Investment funds

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."

The Financial Industry Regulatory Authority (FINRA) has widened its ongoing auction rate securities (ARS) probe with a sweep letter aimed primarily at sellers, rather than lead managers, of the illiquid instruments.The six-page letter, sent last week to 40 broker-dealers, contains a laundry list of requests covering the period from June 1, 2007 through June 30, 2008. Firms must produce all documents, electronic or otherwise, indicating any arrangement with other parties, including ARS issuers and auction agents, to sell, remarket or solicit bids for the securities.“It appears that FINRA is interested in doing a thorough investigation, given the depth and breadth of the request,” said Brian Rubin, Washington, D.C.-based partner in law firm Sutherland Asbill & Brennan and former deputy chief counsel of enforcement at FINRA predecessor NASD.State regulators and the Securities and Exchange Commission have thus far pursued charges against firms -- including Citigroup, UBS Financial Services, Merrill Lynch & Co., Goldman Sachs Group and Deutsche Bank -- that have been lead underwriters as well as sellers of the securities.“Now, it appears that FINRA is looking at selling firms,” Rubin said.FINRA spokesperson Herb Perone would not comment on the letter except to say how many firms received it.Allegations against lead managers have focused on internal communications detailing problems with the auction rate securities market that were not disclosed when the products were sold.With the new sweep letter, according to Rubin, FINRA appears to be investigating whether the selling brokers obtained information from the lead managers that they failed to disclose to clients. The self-regulatory organization is also looking at basic sales practices including whether the securities were suitable investments, misrepresentations were made and advertising was fair and balanced.

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.

The Pension Protection Act is succeeding at encouraging employers to automatically enroll and annually increase contributions for workers, Vanguard has found in an analysis of the defined contribution plans it administers.

When it comes to retirement and finances, members of Generation X and Generation Y talk the talk but they don’t walk the walk.

The Securities and Exchange Commission has opened a 60-day public comment period to see whether the U.S. should adopt international reporting standards.

When 12b-1 fees were established in 1980 as a way to help mutual funds gain investors, the industry was far smaller than it is today.

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.

The European Commission’s legal certainty group (LGC) has issued a set of recommendations designed to help improve and harmonize post-trade securities processing across the European Union.

Baby Boomers and their financial advisers are going to increasingly look for one-stop-shop solutions that combine mutual funds, annuities and systematic or laddered drawn-down schedules, Investment News reports.

The unbridled growth of exchange-traded fund assets and products appears to have hit a speed bump, at least for now, The Wall Street Journal reports.

CLSA Capital Partners has created a new fund that invests in Asian water and waste management opportunities, Reuters reports.

Hedge funds may do a good job of shorting stocks and investing in futures, but when it comes to their own legacies, few have management succession plans or future growth strategies. This is according to a report from accounting and consulting firm Rothstein Kass, Reuters reports. In fact, 70% are ill prepared for the times ahead.

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.

The Securities and Exchange Commission suffered a setback last week in its efforts to prosecute individuals for insider trading after a judge dismissed the charges on a case from 2001.

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