Investment funds

In spite of their strong records, two Vanguard funds that have been suffering steep redemptions will now be reopened to investors—and industry observers say this is an indication of investors’ skittishness in this weak economy.

Whereas the S&P 500 declined 0.99%, the Dow Jones Industrial Average rose 0.25% and the Nasdaq Composite Index gained 1.42% in July, the Hennesee Hedge Fund Index fell 1.95%.

Vanguard is now permitting its largest international fund, the Vanguard Total International Stock Index Fund, to purchase foreign stock directly, rather than through other Vanguard index funds.

Given the turbulence in financial markets, now may seem an inopportune time for financial advisers to make drastic changes to the way they interact with investors.

MassMutual’s retirement services division is offering a customized 401(k) tool for plan sponsors and retirement plan advisers, based on asset allocation tools from Morningstar.

Hedge funds are enjoying tremendous success in Hong Kong and Singapore, with the number of managers and assets under management going through the roof, according to data from Hong Kong’s Securities and Futures Commission and Singapore’s Monetary Authority.

After years of waiting to be compensated for damages done to their investment holdings by market timers and late traders, Janus investors will finally receive $100 million worth of restitution.

Morningstar has added global real estate and currencies as two new categories it will track for mutual funds, and alternative investments as a new broad asset classes.

Investment firms will continue to hone their specialties and look to raise capital through mergers and acquisitions throughout the rest of the year, according to a report by Jefferies Putnam Lovell.

Fidelity Investments is returning to China’s stock markets, particularly consumer goods, healthcare and building companies, hoping to find values and that inflation has reached an apex, Reuters reports.

Some investors get jittery even in the best of times—and these are not the best of times. The fluctuations in the stock market have created quite the headache for advisers, not to mention the surfeit of investment information via the Internet and cable news.

Mutual funds that place bets against the market by shorting stocks are doing better than typical, long-only funds. Mutual funds that short stocks take on different levels of risk, using various derivatives, such as futures, to protect the bets taken against indexes.

Despite hedge funds that have received returns on investments in commodities and emerging-market stocks, the hedge fund industry, as a whole, is set to turn in their worst monthly performance since July 2002.

The United Services Automobile Association (USAA) has created five new target retirement funds to simplify investing for retirement and to provide investors greater value by offering lower costs that are 47% below the latest similar Lipper category expense ratio average.

The board of directors at The Vanguard Group Inc. has elected F. William McNabb III as its chief executive officer.

Rampart Promotes Two to Managing Director

The Securities and Exchange Commission’s Office of Compliance Inspections and Examination released a new ComplianceAlert recognizing common flaws and weaknesses among mutual fund companies. The SEC found deficiencies in soft-dollar practices, mutual fund proxies, personal trading by investment advisory employees, valuation and liquidity issues for high-yield municipal bond funds, broker/dealers’ valuation of collateral management processes and a variety of other issues.

The Senate doesn’t like either campaign, each of which ran in the Washington area. TIAA-CREF has since pulled its ads, but Fidelity, claiming all of its communications go through legal review, is still running them.

The Securities and Exchange Commission issued guidance last week for fund boards of directors in assessing their firm’s soft-dollar practices. The SEC said it was issuing the guidance a full two years after the limitations it put on soft dollars in 2006, restricting it only to research, due to rapidly evolving market and trading practices. True enough, there are wide discrepancies among brokerages today, due to rapidly evolving markets, trading practices and electronic crossing networks. Fund companies have until Oct. 1 to comment on the SEC’s guidance.

SEC, Department of Labor Join Forces on 401(k)s