Blackrock, Federated Expected to Post Strong Earnings
From Wall Street Journal
While the stock market is down so far this year (for the first time in half a decade), earnings for asset managers still appear to be climbing. Most publicly owned asset managers are expected to report moderate improvements in their earnings for the quarter ended Sept. 30, according to the paper. The slowdown in the stock market and fund business may start to be felt in the fourth quarter, though. Fund flows, for example, doubled in the third quarter from a year ago. Yet, in September they fell to levels half those of September 1999. Analysts quoted in the articles expect the best growth to be reported by institutional specialists Blackrock and Federated Investors. Troubled reports could be turned in by retail-focused Stilwell Financial and Franklin Resources.

ETFs Haul in $5.6 Billion
From CBS.MarketWatch
Exchange-traded funds are a growing niche but they are still a long way from dominating the fund industry. In the third quarter these funds brought in $5.6 billion in new assets, according to New York-based Strategic Insight. Yet, this amount is equal to just a quarter of net cash flows for the fund industry in just the month of August (they are equal to half of September's flows). Altogether, 89 ETFs now hold $57.5 billion in assets. The other news is that the American Stock Exchange is losing its monopoly over the product. Last year it claimed 100 percent market share. Now that figure is down to 80 percent.

Active Funds Beat Indexes
From Investors Business Daily
Just when index funds were thought to have swept the field, the human hand is back. Fully 83 percent of actively managed funds are leading the S&P 500 so far in 2000. The article reports, that "from 1989 to 1998, 86% of actively managed large-cap growth funds were beaten by large-cap growth index funds." Actively managed funds started to reverse this trend in 1999, right when many pundits thought them dead.

Funds are Too Confusing
From San Francisco Chronicle
The fund industry has certainly been successful -- it now counts 88 million Americans as shareholders -- yet it is becoming more complicated for the average investor to understand. The article recommends that new investors cut through the clutter by focusing on fees and taxes. On the fee side, it explains that "the more management you get, the higher the fees". On the tax side, it explains capital gains distributions and dividends.

Which Funds Are Best to Avoid Cap Gains?
From Smart Money
Yet another article explains the lurking time bomb of fund capital gains distributions. This one, though, also recommends funds that are avoiding the distribution trap. They are: IPS Millennium, White Oak Growth Stock and American Trust Allegiance.

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