International funds

Hennessy Advisors has signed a definitive agreement to acquire the assets of two Japan funds with a combined $65 million in assets, the SPARX Japan Fund and the SPARX Japan Smaller Companies Fund.

Standard & Poor's, economy

Russell Investments has launched the Russell Frontier Markets Equity Fund, which will invest primarily in emerging markets at the forefront of development. However, the fund also has the license to invest some money in companies stationed in more developed nations but that have a significant proportion of operations in frontier markets.

As the Chinese middle class becomes increasingly familiar with investing, and the nation’s markets open up to international trading, its mutual fund industry is likely to experience incredible growth, Wall Street & Technology reports.

In a survey of hedge fund executives attending the Global Alternative Investment Management conference in Monaco this week, 65% said they feared that the economic crisis will drag on, Reuters reports.Another 18% said things could even get worse. Only 17% said they thought it was over.“Bailouts [of banks] have worked somewhat, but problems have been transferred to governments,” said Peter Rigg, an executive with HSBC Private Bank who is one of the pessimists surveyed.Fifty-nine percent said they think Europe is suffering the worst, while only 35.5% said conditions are the most precarious in the U.S.“The worst problems are in western economies that have relied on leverage to grow. Economic power is going East,” said Jaime Castan of RMF Investment Management.But not everyone thinks that Asia is insulated, including Marc Lasry of Avenue Capital, who commented: “There’s a huge fiction out there that Asia is going to be fine, but it needs a strong U.S. and Europe to grow.”Asked how the crisis could compromise hedge fund strategies, executives said they were most concerned about liquidity, the lack of alpha and risk management. That said, the investment style that most, 28%, are optimistic about are distressed/event driven, followed by global macro (24%), managed futures (17%) and general arbitrage (10%).

Thanks to shady money managers like Bernie Madoff who ruined it for everyone, the lucrative and surreptitious heydays of hedge funds may be gone for good.

ProFunds Group has launched four leveraged international exchange-traded funds that will track the Europe, Australasia and Far East region, emerging markets, China and Japan. The funds will aim to return twice the daily performance of indexes tracking those regions.

Baring Asset Management has launched an international small-cap fund for institutional investors that will seek long-term capital growth by investing in Europe, Japan and the Far East, with the Morgan Stanley Capital International Europe Australasia Far East Small Cap Index as its benchmark.

European Union Internal Market Commissioner Charlie McCreevy is expected to propose uniform new rules regarding depositories for undertakings in collective investments in transferable securities (UCITs), the European Commission’s version of mutual funds.

After shopping its back-office support division in India since last year, which is based in Bangalore and Chennai and employs 5,000, Fidelity has decided to scrap the sale, Reuters reports.

Seven out of 10 money managers surveyed believe the world economy will improve within the next 12 months, and already, they are putting their money back to work in the stock market, as they are bullish on corporate profits, according to the Merrill Lynch survey of fund managers for May.

Investors have begun to embrace developed markets, Reuters reports.

Bank of America is selling a 5.8% stake worth about $7 billion in China Construction Bank to help raise a $34 billion capital gap found by the stress test, the Charlotte Observer reports. This amounts to roughly one-third of its current 17% stake in the Chinese lender.

WisdomTree and Dreyfus have joined together to launch the WisdomTree Dreyfus Emerging Currency Fund, an exchange-traded fund listed on the NYSE Arca.

Investors are regaining their appetite for risk, particularly emerging markets funds, The Wall Street Journal reports.

NEW YORK - Most financial transactions are dependent upon trust, but the last two decades of deregulation have eroded that trust and created a global crisis of confidence, according to experts who met last week at a global forum in the heart of New York's financial district.

The only way the financial services industry will recover from the brutal market and financial crisis of the present is to concentrate wholeheartedly on rebuilding investor trust. That was the overriding theme of this year’s Fund Forum Asia, the Singapore Straits Times reports.“High-profile frauds such as the Madoff and Stanford cases have made investors very nervous,” said David Seymour global head of investment management for KPMG. “The investor community is rattled, and confidence will not return easily.”To counter this sentiment, Seymour said, “Rebuild trust and confidence through strong customer relationship management. Historically, the most successful investment management firms have been those which focus clearly on their customers.”And while the market outlook currently remains weak, Seymour is convinced that investment management will bounce back in a “tremendous” way. “Those investment funds which keep their nerve, concentrate on improving transparency and communication with customers, and get themselves in shape for the new financial world order stand to enjoy an exciting and profitable future indeed.”Investors are currently seeking regular income-generating, low-risk products,” said Lester Gray, CEO of the Asia-Pacific arm of Schroders.

Morningstar is acquiring the equity research and data business of Computerized Portfolio Management Services of Toronto for C$16.1 million. The companies expect to complete the sale in the second quarter.

The Depository Trust & Clearing Corp. is allowing non-U.S. financial firms to take advantage of the access, low costs and risk-management protection of its Mutual Fund Services, including Fund/SERV. It is the first time that DTCC has opened up these services to non-U.S. firms.

Crispin Odey, a U.K. hedge fund manager who made a spot-on call last year by shorting banks, believes that financials are now showing some real strength, which could signal pronounced improvement, The Wall Street Journal reports.