Mutual funds

MetaMarkets.Com of San Francisco filed with the SEC Sept. 8 for a new fund that will invest in IPO's and new companies involved in developing products the company believes will lead to technological, social and economic change, according to the SEC filing.

Exchange-traded funds could turn out to be "the most significant new product category" of the decade, according to Financial Research Corp. of Boston. They will "continue their recent dramatic growth rate for many years to come," according to a recent FRC report. Any fund complex that wants to appeal to a broad investor base should probably add the products to its offerings, the report said.

Exchange-traded funds are not the only exotic new product shaking up the mutual fund industry. A new breed of customized, web-based baskets of stocks has recently come to market.

California Federal of San Francisco has just joined the growing number of banks offering checking accounts with a "sweep" function that invests excess money in money market mutual funds.

In response to the increasing popularity of exchange-traded-funds, two firms are about to introduce two variations of the product.

Separately-managed account assets grew four percent during the second quarter, according to Cerulli Associates of Boston.

Following its acquisition of U.S. Trust of New York this past June, Charles Schwab & Co. of San Francisco will offer an $800 million private equity fund for wealthy investors this fall, a Schwab spokesperson said.

SEI Investments of Oaks, Pa. will introduce after-tax performance reporting for all SEI investor accounts in the fourth quarter of this year.

Calvert Group of Bethesda, Md. filed with the SEC Aug. 4 to offer the Calvert Social Investment Fund Technology Portfolio.

NEW YORK - The American Stock Exchange is close to filing a patent for an actively-managed exchange-traded fund, but the structure of such a fund is still a mystery, said Debbie Fuhr, a vice president with Morgan Stanley & Co. International of London, a subsidiary of Morgan Stanley Dean Witter of New York.

Global Asset Management of Hamilton, Bermuda is planning to file with the SEC to introduce three new closed-end funds in October that will invest in hedge funds, said David Anderson, managing director of Global Asset Management.

State Farm Mutual Automobile Insurance Company of Bloomington, Minn. has filed with the SEC to offer ten mutual funds to the public.

Two of the first exchange-traded funds based on pan-European indices were launched last week by Barclays Global Investors of San Francisco, said Kerry Steele, a company spokesperson.

Fidelity Investments of Boston plans to add an open-end floating-rate bank loan fund to its Fidelity Advisor Series II family of funds, according to an SEC filing.

Water Island Capital of New York has filed a registration statement with the SEC to offer the Arbitrage Funds. The funds will invest at least 65 percent of their assets in companies involved in mergers or acquisitions.

The New York Stock Exchange will begin listing exchange-traded funds in the fall, said Richard Grasso, CEO of the New York Stock Exchange. The majority of exchange-traded funds are currently listed on the American Stock Exchange.

The Fortune Group has licensed State Street Global Advisors of Boston to manage two exchange-traded funds based on the Fortune 500 and Fortune e-50 stock indexes. SSGA filed a registration statement with the SEC last week for both of the exchange-traded funds, the Fortune 500 Index Tracking Stock and the Fortune e-50 Index Tracking Stock, according to Fortune.

If funds want to offer exchange-traded funds, they might be wise to follow SSB Citi Asset Management Group of New York and Whatifi.com of San Francisco and start by launching traditional index funds, according to some industry analysts.

Exchange-traded funds are variously seen as new products that will radically change the mutual fund industry or the latest novelty that will fleetingly appeal to fickle investors and then be forgotten.

With the volatility of the equity market showing no sign of lessening, some fund companies are taking steps to protect investors from that volatility.