Investment funds

Financial advisers were able to save their millionaire clients big money last year, helping to fortify the need and demand for good advice among the wealthy, Fidelity Investments found.

John Hancock Funds has developed a tool that allows financial advisers to create detailed analyses of their clients’ portfolios and prepare high-quality, customized reports.

The economy will not bound back with élan but at least will provide a “normal recovery,” Vanguard founder John Bogle tells Bloomberg.

Sales of long-term mutual funds, i.e. equity and bond funds, rose by $11.14 billion in the week ended June 17, and for the week ended June 24, money market funds reaped $34.22 billion, the Investment Company Institute announced Thursday.

After years of the court system siding with the mutual fund industry on the discrepancy between retail and institutional mutual fund fees, the case that the Supreme Court will hear this fall, Jerry N. Jones et al. v. Harris Associates, might be a watershed one for investors.

ProFunds Group Thursday launched the first exchange-traded funds to offer three times the leverage of their benchmark index. The ProShares UltraPro S&P 500 seeks 300% of the performance of the S&P 500 in a single day, and the ProShares UltraPro Short S&P 500 seeks 300% of the inverse performance of the S&P 500.“The S&P 500 has the largest following in the ETF industry, with nearly $90 billion of assets benchmarked to it,” said Michael L. Sapir, chairman and CEO of ProFunds. “As a leader in short and leveraged ETFs, we are committed to giving investors more choices to manage risk and pursue returns.”

The Federal Reserve Thursday extended a number of emergency funding facilities from the end of October until Feb. 1, including an asset-backed facility for money funds, the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility.Other extended programs are the Commercial Paper Funding Facility, the Primary Dealer Credit Facility and the Term Securities Lending Facility. Along with this, the Fed is extending swap lines with other central banks through Feb. 1, citing the continued strain on many capital markets. "Conditions in financial markets have improved in recent months, but market functioning in many areas remains impaired and seems likely to be strained for some time," the Fed said in a statement.

Citing proficiency in conducting client meetings and responsiveness, respectively, BlackRock and Mainstay wholesalers are the highest rated in the industry, according to a report from kasina and Horsesmouth.The firms with the highest Wholesaler Satisfaction Scores in the survey are:

More than 25% of high-net-worth individuals either withdrew assets or closed their accounts with their wealth managers in 2008, according to the World Wealth Report, a survey of the 15 largest firms issued by Merrill Lynch Global Wealth Management and Capgemini. Instead, 30% of wealthy investors said they are likely to move their money to local and regional banks.The 15 asset managers surveyed lost an average of nearly 25% of their assets in 2008 after a 17% growth in 2007.“The good news is that it’s still a profitable business—just less profitable than before,” commented Bertrand Lavayssierre, managing director of global financial services at Capgemini.Wealthy clients moved 50% of their assets into cash or cash-equivalent assets, up from 44% in 2007 and 35% in 2006.

Hedge funds must reshape themselves to regain investors’ trust and continue to grow, speakers at the Managed Funds Association Forum this week said.

Due to a greater ease of getting in and out of markets, smaller hedge funds are handily outperforming large counterparts, according to Eurekahedge.Hedge funds with $100 million of assets under management or less are up 9.7% year-to-date through the end of May, compared with average returns of 5.2% for hedge funds with $500 million or more under management. Those with between $100 million and $500 million are up 9.4%.Bill Maldonado, head of Halbis, a division of HSBC Global Asset Management, told The Wall Street Journal that markets have been moving very swiftly this year, making it difficult for large funds to switch course. “There was an inference that they would be able to turn exposure around very quickly and go short, but, in fact, that didn’t happen,” he said.According to PerTrac Financial Solutions, smaller hedge funds have been beating larger hedge funds since 1996. The firm’s database of performance between 1996 and 2008 shows funds with less than $100 million delivering 13% a year, compared with 10% for funds with $500 million or more.

The number of millionaires in the world plunged 14.9% last year as the markets faced extreme losses and volatility, according to the Merrill Lynch/Capgemini 2009 World Wealth Report. This means there are fewer millionaires in the world today than in 2005. The number of ultra-high-net-worth individuals (those worth net assets of at least $30 million, not including their primary residence) also dropped 24.6%.

In today’s unpredictable market, even the “safest” investments such as stable-value funds carry considerable risks that plan sponsors and participants might not be aware of, cautions Watson Wyatt. Thus, the consultant urges plan sponsors and investors to review their holdings.

The Securities and Exchange Commission met Wednesday to discuss various changes to money market funds to safeguard them from another “run on the bank” like what happened last September with the Primary Fund.

As the asset management industry will inevitably face more regulations, costs will increase and competition will intensify, giving the largest companies an advantage that will increase their market share. Those were some of the views of 225 asset managers from 30 countries that Create Research surveyed. The study was commissioned by Citi’s global transaction services group and Principal Global Investors.

The board of trustees for the Fidelity Charitable Gift Fund has voted to lower the minimum asset requirement for its Charitable Investment Advisor Program (CIAP) to $250,000 from $1 million.

With births declining and medical advances extending life spans, the population of people age 65 and older in the U.S. will rise from 13% today to 20% by 2030 and 26% by 2050, the Census Bureau announced Tuesday.

Van Eck Global has launched the Van Eck Multi-Manager Alternatives Fund, a mutual fund designed to give investors exposure to a variety of investment strategies, including absolute-return and hedge style strategies.

The Financial Industry Regulatory Authority is asking brokers and registered investment advisers to provide it with information on the sale of leveraged and inverse exchange-traded funds between Oct. 1, 2008 and March 30 to investors who held them for 10 business days or longer. The authority is looking for all sales and marketing materials, customer communications and complaints, arbitration claims and written supervisory procedures regarding the sale of such funds.

Sustainable Asset Management has launched the SAM Sustainable Global Active Fund, an all-cap international equity fund that relies on SAM’s research methodology that takes economic, social and environmental factors into consideration.