Mutual funds

With more millionaires loading up on cash and fixed income, financial advisers are revisiting their fee structure, Investment News reports.

WisdomTree and Dreyfus have joined together to launch the WisdomTree Dreyfus Emerging Currency Fund, an exchange-traded fund listed on the NYSE Arca.

For the first time, the majority, 55%, of Fortune 100 companies now offer new salaried employees only a defined contribution plan, according to Watson Wyatt. This is up from 46% at the end of 2007.

An article in The Dallas Morning News warns investors against the wide discrepancies in the glide paths, or asset allocations, of target-date funds. As a result of too much risk, it says, some target-date funds are “missing the bull’s-eye.”

Education and longevity solutions are two of the biggest opportunities available to 401(k) providers, according to a study by String Financial.

WASHINGTON--Across the board, executives from leading mutual fund companies reported during the Investment Company Institute's General Membership Meeting that investors have held steady during market turbulence, with only 1% to 3% redeeming equity fund shares in the face of huge market drops.

UMB Fund Services, a subsidiary of UMB Financial Co., the listed, Missouri-based multi-bank holding company, added to its holdings JD Clark & Co., an alternative investment firm, in an all-cash deal.

At its annual meeting before registered investment advisers and brokers, Fidelity admitted it fell short of its own expectations in working with them during this turbulent time, Investment News reports. Yet, executives vowed that they will increase contact, and, in turn, asked advisers to increase their contact with investors, to restore their confidence in the markets.

Turning 401(k) Investors Into Educated Consumers

Financial Planners Rethink Monte Carlo Simulation Tools

SEC May Propose New Money Fund Rules in June, Chairman Says

Flinn Becomes Director of Client Service at MFC

New Internal Revenue Service accounting rules aim to reconfigure the way investors report gains and losses when they sell stocks and mutual funds by putting the burden on those who handle the transactions.

For years, Americans enjoyed the "wealth effect," the sense that their assets were gaining value rapidly enough that they didn't have to save much. This perception of ever-expanding prosperity gave them freedom to spend lavishly and enjoy life. The effect was a function of feeling wealthy as well as being wealthy.

WASHINGTON - Mutual funds remain a sound investment choice, and will, once again, grow through the perseverance of American ingenuity. Investment firms must stress this to investors to restore their faith.

Fidelity Investments, Bank of America and Goldman Sachs manage wealth for the largest percentage of U.S. millionaires, according to a survey by Fidelity.

Investors are regaining their appetite for risk, particularly emerging markets funds, The Wall Street Journal reports.

WASHINGTON—Rather than looking toward a recovery, Richard Davis, chairman, president and CEO of U.S. Bancorp, is “looking for a new direction.”

WASHINGTON—At a separate summit on 401(k) reform during last weeks General Membership Meeting of the Investment Company Institute, Putnam Investments CEO Robert L. Reynolds called for sweeping retirement reform, beginning with mandatory automatic enrollment in qualified default options, savings escalation, the inclusion of retirement income options and full advice on asset allocation and retirement planning.

Asking investors to properly maneuver their 401(k) plans in a market like this is akin to an airline pilot stepping aside and telling passengers to take the controls mid-flight. Workers never asked for so much responsibility in controlling their own retirement future, and most have no idea what to do now that the plane is losing altitude. In fact, most investors seem to be in shock and are doing nothing at all. A persistent problem with the mutual fund industry is the lack of education among its customers about how to manage their own retirement savings. Ignorance was bliss when equities were historically delivering 10% average returns, but the tide has turned. The first wave of Baby Boomers realized they did not have enough savings and decided to bet on risky equities to make up for the shortfall. That gamble backfired when equities in nearly every asset class plummeted last year. Now vastly underfunded as they approach retirement, most Boomers are skeptical they will ever get it back. Financial information is very confusing to the uninitiated. The vocabulary is difficult, the products are complicated, and the professional advice isn't always right. If the fund industry can encourage its customers to become more financially savvy, without stepping on any conflict-of-interest tripwires, its investors will be able to shop for the best products at the lowest cost and keep more assets under management. Younger workers-particularly those in my generation-are getting an early and valuable lesson about market volatility. Buy-and-hold investing is obsolete in an era where one bad year can wipe out 20 years of gains. Younger workers still have plenty of time to more than make up for losses, but will be wary going forward of future bear markets. These investors are plugged in to a myriad of information available instantly at their fingertips. As technology continues to advance, this will lead free-thinking investors who will be able to take responsibility for learning how to navigate their savings. Funds would be wise to become the source and the inspiration for that learning. (c) 2009 Money Management Executive and SourceMedia, Inc. All Rights Reserved. http://www.mmexecutive.com http://www.sourcemedia.com/