Mutual funds

The White House’s earlier plan to merge many of the regulators overseeing the financial services industry is likely to be scrapped, The Wall Street Journal reports.

Wells Fargo, parent of the Evergreen mutual funds, has agreed to pay $40 million to the Securities and Exchange Commission to settle charges it inflated the value of mortgage-backed securities held by one of its mutual funds, the Ultra Short Opportunities Fund.

As part of an increasing trend among mutual fund companies to diversify their offerings into new areas, Putnam Investments is planning to offer hedge funds in the next six to 12 months, according to the firm’s chief executive officer, Robert L. Reynolds.

Citing the positive effects of diversification and continued contributions, Vanguard announced that the median decline in the three million defined contribution accounts it administers fell 17% in the 15 months ended March 31, as opposed to the market’s overall 44% decline.

Fidelity Investments’ chief of technology and real estate operations, Marvin Adams, will be leaving the company, according to reports.

Finally, insiders launched candid criticism at the mutual fund industry last week, to help it respond sensibly to the economic meltdown and reposition itself to regain investor trust.

Abigail Johnson Chairs Fidelity Fund Board

Conn. Fails to Pass Hedge Fund Bill

Thanks to shady money managers like Bernie Madoff who ruined it for everyone, the lucrative and surreptitious heydays of hedge funds may be gone for good.

From recommending different products to rethinking their risk management strategy, some financial advisers say they have changed their approach in the wake of last year's market slump. Indeed, many retail investors remain on the sidelines of the stock market, with assets in equity funds only half of what they were in late 2007 before the economic crisis began and the market lost 56% of its value.

Finally, insiders launched candid criticism at the mutual fund industry last week, to help it respond sensibly to the economic meltdown and reposition itself to regain investor trust.

NEW YORK - Many financial advisers are feeling extremely guilty for failing to protect their customers from the 30% equity drop in 2008, but it will take more than remorse to earn clients' forgiveness.

The growing trend for companies to suspend or even eliminate 401(k) matches in this recession will inevitably translate into fewer people contributing to their retirement savings, writes Rockefeller Foundation Associate Vice President Janice M. Nittoli in an editorial in The Wall Street Journal titled, “Now Is No Time to Skimp on Retirement Plans.”

Money market fund assets fell by $25.22 billion to $3.764 trillion in the week ended June 3, the Investment Company Institute said.

Great-West Retirement Services has launched an updated set of target-date funds that it believes will address some of the problems that were found with target-date funds in 2008.

ProFunds Group has launched four leveraged international exchange-traded funds that will track the Europe, Australasia and Far East region, emerging markets, China and Japan. The funds will aim to return twice the daily performance of indexes tracking those regions.

The retirement centers of E*Trade, Fidelity and Ameritrade are the most complete of 14 leading brokerages, according to a new report from Corporate Insight.

Capital Group will cut 9% of its global workforce of 9,000, or 820 jobs, this month. This will be American Funds’ parent company’s second round of layoffs, in response to a 29% decline in assets from $1.2 trillion to $850 billion. The company eliminated 500 jobs in January.

Long-term mutual funds experienced net inflows for the 11th straight week, the Investment Company Institute said, reaping $7.85 billion for the week ended May 27.

After so many 2010 target-date funds came up short last year, Prudential Retirement investigated how they might be improved, and decided that including retirement income guarantees would be a key benefit. They would freeze the asset allocations of target-date funds five or 10 years prior to retirement, in exchange for guaranteed income.