Mutual funds

Standard & Poor’s has launched four securities lending indexes based on intermediary prices for stocks in its top three benchmark indexes, the S&P 500, S&P MidCap 400 and S&P SmallCap 600, as well as the sector sub-indexes for the three indexes.

Jefferies Asset Management has introduced what it believes is the first commodities exchange-traded fund tied to an equities rather than a futures index, and it is planning other equities-based commodities ETFs in the near future.

“Move past the crisis,” Barclays Wealth urges investors in its latest monthly strategy update. It would be wise to position for the economic recovery since most economists are revising their growth forecasts for 2010 upwards.

After acquiring more than $1 trillion in asset-backed paper from money market funds, the Federal Reserve is considering borrowing that money back from the funds through reverse repos to ease the stimulus plan and avoid inflation, and most funds think that is a good idea.

Bank of America has reached an agreement to sell the long-term asset management unit of Columbia Management to Ameriprise Financial for $1 billion. The bank is still considering what to do with its short-term asset management business.

Expecting strong third-quarter earnings reports from asset management firms due to the market’s rally, analysts are upgrading their outlook on the companies.

The Securities and Exchange Commission is concerned about the additional risk investment firms take on when they put cash collateral earned from securities lending into other uses, along with the lack of true transparency in the market. Thus, the SEC will conduct a “wholesale review” of the entire securities lending marketplace in a roundtable on Tuesday.

As the Federal Reserve begins to ease its extraordinary stimulus plan and works to stave off inflation, it is reportedly considering borrowing up to $500 billion from the $3.4 trillion money market fund industry rather than the 20 leading primary dealers, which aren’t expected to be able to provide more than $100 billion, the Financial Times reports.

Morningstar has acquired a minority equity stake in PitchBook Data, a provider of data on private equity transactions, investors, companies, limited partners and service providers.

Rather than simply generate reports for portfolio managers to use, fund analysts at leading companies including Fidelity, Putnam and MFS are getting more say in which stocks a fund selects in funds they are labeling “sector” or “research” funds, The Wall Street Journal reports.

Noting that 15% of 401(k) participants have engaged in some form of “leakage,” that is, hardship withdrawals from their plans or failure to roll the money over when changing jobs, between 1998 and 2006, the Government Accountability Office is recommending that Congress eliminate the ban on additional contributions for six months by those who make such withdrawals.

A provision by the Internal Revenue Service that permits people age 70-1/2 or older to contribute up to $100,000 of their IRA money to a charity each year without tax consequences is slated to expire at the end of the year.

The Hartford Merges Investment, Retirement Products Into One Division

SEC Creates New Risk Division

Wholesale changes are in store for both pension and 401(k) plans, according to a survey of 140 financial executives by Prudential Financial. Nearly half of the execs at companies with pension plans said their firms were considering freezing or terminating their pension plans in the next two years. Seventeen percent have already closed their DB plan to new entrants, and 27% said they are likely to do so in the next two years.

When the Roman Empire was first expanding, regulators noticed an annoying problem: Due to increasing traffic, chariots were leaving grooves in the stone roads, but the gauge - the distance between the wheels - varied according to region. Different sized chariots didn't fit in the grooves. Julius Caesar had a solution: international standardization.

Even before the global economic crisis, financial firms faced unprecedented pressure to find new ways to leverage technology to streamline operations, reduce risk and improve cash flow management. But today more than ever, firms are turning to technology to compete more effectively in the markets.

For the past year, investors have been nervously avoiding stocks and pumping billions of dollars into bonds and bond mutual funds, but a new study indicates that a large percentage of investors may have a limited understanding of how bonds work.

Fidelity Investments opened Fidelity Clearing Canada in Toronto Thursday, revealing plans to expand its base of broker/dealers. The business will provide clearing, custody and back-office services to both Canadian-based brokerage firms and the Canadian arms of brokerage firms based in the United States, that already clear through National Financial, Fidelity’s U.S.-based clearing branch.

During the second and third quarters, American households should recover as much as $6 trillion of the $14 trillion in wealth that they lost since the onset of the financial downturn last year, Barclays Capital analysts said. Even so, consumers probably won’t be ready to start spending freely again any time soon, Barclays said.