Mutual funds

In response to scrutiny over its ratings of instruments tied to subprime mortgages, Fitch Ratings has increased its own scrutiny over fund of hedge fund managers, warning that many such funds may not be able to meet redemption requirements if their risks are not closely monitored.

When Wachovia Corp. completes the sale of its banking operation to Citigroup Inc., it plans to remain a public company with two main subsidiaries—Wachovia Securities, the nation's third-largest brokerage, and its proprietary investment arm, Evergreen Asset Management.

The Reserve will liquidate its Primary Fund and begin returning cash to shareholders, according to an announcement on Monday.

On Monday and Tuesday, immediately after the government announced the opening of its $50 billion insurance program for money market funds, at least eight major fund companies had signed up, including BlackRock, Dreyfus, Evergreen, Federated, Invesco AIM, Morgan Stanley, TCW and Legg Mason’s Western Asset Management.

Evergreen Investments announced Tuesday that its parent, Wachovia Corp., will purchase Lehman Brothers debt held in three of its money market mutual funds: the Evergreen Money Market Fund, Evergreen Institutional Money Market Fund and Evergreen Prime Cash Management Fund.

Canadian securities regulators have begun on-site reviews of money market funds, fearing their exposure to devalued securities.

Putnam's Investment Chief Cronin Stepping Down

TD Ameritrade Supports Primary Fund With $50M

The labor supply may experience shortages in coming years as more Baby Boomers retire, according to a study by KPMG. The firm found there is a lack of Generation Y workers to replace those who are expected to retire in the years ahead. That could lead to a lack of consumer spending and a contraction in the tax base.

Recent moves by the U.S. government to prop up ailing money market funds seems to be helping stem the recent massive run on the funds, another fund implosion like the Reserve's Primary Fund can't be ruled out; managers may be holding investments that turn out to be worthless.

In the face of the nation's financial crisis, our industry has shown tremendous cooperation and fortitude, and we have its top leaders and trade association to especially thank for the sound direction they have so rapidly given to investors and the federal government in recent days.

CHICAGO - It often takes an economic crisis before firms really start thinking about risk management.

NEW YORK - Fee-based independent advisers, so far, are winning the retirement income race, beating out mutual fund companies, brokerages and insurance firms in the quest to conquer the 77 million Baby Boomers' estimated $17 trillion in retirement savings and total $90 trillion net worth.

The Department of the Treasury opened its money market mutual fund guarantee program Monday and provided details on how the $50 billion program, designed to stem a run on the $3.4 trillion money market fund industry, will work.

Tax-exempt money market funds began recovering some of the nearly $30 billion of outflows they suffered in the past seven days, but market participants say there's still a feeling of queasiness among traders and investors in the midst of a disconnect between municipal and Treasury securities as the government bailout program unfolds.

The Securities and Exchange Commission has created a nearly $32 million fair fund distribution to help current and former customers of Ameriprise Financial Services who were harmed by the company’s failure to disclose revenue sharing payments.

The Royal Bank of Canada has pledged $35 million to help cover clients invested in a money market mutual fund that recently broke the buck, Reuters reports.

Responding to the Securities and Exchange Commission’s temporary ban on short selling in hopes of helping to stabilize the markets, Vanguard and Bank of America’s Columbia Funds have stopped lending securities to such traders, The Boston Globe reports.

One of the biggest arguments against the $700 billion bailout of Wall Street’s bad debt is that by having the government clean up investment houses’ balance sheets, the same firms that caused the problem might make outsized profits in helping the government assess the debt, the New York Times reports.

TD Ameritrade announced Wednesday that it will kick in an additional $50 million to support investors in Reserve Funds’ Primary Fund, whose net asset value fell to 97 cents.