Posts belonging to Category Mutual Funds

JPMorgan Proprietary Funds Torch Investors


JPMorgan financial advisers say that they were encouraged to push the firm’s proprietary products despite the availability of less expensive, better performing alternatives, and that the firm exaggerated the returns of at least one crucial offering (See “Former Brokers Say JPMorgan Favored Selling Banks’ Own Funds Over Others,” by Susanne Craig and Jessica Silver-Greenberg).

Many ‘Safe’ Investments Aren’t So Safe


Wall Street is adept at adjusting its marketing to the times and is never at a loss to pitch products, including those designed to play on investor fears. After all, that is what securities salespeople do. Many investments that Wall Street is currently calling “safe”, however, are actually both too risky and too costly, as […]

Regulators Warn Investors About Floating Rate Bond Funds


Investors in search of higher yields are increasingly being steered into funds that buy floating rate bank loans. They are pitched as paying 5% with little if any interest rate risk. However, the Financial Industry Regulatory Authority (FINRA) warns that these loans come with significant risks, including potential credit, valuation and liquidity problems.

OppenheimerFunds Penalized More Than $35 Million for Misrepresenting Bond Funds


OppenheimerFunds has agreed to pay more than $35 million to settle SEC charges the investment management company and its sales and distribution arm made misleading statements about two of its mutual funds in the midst of the credit crisis in late 2008. The settlement payments consist of a penalty of $24 million, disgorgement of $9,879,706, […]

Floating-Rate Bond Funds May Not Be All They Are Cracked Up To Be


Investors need to be cautious when considering floating-rate bond funds. Such funds are attractive to investors because of their relatively high-yields and of their inflation-protection based on the fact that they are floating rate. With inflation running at 2.3 percent, and 10-year U.S. Treasuries paying 0.6 percent less than that, floating rate funds paying an […]

Regulators Eye the Role of Investment Wholesalers in Providing Misleading Disclosures to Investors


The Financial Industry Regulatory Authority (FINRA) is showing stepped-up interest in the role of broker-dealers and individuals that act as wholesalers in the sale of private (Reg D) offerings that clients and often brokers do not fully understand. (See InvestmentNews article by Bruce Kelly entitled “Finra eyes wholesalers’ role in vending.”

Chasing Higher Yields Involves Taking Greater Risk


The prospect of several more years of extremely low interest rates is causing people who depend on interest income to accept Wall Street’s recommendations to purchase relatively illiquid and opaque alternative investments like structured products, non-traded REITs, hedge funds and variable annuities. (“Itchy Investors Ramp Up the Risk,” Wall Street Journal). Regulators worry that the […]

Junk Bonds – Higher Yield/Higher Risk


There has been a marked uptick in purchases of high-yield or junk bonds by retail investors. Junk bonds pay a higher interest rate to compensate investors for the increased risks of default, among other risks. So far this year, retail investors are have put $11.8 billion into junk bond mutual funds, $9.9 billion into investment […]

Concerns About the Municipal Bond Market Rise


Various well-respected market followers are beginning to sound alarm bells regarding municipal bonds and municipal bond funds. Investors and financial advisers are encouraged to take heed and proceed with caution.

More Investors Avoid Stocks – Demand for Equities Drops


The dynamics of equity investing are changing and investors need to consider these changes when making investment decisions. Investors have pulled over $400 billion out of equity mutual funds since 2008, resulting assets of some of those funds being cut in half. Money has flowed into bond funds, but even more money (eight times as […]