Mutual funds

Investors Held Steady During Turbulence

Advisers are showing signs of optimism after months of market doldrums, according to a new survey by broker/dealer Securities America of 180 of its top producers.

The investment community is hopeful that with a little tweaking, target-date funds could be the ideal solution for getting apathetic investors into an age-appropriate asset allocation.

With pension plans headed for virtual extinction, the 401(k) will inevitably become the sole qualified retirement savings vehicle in the nation, and as such, the defined contribution model must be vastly improved, speakers at the Investment Company Institute's General Membership Meeting in Washington said.

Those hoping for a return to the good old days of self-regulated, self-correcting markets need to face reality: Those days are over.

Half of the parents that OppenheimerFunds recently surveyed don’t believe that college is as affordable as it once was, and 43% have saved less than $5,000 for their children’s college education, and another 13% have saved nothing at all. Only 20% have save $20,000 or more.

The Securities and Exchange Commission has begun sending investors checks from the $267 million fair funds distribution fund that came out of a 2006 settlement with Bear Stearns over late trading and market timing in mutual funds.

Investors’ general inertia has caused most of them to stick with their 401(k)s. On the one hand, it’s a good thing they aren’t trading in and out of their retirement funds, but their lack of interest is hurting them, Dow Jones reports.

Putnam Investments has launched the Putnam Capital Spectrum Fund and the Putnam Equity Spectrum Fund, two funds that will invest in a full spectrum of underpriced securities of leveraged companies, including stocks, bonds, bank loans and convertible securities.

A line has been drawn in the sand, and anyone with an interest in banking stocks will have to pick a side.

Total assets of money market mutual funds rose by $2.33 billion to $3.79 trillion for the week ending May 13, according to the Investment Company Institute.

As the financial crisis continues, employers are beginning to take action with regards to their pension or 401(k) plans, according to the International Foundation of Employee Benefit Plans.

Investors have begun to embrace developed markets, Reuters reports.

Following the ponzi scheme of Bernard Madoff, the Securities and Exchange Commission is considering tougher investment advisor rules. One measure the SEC approved Thursday, by a 5-0 vote, is surprise exams, to ensure that investors’ money is intact at a broker/dealer, custodian or bank. The plan is open for public comment.“We are taking this action in response to major investment scams, such as Madoff and many other potential Ponzi schemes,” said SEC Chairman Mary Schapiro. “A surprise exam would provide another set of eyes on clients’ assets and provide additional protection against theft or misuse.”For those advisors, like Madoff, who hold custody of clients’ assets directly, the SEC would require a written review by a certified public accountant.

Long-term mutual funds netted $13.51 billion in the week ended May 6, according to the Investment Company Institute, marking the eighth straight week that the funds have taken in money, for a total of $78 billion.Stock funds took in $8.17 billion, up markedly from $465 billion in the previous week, prompting some traders to believe the end of the bear market might be near.U.S. equity funds took in $9.85 billion, while international equity funds lost $1.68 billion.Bond funds netted $3.83 billion, down from the $5.61 billion they took in for the week ended April 29.Separately, money market funds lost $2.17 billion in the week ended May 6, following four straight weeks of outflows.

Advisers are showing signs of optimism after months of market doldrums, according to a new survey by broker/dealer Securities America of 180 of its top producers.

Few investors changed their saving or investing habits in 2008, Hewitt Associates reports, citing data from 2.7 million participants. However, equity fund allocations reached record lows.

The overwhelming majority of investors continued to fund their 401(k)s in the first quarter, Fidelity reports, citing an analysis of the 11.3 million participants it serves through 17,500 defined contribution plans.

Bank of America is selling a 5.8% stake worth about $7 billion in China Construction Bank to help raise a $34 billion capital gap found by the stress test, the Charlotte Observer reports. This amounts to roughly one-third of its current 17% stake in the Chinese lender.

The Securities and Exchange Commission and the Department of Labor will hold a joint hearing on June 18 at DOL headquarters examining target-date funds.