Fund performance

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.

Investors increased their allocation to global emerging markets hedge funds by more than 60% from the first to the second quarter, according to new data. Hedge Fund Research Inc. said that investors allocated approximately $995 million to such alternative investment funds.

Citigroup plans to revamp its capital markets business under its investment-banking arm.

The chairman of South Korea's Financial Services Commission, Jun Kwang-woo, spoke out Monday about last week's reports that state-controlled Korea Development Bank was possibly interested in buying Lehman Brothers.

Don’t throw the baby out with the bath water.That, essentially, is the message from Vanguard Chairman John Brennan to the Securities and Exchange Commission, in response to the SEC’s plan to change a rule governing money market funds - making Vanguard the first major mutual fund company to protest the proposed change.In response to the subprime crisis, and the apparent failure of ratings agencies to properly grade the securities, the SEC is proposing shifting the responsibility for assessing short-term debt from Moody’s, Standard & Poor’s and Fitch, to squarely on the shoulders of asset management firms.That would be a mistake, Brennan argues, that could harm investors in the $3.5 trillion money market mutual fund industry.“It is our view that the proposed elimination of ratings would remove an important investor protection from Rule 2-a7, weaken investment standards and, potentially, pose a risk to the long history of stability of the $3.5 trillion money market fund industry,” Brennan wrote in a letter to the SEC.“Ratings, even if occasionally imperfect, protect investors by establishing a uniform, minimum credit quality for all money market funds. Removing that investor protection is akin to outlawing seat belts.”

Mutual fund managers in China are waiting for the economic outlook to improve before they launch new funds, according to China Knowledge Press.Industry insiders say that as of Aug. 18, managers of 16 funds that have already received approval from the China Securities Regulatory Commission, including nine stock funds and seven bond funds, are waiting to launch until the Chinese stock market and investor attitudes improve.According to official statistics, there were 88,000 new accounts for fund investment in July, down 19% from the prior month. There were 5 million new accounts added in August 2007.

Total assets in money market mutual funds fell by $1.45 billion to $3.573 trillion for the week ending Aug. 20, according to the Investment Company Institute. Assets of retail money market mutual funds fell by $1.35 billion to $1.239 trillion.Taxable money market fund assets in the retail category fell $2.85 billion to $931.24 billion, while tax-exempt fund assets rose $1.49 billion to $307.45 billion.Institutional money market fund assets fell $98 million to $2.334 trillion, while taxable money market fund assets rose $2.02 billion to $2.126 trillion and tax-exempt fund assets fell $2.12 billion to $208.12 billion.The seven-day average yield rose from 1.84% to 1.87% for the week ending Aug. 19, and the 30-day average yield rose from 1.85% to 1.86% during the same period, according to iMoneyNet Inc.'s Money Fund Report.The seven-day compounded yield increased from 1.86% to 1.89%, and the 30-day compounded yield rose from 1.87% to 1.88%. The average maturity of money fund portfolios was at 46 days, up from 45 days.

U.S. junk bond mutual funds saw $8.63 million in net outflows for the week ending Aug. 20, a steep drop from $53.47 million in inflows the previous week, according to AMG Data Services.The struggling economy and rising defaults have caused junk bonds to post a 2.73% loss year-to-date, the second-worst performance among fixed-income assets after asset-backed bonds, which are down 9.35% for the year.Junk bonds carry high yields to compensate for their risks and are rated below investment grade.

West Virginia and Nebraska offer the best 529 college savings plans, according to a ranking by SavingforCollege.com, a unit of Bankrate Inc., set to be released Friday.

Investors are interested in going green with their portfolio, but advisers are failing to even suggest investing in it, according to a Roper Center poll.

The Securities and Exchange Commission has unveiled its latest plan to make financial information far more accessible and easy to use.