Is owning index funds a good idea? It depends on the index, according to personal finance expert John Waggoner (“Funds following odd index? Just say no”). Broad based index funds are a good idea, but new exotic niche funds are not.
Many stock mutual funds are down for the year, and the reason why has to do in part with high expenses and use of derivatives. The average diversified equity mutual fund has declined 5.9 percent this year, compared with only a 1.4 percent decline in the S&P 500 stock index, and 92 percent of equity […]
For the seventh straight month, equity mutual funds reported net outflows (investor withdrawals). For the week ended November 30, equity mutual funds’ net outflows consisted of $6.67 billion from domestic equity funds and $2.96 billion from foreign equity funds, according to the Investment Company Institute, the national association of U.S. investment companies (i.e., mutual funds). […]
Wiretaps of hundreds of conversations have led federal authorities to pursue charges against individuals at two well-known hedge funds and an established mutual fund that caters to ordinary retail investors. The targets are former traders at hedge funds Diamondback Capital management LLC and Level Global Investors LP, and an analyst at mutual fund company Neuberger […]
The SEC is scrutinizing mutual funds’ fee arrangements, looking for instances of gouging, and finding plenty of them. Morgan Stanley just agreed to pay $3.3 million for its role facilitating over $1.8 million in payments by a mutual fund to a third party for services the fund did not receive (“Morgan Stanley Settles SEC Case,” […]
When world markets move significantly in apparent response to major macroeconomic news, even supposedly “uncorrelated assets” move in unison with them, according to Jason Zweig’s Wall Street Journal article, “Caging Raging Contagion.” Such a significant move occurred last week when the Italian government and bonds collapsed over its fiscal problems, and everything else fell, too.
Many target-date funds label their retirement-stage funds as “retirement income” funds, but that is misleading because these funds aren’t designed to generate income even though their names suggest otherwise.. See Tom Lauricella’s Wall Street Journal article entitled “‘Target-Date’ Funds Shortchanging Retirees
The Securities and Exchange Commission is expanding its investigation into the use of derivatives by mutual funds and exchange trade funds, and will also focus on problems related to disclosures, valuations, transparency, market volatility, liquidity and other systemic risks associated with exchange traded funds, particularly “leveraged” funds that amplify investor bets often through the use […]
Focus funds, highly concentrated (undiversified) and volatile equity mutual funds that are actively managed, are some of the worst performing funds of 2011. They typically own fewer than 50 stocks or have more than 50% of their funds invested in their top 10 holdings. They also have higher management fees. In an up year, focus […]
Wall Street is its own worst enemy, according to Tom Petruno of the LA Times (“Biggest Threat to Wall St. is the Enemy Within”). The enemy is not the occupiers of Wall Street or the regulators but the high-frequency computerized trading firms that comprise 70% of the market and cause the extreme volatility that is […]
