MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Tuesday, October 5, 1999 Odd Lots, October 5, 1999 The third quarter in review From The Wall Street Journal -- password needed The average stock fund fell 6.16% in the third quarter. The information is part of the WSJ's regular quarterly review of mutual funds today. Included are articles on: Japan funds after reforms, fallout from the liquidation of the ESC Strategic Value Fund, that large fund companies have no plans to change pricing methods if trading hours are extended.
Journal weighs in for indexing From The Wall Street Journal -- password needed Columnist Jonathan Clements weighs in with what he believes is the final word in the active versus passive stock fund debate. Using data from the Center for Research in Security Prices (CRSP) at the University of Chicago's Graduate School of Business he compares the returns of all funds (defunct and existing), weighted by assets against the returns of all stocks. The findings? Stock funds lagged stocks by 1.4% since 1961. This number is very similar to the average expense ratio of funds. No surprise, he is for indexing. Why Neuberger's IPO is a value stock From The New York Times -- password needed Neuberger & Berman may not be so good as market-timers today's NY Times implies. The firm is now expecting to price its IPO at $31 to $35 apiece, implying a total price of $1.55 billion to $1.75 billion. The pricing may take place as early as tomorrow. The firm, which manages $57 billion in assets, had been hoping for a higher valuation than the implied 12.5 price-to-earnings ratio. The problem? Public asset managers' stocks dropped by nearly a third in the past quarter. Neuberger is also trying to sell a portfolio of value orientated funds at a time when a few richly priced large caps stocks dominate the market. Funds fail to complete call on Sprint From The New York Post Beth Piskora uses yesterday's purchase of Sprint by MCI/Worldcom to illustrate what she sees as a defect in funds: Market timers miss out on capitalizing on news-driven events since funds price only once per day. She argues that this defect, and the tax issues of funds realizing capital gains, are reasons for the decline of the fund industry. "Mutual fund managers will continue to lose news-driven investors. Perhaps they don't care. Perhaps they really do just want long-term investors," she writes. "As more and more of us allocate at least some portion of our portfolio to stocks riding a fast upward move, executives at the mutual fund companies are going to have to come up with ways to keep us as customers." Unfortunately, she may be right in explaining the drop in popularity but wrong in criticizing funds for not being trading vehicles. Printed from: MFWire.com/story.asp?s=24639 Copyright 1999, InvestmentWires, Inc. All Rights Reserved |