Investments

Large asset management mergers and acquisitions deals will likely occur this year, according to a report from Jefferies Putnam Lovell, as firms take advantage of distressed sales and divestitures.

The Federal Reserve has allowed more companies to take part in its program to add more liquidity to money market mutual funds.

Total assets of money market mutual funds increased by $54.67 billion to reach $3.895 trillion for the week ending January 7, according to the Investment Company Institute.

Assets held by American millionaires have declined 30% during the economic crisis, according to a November survey by Spectrem Group.

Fidelity Investments Canada has unveiled nine Fidelity Private Investment Pools aimed at the high-net-worth market. The offerings cover a wide array of asset classes and are said to be institutional-grade.

Hedge funds lost an average of 18.4% in 2008, according to early projections by the Hennessee Group. However, given that the Standard & Poor’s 500 Index declined 37% in 2008, hedge funds “significantly outperformed equity benchmarks on a relative basis,” said Hennessee Managing Principal Lee Hennessee.

The Investment Company Institute, along with the UK's Investment Management Association and Australia's Investment and Financial Services Association, has released a combined statement in support of prudent regulatory oversight of short selling.

After a surprisingly bad year, international funds—which sank an average of 45% in 2008—could be ripe for big gains later this year, some managers say.

Managers of funds at Royce, Artisan and First Pacific Advisors took the three highest honors in Morningstar’s annual Fund Manager of the Year Award, for domestic stock, international stock and fixed income, respectively.

T. Rowe Price has launched the Strategic Income Fund, a new offering that will invest in 12 asset classes to achieve high income and some asset growth, with 80% or more of its assets invested in income-producing securities.

Rather than bemoan the market’s abysmal performance, investors’ skepticism and the fact that their own revenues declined an average of 40% in 2008, financial advisers overwhelmingly are viewing the economic crisis as a time to strengthen client relationships, SEI found. And most believe they will be able to expand their client base, with 51% expecting the market to rebound as early as the second quarter.

Standard Chartered’s Hong Kong division has agreed to reimburse $320,000 to 1,000 investors who were allegedly disadvantaged by the firm’s permitting Stone Castle, a Millennium Partners subsidiary, to market time 24 mutual funds managed by ACM Funds and Scudder Global Opportunities Funds.

The average U.S. stock fund declined 37.9% in 2008, slightly worse than the Dow Jones Industrial Average’s 33.8% loss. It was the Dow’s worst year since 1931, when it declined by more than 50%. Meanwhile, the Standard & Poor’s 500 Index fell 37%, its worst performance since 1937.

Fidelity Investments has named former Evergreen Investments Chief Executive Officer Peter Cieszko to become the president of Fidelity Investments Institutional Services Company.

In recent years, smart investors have diversified their portfolios into alternative investments such as real estate and commodities, to buoy their holdings in times of market stress. But 2008 proved to be an anomaly, with those asset classes falling right down along with stocks. The average real estate and commodity mutual fund fell 40% to 50% last year, The Wall Street Journal reports.

More than 40 inverse exchange-traded funds run by Rydex Investments and ProFunds are passing on sizable capital gains to investors. For those who hold those funds in taxable accounts, the taxes they will owe will range from 50% to even as high as 80% of assets, The Wall Street Journal reports.

Paul Mazzilli, formerly executive director and head of the exchange-traded fund research team at Morgan Stanley, has joined IndexIQ as senior advisor, in charge of developing products for high-net-worth investors.

Sponsors of 401(k) plans worry that investors will either invest too heavily in risky equities, or too conservatively in money market funds, but in 2007, at least, target-date funds allocated investors’ money wisely across the board, Vanguard found.

Renaissance Institutional Futures, a $3 billion hedge fund run by James Simons, is foregoing management fees for 2009 as a response to poor performance in 2008.

Long-term U.S. government funds yielded 22.5% in the fourth quarter of 2008, for a three-month performance of 27.1% year to date, according to data from Morningstar Inc., as investors flocked to safety.