Mutual funds

Testifying before the Senate Banking Committee on Thursday, Securities and Exchange Commission Chairman Mary Schapiro vowed to impose stricter regulations on a broad array of securities and practices, including money market funds, whose holdings would adhere to stricter credit quality, maturity and liquidity standards.

Stable-value funds, available in such tax-deferred accounts as 401(k)s, have been attracting a lot of attention lately, having returned 4.7% in 2008, compared to the Dow’s 33.8% decline, The Wall Street Journal reports.

Healthcare costs for a 65-year-old couple retiring in 2009 would total $240,000 over the remainder of their lifetimes, up 6.7% from the $225,000 needed in 2008 and a whopping 50% from $160,000 in 2002, according to estimates by Fidelity Investments.

Sixty-seven percent of asset managers surveyed by Russell Investments said corporate bonds look attractive, 61% are bullish on junk bonds, and 57% are optimistic about equities. This is the first time in five years that money managers have had a more favorable outlook on fixed income than on stocks.

A last-minute Bush administration regulation that would permit advice in 401(k) plans was called into question Tuesday by a number of consumer advocates and other experts who testified before the House Committee on Education and the Workforce.

Legg Mason has laid off 120 employees, 20 of whom worked in mutual fund administration and 100 of whom worked in its Western Asset Management subsidiary.

Fund giants headquartered in Boston, still one of the biggest capitals for mutual fund companies in the nation, have taken a particularly hard hit, Boston Business Journal reports, losing an estimated $500 billion over the past year.

Target-date funds continue to take the heat for buckling under the pressures of the market’s decline.

Janus paid its chief executive officer $7 million, including bonus, in 2008, a 27.8% pay cut, a Securities and Exchange Commission proxy filing indicates.

Hennessy Advisors has acquired the Tamarack Large Cap Growth Fund and the Tamarack Value Fund, which hold $158 million in assets between them. Voyageur Asset Management, a division of RBC Asset Management, was the investment advisor before.

PIMCO and BlackRock are two of the first mutual fund companies to sign up for the Treasury Department’s new program to purchase troubled assets—PIMCO as both a buyer and manager of debt and BlackRock only as a manager. Other fixed-income fund shops are likely to sign up as well, Geoff Bobroff of Bobroff Consulting told Dow Jones.

Because the credit markets and asset values are at the very heart of the economic crisis, these areas will have to strengthen before the economy improves, according to Fidelity Investments, Bloomberg reports. As such, financial services will have to be the first area to improve, and it will lead the way out of the recession.

FINRA has fined 25 broker/dealers for failure to complete self-assessments related to providing mutual fund breakpoints between 2001 and 2002.

Industry watchers are stunned that Vanguard, a champion of low fees, has caved in to the realities of lower assets by raising fees on 31 of its 110 funds, albeit a scant average of 0.05%. But the truth is, poor market performance has ravaged assets at many fund shops, and grappling with lower assets, they are looking for ways to control costs, MarketWatch reports.

PALM DESERT, Calif. - Andrew Donohue, director of the Securities and Exchange Commission's Division of Investment Management, said Monday that he doesn't think the SEC will push for changes to rule 12b-1 govering mutual fund fees this year.

Fidelity Investments has hired Christopher Sullivan to serve as head of its bond group, in charge of $170 billion of assets under management.

Even as it continues to lay off 3,000, Fidelity Investments is looking for talented analysts and investment professionals as it seeks to restructure and strengthen its capabilities in the midst of the economic downturn, The Boston Globe reports.

With mutual fund investors burned by negative returns of 30% to 50% over the past year, they are unlikely to remain confident about their investments, Celent predicts. As a result, the universe of 7,000 funds could shrink by as much as 70% over the next five years, leaving only 2,000 funds in existence.

74% of Employers Still Honoring 401(k) Match

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