Is the future of the fund industry still rosy? Neither the mutual fund scandals of the past two years nor the maturity of have stopped investors from bidding up the stocks of mutual fund firms.
reports that the last three months, the Lipper Management Company index jumped 15.3 percent, outpacing the Standard & Poor’s 500-stock index, which posted a gain of 3.5 percent.
Investors have been looking favorably upon fund-company stocks, spurred by the continued inflow of money into the funds. Stock and bond funds pulled in $8.1 billion in fresh money in October, according to data from the Investment Company Institute. Stocks of fund companies have been enjoying good returns since 2003, when fund flows became positive at the close of the bear market.
Even scandal-tainted fund companies are seeing their shares soar. Janus Capital, for instance, rose 32.6 percent (mostly on takeover talk), while Alliance Capital gained 23.9 percent.
"In both companies, it seems like performance is improving," Fox-Pitt Kelton analyst Dave Haas was quoted in the report as saying.
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