Mutual funds

While hybrid mutual fund and annuity product solutions began gaining advisers’ and investors’ attention last year, such managed payout funds still have flaws. That’s according to a report from MarketWatch.

New York Attorney General Andrew Cuomo is reportedly looking into whether Fidelity Investments might have been motivated to sell Goldman Sachs' underwritten auction-rate securities due to a pre-existing business relationship.

Baby Boomers and their financial advisers are going to increasingly look for one-stop-shop solutions that combine mutual funds, annuities and systematic or laddered drawn-down schedules, Investment News reports.

The unbridled growth of exchange-traded fund assets and products appears to have hit a speed bump, at least for now, The Wall Street Journal reports.

CLSA Capital Partners has created a new fund that invests in Asian water and waste management opportunities, Reuters reports.

Citigroup plans to revamp its capital markets business under its investment-banking arm.

A ruling last month by the Internal Revenue Service, limiting the ability of investors in funds of hedge funds to deduct management fees from their federal income taxes, could prompt some managers and their investors to either redo their tax forms or challenge the decision.

The chairman of South Korea's Financial Services Commission, Jun Kwang-woo, spoke out Monday about last week's reports that state-controlled Korea Development Bank was possibly interested in buying Lehman Brothers.

Catherine J. Weatherford has been named president and chief executive officer of NAVA, the Association for Insured Retirement Solutions, based in Reston, Va.

Don’t throw the baby out with the bath water.That, essentially, is the message from Vanguard Chairman John Brennan to the Securities and Exchange Commission, in response to the SEC’s plan to change a rule governing money market funds - making Vanguard the first major mutual fund company to protest the proposed change.In response to the subprime crisis, and the apparent failure of ratings agencies to properly grade the securities, the SEC is proposing shifting the responsibility for assessing short-term debt from Moody’s, Standard & Poor’s and Fitch, to squarely on the shoulders of asset management firms.That would be a mistake, Brennan argues, that could harm investors in the $3.5 trillion money market mutual fund industry.“It is our view that the proposed elimination of ratings would remove an important investor protection from Rule 2-a7, weaken investment standards and, potentially, pose a risk to the long history of stability of the $3.5 trillion money market fund industry,” Brennan wrote in a letter to the SEC.“Ratings, even if occasionally imperfect, protect investors by establishing a uniform, minimum credit quality for all money market funds. Removing that investor protection is akin to outlawing seat belts.”

Rather than acquire or invest only in companies seen as turnarounds, private equity firms are increasingly attracted to the strength and high-net-worth retail customer base of asset management firms, a category they traditionally have sidestepped, Dow Jones reports.As Miguel Sagarna, a partner in the private equity group at KPMG, put it, “It’s a very scalable business, and it is a good quality product, it can grow fast with good margins.”And with so many banks and asset management firms looking to raise capital by selectively selling off divisions, private equity firms are seeing this as a great opportunity to take advantage of good prices. Some are even planning to build broad financial services operations, said William Kirsch, chairman of the private equity group at Paul Hastings.Certainly, private equity firms are looking to diversify their holdings, Sagarna agreed.However, since most private equity firms closely guard their business, it is likely they will run any asset management firms they acquire alongside their business, experts said. That does not mean that they may not still share information and research, Kirsch said.Asset management firms might even help private equity shops develop new products, added Adam Schneider, a principal at Deloitte.

Mutual fund managers in China are waiting for the economic outlook to improve before they launch new funds, according to China Knowledge Press.Industry insiders say that as of Aug. 18, managers of 16 funds that have already received approval from the China Securities Regulatory Commission, including nine stock funds and seven bond funds, are waiting to launch until the Chinese stock market and investor attitudes improve.According to official statistics, there were 88,000 new accounts for fund investment in July, down 19% from the prior month. There were 5 million new accounts added in August 2007.

Total assets in money market mutual funds fell by $1.45 billion to $3.573 trillion for the week ending Aug. 20, according to the Investment Company Institute. Assets of retail money market mutual funds fell by $1.35 billion to $1.239 trillion.Taxable money market fund assets in the retail category fell $2.85 billion to $931.24 billion, while tax-exempt fund assets rose $1.49 billion to $307.45 billion.Institutional money market fund assets fell $98 million to $2.334 trillion, while taxable money market fund assets rose $2.02 billion to $2.126 trillion and tax-exempt fund assets fell $2.12 billion to $208.12 billion.The seven-day average yield rose from 1.84% to 1.87% for the week ending Aug. 19, and the 30-day average yield rose from 1.85% to 1.86% during the same period, according to iMoneyNet Inc.'s Money Fund Report.The seven-day compounded yield increased from 1.86% to 1.89%, and the 30-day compounded yield rose from 1.87% to 1.88%. The average maturity of money fund portfolios was at 46 days, up from 45 days.

U.S. junk bond mutual funds saw $8.63 million in net outflows for the week ending Aug. 20, a steep drop from $53.47 million in inflows the previous week, according to AMG Data Services.The struggling economy and rising defaults have caused junk bonds to post a 2.73% loss year-to-date, the second-worst performance among fixed-income assets after asset-backed bonds, which are down 9.35% for the year.Junk bonds carry high yields to compensate for their risks and are rated below investment grade.

West Virginia and Nebraska offer the best 529 college savings plans, according to a ranking by SavingforCollege.com, a unit of Bankrate Inc., set to be released Friday.

Investors are interested in going green with their portfolio, but advisers are failing to even suggest investing in it, according to a Roper Center poll.

The Securities and Exchange Commission has unveiled its latest plan to make financial information far more accessible and easy to use.

U.S. investment bank Lehman Brothers is considering shedding part or all of its money management division in order to raise capital and ease real estate losses, according to the International Herald Tribune.

Many alternative asset managers, who brag about their ability to make money regardless of market conditions, posted their worst figures in years last month after worldwide sentiment suddenly changed on energy prices, financial stock and the U.S. dollar.

While there has been growing talk of the aging of America, two National Bureau of Economic Research economists have now coined a term for it: “age inflation,” The Wall Street Journal reports.