Mutual funds

Institutional investors are looking for better risk models for investments and overall management, Northern Trust found. Ninety percent of those surveyed rated risk as an “important” or “primary” consideration in their decision making.

Putnam Investments has launched a new advertising campaign with the tagline, “This is Putnam Today.”

When a 401(k) participant goes to the trouble of selecting investment choices, they don’t expect them to shift over to a default option, but that’s exactly what happens frequently when a sponsors switches recordkeepers or provider, The Wall Street Journal reports. Because the offering lineup is not the same as the old plan, the only logical thing to do is to place the money in a safe default.

Long-term mutual funds netted $8.34 billion in inflows in the week ended July 1, the Investment Company Institute said, marking the 16th straight week of inflows, which total $160 billion.

Lori Richards is stepping down as head of the office of compliance inspections and examinations at the Securities and Exchange Commission, a role she held since its creation in 1995. She joined the SEC in 1985. Upon her departure on Aug. 7, Associate Director and Chief Counsel John Walsh will take her place.

In a survey of 3,129 financial intermediaries on their opinions of leading mutual fund companies, the top three rated brands are American Funds, Barclays iShares and Ivy Funds, kasina and Horsesmouth found.

It could take as long as five years for asset managers around the world to recoup the $10 trillion they lost in 2008, according to a report by Cerulli, which calls the global meltdown “of near-biblical proportions.”

With faith restored in the global asset management industry, due to a four-month stock market rally and more voices saying the economy is on the mend, mergers and acquisitions in the industry will see a brisk pace in the second half of the year, Jefferies Putnam Lovell says.

Active traders are largely optimistic about the market and the economy, Charles Schwab found in a survey of 260 investors. Eighty-one percent said they are either bullish or neutral on the market over the next six months, virtually unchanged since the last survey in February.

Investors will continue to be afraid of losing hard-earned money and gravitate to fixed-income and other safe investments, The Boston Consulting Group predicts. As a result, investment management firms need to offer new portfolios and, with fees on these offerings undoubtedly lower than aggressive, actively managed funds, they will have to cut costs even further.

U.S. and foreign equity mutual funds hit 10-year records in the second quarter, with domestic equity funds rising 17.05% and international equity funds rising 26.66%, according to Lipper. For both, it’s the best performance since the fourth quarter of 1999, when U.S. equity funds surged 19.47% and world equity funds delivered 27.42%.

Fidelity Canada is standardizing its mutual fund administration fees, so that its fees will be more even, predictable and transparent. The fixed administration fee will be 24 basis points for balanced funds, 29 basis points for North American equity funds, 33 basis points for global equity funds and 11 basis points for fixed income funds.

One of President Obama’s proposed financial reforms would require employers that do not offer a 401(k) to automatically enroll their employees into an IRA. If implemented, it would give the biggest boost to the retirement savings industry since the creation of the 401(k) in 1980, enrolling 40 million new investors, and attract more than $100 billion within five years, The Wall Street Journal reports.

U.S. financial institutions have a lot of work to do to win back the trust of the American investor, with about half saying they don’t trust banks to put customers’ best interests ahead of corporate goals, a survey by Harris Interactive for Cake Financial found.

In response to investors’ interest in taking a comprehensive approach to their finances, financial advisers are moving even more broadly away from commissions to fees, and this is boosting their earnings by roughly 10%, the College for Financial Planning Annual Survey found in a survey of 390 advisers. Cerulli Associates assisted in the polling.

Despite the repercussions from the blowup of the Reserve Fund’s Primary Fund, money market funds still have not properly addressed liquidity and credit quality issues, the ratings agencies believe, and as a result they might strengthen their standards, The Wall Street Journal reports.

In a roundtable with The Wall Street Journal four of the most preeminent asset managers discussed their outlook for the economy, and while they expect rough times to continue for some time to come, they do see pockets of opportunity.

Propelled by yields that have been at 18-year highs for the past nine months, high-yield bond funds rose 23% in the first half of the year.

Just as the financial crisis is unprecedented, the recovery is also expected to chart new grounds, the St. Louis Post-Dispatch reports.

Morningstar has added 10 new categories for its mutual fund classification system, six of them for commodities and four for sectors.The new commodity categories are: agriculture, broad basket, energy, industrial materials, precious metals and miscellaneous. The new sector categories are: consumer discretionary, consumer staples, equity energy and industrials.In addition, Morningstar has added commodities as a broad asset subclass to its six asset classes: U.S. stock, international stock, taxable bond, municipal bond, balanced and alternatives. Funds that correspond to this subclass will be benchmarked against the Morningstar Long-Only Commodity Index.“The growing number of commodity funds and their increased usage prompted us to add these new categories and the broad asset class, so investors can more properly evaluate and compare funds that invest in commodities,” said John Rekenthaler, vice president of research at Morningstar.