Mutual funds

Expect a pop in equity valuations, increased liquidity and lower trading costs as U.S. and foreign corporations list stocks using International Financial Reporting Standards (IFRS). That's according to a working paper published by the University Of Chicago Graduate School Of Business.

CHICAGO - In the coming weeks and months, financial officials and members of Congress will be scrambling to revisit a spate of sunsetting tax and accounting laws before the new presidential administration and Congress take over next year.

Fifty-five brokers with a combined $7 billion in assets under management that have left wirehouses to form their own independent registered investment advisory firm have selected Fidelity as their custodian in the first six months of this year. This is double the new assets Fidelity attracted from breakaway clients in 2007.

The turmoil in the financial industry and markets in recent days has caused serious anxiety among retirees or near-retirees, as they have seen their savings plummet in recent days, The Wall Street Journal reports.

Global insurance giant AIG sold more than $10.8 billion worth of annuities in the second quarter of 2008—more than any other insurer—and Lehman Brothers’ Neuberger Berman mutual funds managed more than $250 billion.

Bowing into pressure from banks and thrifts, the Department of the Treasury clarified its promise to guarantee money market mutual funds late Sunday. The government will insure money market mutual funds’ $1 net asset value for a year for investments in funds as of close of business last Friday.

Given the tremendous market turbulence of the past week, AMG Data Services data through Wednesday shows mutual fund investors holding steady.

The phone lines were jammed at financial advisers’ offices throughout the week as average investors called to find out just what the heck was happening on Wall Street.

The U.S. Treasury Department announced early Friday it has set aside $50 billion from The Exchange Stabilization Fund to insure that no fund in the $3.4 trillion money market fund industry “breaks the buck” for the next year.

Putnam Investments announced Thursday that it was liquidating the institutional Putnam Prime Money Market Fund and distributing the fund’s $15 billion in assets due to marketwide liquidity issues and high redemptions on Wednesday, rather than to exposure to uncreditworthy investments in AIG, Lehman Brothers or Washington Mutual.

Shareholders filed a lawsuit in U.S. District Court in Manhattan Thursday against Reserve Funds’ Primary Fund for halting redemption of holdings of $10,000 or more on Tuesday due to the fund falling to 97 cents on the dollar.

Charging that Lord Abbett misleadingly marketed Class A shares on 21 of its funds as offering superior performance than lower-cost Class B and Class C shares, which actually delivered identical performance, investors sued the company Thursday. The investors took issue with paying a 5.75% sales charge on the Class A shares.

Jeffrey Gundlach, chief investment officer of TCW Group, ticked off a host of cataclysmic forecasts for the financial services industry in a client conference call Wednesday that he titled “No Market for Old Men,” MarketWatch reports.

Dreyfus is planning to offer the Dreyfus Sustainability Fund, a capital growth fund that will invest in environmentally friendly companies that are committed to “sustainable operating practices, products and services,” a Securities and Exchange Commission filing shows.

Consumers enrolled in health savings accounts span all income groups, ages and careers, a UnitedHealthcare report found. However, enrollment is highest among those earning less than $25,000, clocking in at 64%.

The Reserve announced Tuesday that its Primary Fund broke the buck, with shares worth only 97 cents on the dollar, due to $785 million worth of Lehman Brothers blue-chip commercial paper and medium-term notes that had fallen to zero value as of 4 p.m.

Justin F. Ficken, a former broker with Prudential Securities, pled guilty before U.S. District Judge Patti B. Saris on Monday to deceptively market timing mutual funds for seven hedge funds between January 2001 and September 2003, earning himself and two other brokers a combined $6 million in commissions.

With Lehman Brothers’ in Chapter 11, Bank of America acquiring Merrill Lynch, Fannie Mae and Freddie Mac bailed out by the government, Bear Stearns acquired by JPMorgan and the future of AIG and Washington Mutual now hanging in the balance—mutual fund investors are calling to find out about potentially treacherous exposure. But so far, The Wall Street Journal reports, they are holding steady and not seeking mass redemptions.

A number of leading mutual and pension funds are invested in Lehman, Merrill Lynch and AIG and could suffer as a result, the Toledo Blade reports. How badly the shock to investors’ retirement savings will be, has yet to be sorted out, however.

As the shock of the turmoil in the financial services industry continues its ripple effect, businesses and governments outside New York and Boston are bracing for lower tax rolls as a direct result of tax cuts.