Ouch! That may be investors' reaction to the earnings report issued by T. Rowe Price Group. The fund firm reported a 19 drop in net income for the fourth quarter and $196 million in full-year earnings on $1.0 billion of revenues. The firm also revealed a $34 million drop in expenses after its institution of cost cutting efforts. For the full year, 2001 turned out to be one of the toughest in the Baltimore firm's industry. As one of the only public fund firms, the results at T. Rowe may offer insight to the rest of the industry. Bigger than the hit on earnings was the decline in revenue. Revenue fell by $50 million to $241.3 million from $291.6 million for the quarter. For the year the $1.0 billion in revenues was down from $1.2 billion in 2000. Still, the asset base at the firm held up. Assets under managed dropped six percent during the year to close at $156.3 billion. This was a gain of 11 percent in the third quarter.



Exchange-traded funds grew their asset base by some 27 percent in 2001. ETFs ended the year with $83 billion in assets, according to the Investment Company Institute. This was up from $79 billion in November and $69 billion in October. ETFs started the year with $65.5 billion in assets.



Up to 50 mutual funds, including funds from American Express' AXP Funds, Putnam Investments, the Vanguard Group, Travelers and Prudential, faced exposure to Enron through one of the collapsed company's related entities. The exposure of the funds was small in relations to the fund assets, reports the New York Times. The investment was held in bond funds and came in the form of a private placement issued by Osprey Trust. The article suggests that some of the funds owning the debt may not have yet realized the diminished value of their positions.



College savings shine less brightly when investors lose money. That is the gist of an article in the Wall Street Journal. It points out that since the aggressiveness of the investment choices in these plans typically diminishes as the beneficiary ages. This means that "time is not your friend in 529 plans."



Neuberger Berman hired sports attorney Marvin A. Demoff to head its three-year old Private Asset Management Sports Group. Demoff joins the firm as a managing director from Mitchell, Silberberg & Knupp where he has been an attorney since 1986. He reports to Heidi L. Schneider, executive vice president and head of the Private Asset Management Group.  

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