Nearly 90 Million Americans Now Own Funds
From New York Times
More United States households own mutual funds than ever before, says the Investment Company Institute. Five million Americans purchased fund shares for the first time last year, making the total number of shareholders 87.9 million. The number of households owning funds climbed 4.5 percent, to a record 50.6 million this year. Currently 49 percent of households own funds compared to 47.4 percent a year ago. Only 17 percent of families earning less than $25,000 own funds compared to 79 percent of families earning $100,000 or more.
Who's Planning on Using E-signatures
From Wall Street Journal
Fidelity Investments, Vanguard Group, Janus Capital and American Century Investments are among fund companies that will be enabling electronic signatures by year end. Meanwhile, Charles Schwab is reportedly only planning to use electronic signatures in certain situations. The Electronic Signature in Global and National Commerce Act takes effect Oct. 1. The report adds that Invesco, Wasatch Funds, Marsico, Whatifi.com and Quant Funds, already offer online account registration. Finally, T. Rowe Price says it doesn't see much demand for opening new accounts online and does not plan and expects to not offer this option until the first half of 2001. Some smaller firms such as MetaMarkets.com have decided the option is too expensive.
Neighbor Run Funds Catch On
From Boston Globe
Funds that make investments based on the recommendations of their shareholders, or the public, get the ink in this article. The "neighbor-run" funds include the Stockjungle.com Community Intelligence fund (up 45.4 percent this year), MutualMinds, Marketocracy, Maxfunds, and iExchange. Analysts at the Allied Owners Action fund (www.eraider.com) select their own stocks and then encourage debate on Web message boards. Kurt Cerulli goes on the record callig these funds are "just a fad.''
The Top Enhanced Index Funds
From Investor's Business Daily
Many enhanced index funds are falling down on the jog, according to the paper. The reasons: "Some of the methods used to enhance their returns over their base indexes don't work as well as others. Or they don't work all of the time." The article also highlights winners including: Aetna Index Plus Large Cap Fund and Schwab Analytics Fund.
Picking Web-based 401k Plans
From Los Angeles Times
Web-based 401(k) programs are getting noticed. The paper compares the players in this emerging market, including: Fidelity Investments (http://www.fidelitye401k.com), ExpertPlan.com, (http://www.expertplan.com), GoldK.com (http://www.goldk.com), and Ez401k.com (http://www.ez401k.com). Surprisingly absent from the article is Invesmart and The Principal. The article also focuses on the complexity of 401(k) programs and warns that "only the hardy do-it-yourselfer with very simple needs should go it alone."
The Roth 401k is back
From Wall Street Journal
The Roth 401(k) is back. Senate Finance Committee Chairman William Roth again introduced legislation designed to create a 401(k) similar to a Roth IRA. The legislation would also raise contribution limits for individual retirement accounts and 401(k) plans.
The bill would raise contribution limits to $15,000for 401(k)s and $5,000 for IRAs. It also includes the "catch-up" provision for people over 50. The White House opposes the bill and Treasury Secretary Lawrence Summers said the bill would not help rank-and-file employees and lower-income people who don't have retirement plans. The bill calls for a tax credit to offset the first three years of costs for small businesses that start new retirement plans for their employees; reduces from five years to three years the time it would take an employee to be fully vested in an employer's retirement program; requires a company to provide workers with a written notice, including examples and explanation of rights, when a pension plan is converted to a "cash balance" or other hybrid program that could reduce their long-term benefits.
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