Sept. 30 deadline for year-end notices, The Wall Street Journal reports.

China's mutual fund sector posted record paper losses for the first half of the year, totaling $158 billion, or 1.08 trillion yuan, yet management fees more than doubled from a year ago, according to Shanghai Securities News.Equity mutual funds posted a combined unrealized loss of $155 billion, while money market funds showed a paper profit of $190 million.The huge drop comes at the end of a two-year bull run that raised share prices six-fold. The mutual fund sector grew nearly seven-fold to more than $439 billion, or 3 trillion yuan.

England's Financial Services Authority has found no evidence of a "concerted attempt by individuals" to alter share prices in Halifax Bank of Scotland (HBOS) during the raid of its shares earlier this year, according to the Mondaq Business Briefing.HBOS' shares fell by 17% in 20 minutes on March 19 after someone spread false rumors that the bank had asked the Bank of England for an emergency loan. The panic came just days after the collapse of Bear Stearns in the U.S.Many officials suspect that hedge funds may have played a large role both incidents, though regulators have not been able to pin the blame on anyone yet.After four months of investigating, the FSA found no evidence of abuse. The agency stated that it would continue to watch for rumor-mongering "at a high level of intensity," and will take action if any evidence is found.The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

The chairman of Credit Suisse Group's alternative investments business said that his unit plans an international expansion for the recently acquired Asset Management Finance Corp., using joint ventures to enter new regions and sectors.Chairman Brian Finn said that by early next year Credit Suisse needs to put some Asset Management Finance executives internationally in cities like London or Zurich and eventually in Asia, possibly in Singapore or Hong Kong.He discussed the plans in an interview last week, after the Zurich firm bought 80% of the New York investment manager from National Bank Financial of Canada for $384 million of stock.Finn said that he hopes to have some international customers for Asset Management Finance by late next year."We think that there is a big global opportunity," Finn said. "We have developed a lot of joint ventures in Latin America, China, and the Middle East, but as a general matter as we look at investment managers in the U.S., we think the next few deals will be in more-developed markets."

Total assets of money market mutual funds dropped by $625 million to $3.573 trillion for the week ending Aug. 27, according to the Investment Company Institute.Assets of retail money market funds fell $4.90 billion to $1.234 trillion, taxable money market fund assets fell $2.75 billion to $928.49 billion, and tax-exempt fund assets fell by $2.16 billion to $305.29 billion.Institutional money market fund assets increased by $4.28 billion to $2.339 trillion, taxable money market fund assets rose by $8.50 billion to $2.135 trillion, and tax-exempt fund assets fell $4.22 billion to $203.90 billion.

While hybrid mutual fund and annuity product solutions began gaining advisers’ and investors’ attention last year, such managed payout funds still have flaws. That’s according to a report from MarketWatch.

New York Attorney General Andrew Cuomo is reportedly looking into whether Fidelity Investments might have been motivated to sell Goldman Sachs' underwritten auction-rate securities due to a pre-existing business relationship.

Credit Suisse Group announced it was acquiring a majority interest in Asset Management Finance Corp. of New York from National Bank Financial of Canada.