Hedge funds

After AARP pared down its more than 33 funds at one point during its 21-year relationship with Scudder Investments to a mere five in 2005, sub-advised by State Street Global Advisors, the new chief of its funds unit now wants to expand those offerings, with a new focus on retirement income.

IndexIQ has launched a mutual fund-of-fund that will mimic hedging strategies, invest in exchange-traded funds and leverage up to 100% of its assets.

Treasury Secretary Henry M. Paulson, Jr. urged Congress to finish legislation that would create a regulator for government-sponsored enterprises, Fannie Mae and Freddie Mac, and financially shore up the two mortgage financing giants.

Volatile financial markets forced hedge fund net inflows to their lowest level last quarter since the fourth quarter of 2005. Inflows fell 78.7%, to $12.5 billion, in the second quarter from a year earlier, according to data released Friday by Hedge Fund Research.

Federal regulators are cracking down on the potential spread of false and misleading rumors that could potentially affect market conditions.

The deadline for entries to Money Management Executive’s Sixth Annual Fund Operations Awards has been extended through Thursday, July 31, so you still have plenty of time to enter.

Hedge funds topped mutual funds in equity trading volume last year and are now second only to asset management shops, according to a new study by Greenwich Associates.

If elected, Democratic presidential candidate Barack Obama plans to increase the capital gains tax between five and 10 percentage points, from its current rate of 15%. The effect of Obama’s possible candidacy, along with his tax program, has already sent concern throughout the financial world, the Newark Star-Ledger reports. Some financial planners are advising investors to take advantage of the current lower rates and to drop some mutual funds and stocks.

London-based hedge fund The Children’s Investment Fund Management LLP (TCI) posted its largest monthly loss ever – over $1 billion – for June 2008.

Erin Callan, who was recently ousted from her position as Lehman Brothers’ chief financial officer, will begin a new role as head of Credit Suisse’s global hedge fund business on Sept. 2.

The biggest mutual funds in the nation have lost more than an estimated $4 billion in the past week alone on their investments in Fannie Mae and Freddie Mac and related mortgage stocks, Reuters reports, based on analysts’ assessment of fund companies’ latest reports. In the past week, Fannie and Freddie declined 45.4% and 46.5%, respectively.

The small group of money mangers who possessed the ability to outperform the market has virtually disappeared, according to a new study.

Firms that focus on value stocks have been slammed recently, as financial stocks like Freddie Mac and Fannie Mae continue to struggle, reports The Wall Street Journal.

The credit crisis continues to hit the $2 trillion hedge fund industry hard (see related story, page one). More funds have left the industry, and fewer have entered, over the past six months than collectively last year.

The ongoing credit crisis saga has taken a tremendous toll on hedge funds due to their exposure to structured mortgage-backed assets-and for those heading or parsing trades overseas to avoid U.S. taxes: Beware.

The growing popularity of fee-based advice is prompting mutual fund companies and other investment platform providers to upgrade the capabilities they offer advisers at banks and elsewhere.

Ameriprise Financial finalized a $440 million deal to purchase J&W Seligman in the fourth quarter. The addition of Seligman will provide Ameriprise with addition outlets to sell its mutual funds and further improve its hedge fund business.

According to data firm Hedge Fund Research, the $2 trillion hedge fund industry has been hit hard by the credit crisis.More funds have left the industry, and fewer have entered, over the past six months than collectively last year.

Absolute Return magazine reports that only 35 new hedge funds have been launched in the first half of this year, down markedly from 72 funds in the first half of 2007. But this year, those new funds have raised $19.5 billion, up 39% in total assets under management at the outset from the $14 billion the new funds raised last year.

If it isn’t enough that federal regulators are looking into whether the managers of two failed Bear Stearns hedge funds, Ralph Cioffi and Matthew Tannin, misled investors into staying with the risky investments as they were tanking, they are now probing whether they inflated the funds’ returns and outlook to obtain loans from banks or prime custodians, BusinessWeek reports.