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Wednesday, November 02, 2011

Fund Firms Downplay MF Global's Collapse

News summary by MFWire's editors

On Monday $40-billion securities and trading giant MF Global filed for chapter 11 bankruptcy protection, and mutual fund firms are already rushing to downplay the collapse or distance themselves from it.

Fortune and Bloomberg both highlighted some of MF Global's top common shareholders. It looks like several fund firms owned big chunks of MF Global, probably through their mutual funds and other investing products.

Fortune claims Fidelity institutional arm Pyramis Global Advisors holds 8.66 percent of MF Global's common shares, while Bloomberg says Fidelity held 14.8 percent. Both list TIAA-CREF as holding a bit less (Fortune say 5.77 percent, Bloomberg 6.6 percent). Fortune also mentions quasi-indexing giant Dimensional Fund Advisors (5.41 percent) and Rydex Security Global Investors (5.13 percent).

TIAA-CREF declined to comment for this story. A Fidelity spokesman told MFWire.com's sister publication, The 401kWire, that, "as of September, the majority of Fidelity's equity portfolios Ö did not hold MF Global stock" and that the Boston Behemoth does "not expect developments involving this company or its stock to have a significant effect" [see The 401kWire, 11/1/2011].

Rydex, now part of Guggenheim, released a statement clarifying that it held less than 0.25 percent of MF Global's common shares, not the 5.13 percent reported by Fortune, and that the shares are spread out among six index-based Rydex products.

Fortune also listed Guardian's RS Investments as holders of 7.81 percent of MF Global's common stock, but a Guardian spokeswoman clarified that the RS Partners Fund unloaded its MF Global shares on October 26, five days before the bankruptcy filing.

And Eaton Vance felt the need to issue its own release clarifying that, "as of October 31, 2011, no Eaton Vance mutual fund, institutional separate account or pooled vehicle had exposure to MF Global Holdings Ltd. securities."

Company Press Release

Eaton Vance Comments on Exposure to MF Global Holdings Ltd BOSTON, November 1, 2011 - Securities firm MF Global Holdings Ltd. announced its Chapter 11 bankruptcy filing on Monday, October 31, 2011. As of October 31, 2011, no Eaton Vance mutual fund, institutional separate account or pooled vehicle (LLCs, CITs, etc.) had exposure to MF Global Holdings Ltd. securities,

nor was MF Global Holdings Ltd. counterparty to any positions within any Eaton Vance mutual funds or institutional accounts or vehicles.

©2011 Eaton Vance Investment Managers

Two International Place, Boston, MA 02110 800.225.6265 www.eatonvance.com

Company Press Release

New York, Nov. 1, 2011 -- In response to recent reports that Security Investors, LLC ("Rydex|SGI") owns more than five percent of MF Global Holdings Ltd ("MF Global"), Rydex|SGI stated today that its exposure to MF Global as of September 30, 2011, including the exposure of mutual funds and ETFs managed by Rydex|SGI, is substantially less than 0.25 percent of MF Globalís outstanding common stock. Currently, six Rydex|SGI index-based funds hold MF Globalís stock in approximately the same proportion as in each fundís underlying index.

Rydex|SGI manages approximately $24 billion in assets, including approximately $8.3 billion in exchange traded product assets. The firm offers institutional investors and financial intermediaries a broad spectrum of traditional and non-traditional investment options that span four distinct disciplines: fundamental alpha (actively-managed equity and fixed-income), alternative strategies, target beta strategies, and ETFs.

Read the fundís prospectus and summary prospectus (if available) carefully before investing. It contains the fundís investment objectives, risks, charges, expenses and other information, which should be considered carefully before investing. Obtain a prospectus and summary prospectus (if available) at www.rydex-sgi.com or call 800.820.0888.

Rydex|SGI funds are distributed by Rydex Distributors, LLC (RDL). Security Investors, LLC (SI) is a registered investment advisor, and does business as Security Global Investorsģ and Rydex Investments. 

Edited by: Neil Anderson, Managing Editor

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