Fidelity newsletters duke it out
From The Boston Globe
Two newsletters devoted to analyzing Fidelity Investments are in the midst of a nasty legal feud over who is best placed to cast an objective eye on the mutual fund behemoth. On one side is Eric M. Kobren, publisher of Fidelity Insight newsletter, the dean of the half-dozen independent publications devoted to Fidelity. In the other side is James H. Lowell, whose upstart Fidelity Investor has won a quick following with its snazzy commentary. At issue is a Lowell promotion called "Confessions of a Fidelity Insider." In the promotion, Lowell says he was prevented from writing objectively about Fidelity funds while editor of Kobren's newsletters from 1994 to 1996 because of Kobren's loyalty to the firm.
Growth and income lose their cushion
From The Boston Globe
A few years ago, growth and income funds were promoted with the idea that their above-average dividend yields would help cushion stock market downturns. Investors who wanted some growth could have the safety net of higher yields to boot. Growth and income funds remain popular but their yields today are often no greater than the market averages, and are sometimes less. Shareholders realize greater value when the funds use excess cash flow to buy back their own shares, rather than raise dividends. To handle the situation some fund companies have added convertible bonds or fixed-income securities to boost growth and income fund yields. Others have made yields a less important aspect of the investment process.
British companies create cross-trading venture
From The Wall Street Journal
British fund managers have formed a new company to handle the trading of stocks directly among themselves, which is like U.S. by brokerage firms to expanding the role of electronic-trading systems. The cross-trading will be on a network set up by a newly formed company called E-Crossnet Ltd. Merrill Lynch's Mercury Asset Management Group and Barclays Global Investors are spearheading the venture with the participation of 19 other fund companies. E-Crossnet is scheduled to be operating by first quarter 2000. The system is expected to offer cheaper transactions by matching buyers to sellers without the aid of a human intermediary -- like an ECN.
Neuberger goes for the IPO, again
From The Individual Investor
Neuberger Berman's second try at an Initial Public Offering
(IPO) may finally be a go. But analysts note the company will likely encounter
some market turbulence. The company will be entering into a market that has seen
about a 7% gain in the S&P 500 Index year-to-date. Also, industry analysts
note that about $100 billion has poured into U.S. equity mutual funds this year.
However, the atmosphere for asset management companies has been somber, and
Neuberger will join a number of money management firms that also manage mutual
funds and that will have larger valuations and a history of healthy returns.
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