MutualFundWire.com: Odd Lots, May 10, 1999

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Monday, May 10, 1999

Odd Lots, May 10, 1999

Fund Cos Disappearing Act
From The Wall Street Journal
Fund companies might be able to take their show on the road to Las Vegas: They are the masters of the disappearing act. The paper points out that 387 funds "disappeared" last year. That's up 47% from the year prior. The unsuccessful funds were merged with others to disappear their lagging track record. The latest performance was given by Stein Roe. The reason? The fund has seen 12% of assets flow out the door. For analysis of the changes take a look at Morningstar.Net.

Vanguard is Hot
From Morningstar.Net
Vanguard has hot money. Or so argues John Rekenthaler in his weekly Internet column. The funds most popular at Vanguard, Specialty Health, Large Growth, Large Blend, represent both the best returning and the hottest categories in the larger fund world. He argues that the implications are clear. Also, Schwab is getting flack from advisors for charging them $80 to make the same trade their clients can make directly for $29.95.

More on Berger Shake-up
From The Wall Street Journal
As we first reported last Friday, Berger Funds has gone through a staff shake-up, including the appointment of a new chief executive.

Merrill to Net for Advice
From The Wall Street Journal
Last week word first began to circulate that Merrill Lynch is preparing to offer Financial Engines asset allocation software to its 401(k) plan clients. However, neither company would comment on the rumors. This morning the Wall Street Journal jumped on the speculative bandwagon, noting the an announcement from the two firms is expected today. If true, the news marks a major break in strategy by Merrill Lynch, which has relied on its financial consultants to provide investment advice to plan participants. Still, in the case of participants with relatively low account balances, the software may relieve the consultants of an otherwise burdensome task. Merrill does run the risk, though, of training entry level investors to rely on software rather than a broker or other intermediary for these services.

Time to Rebalance?
From The Wall Street Journal
Charles Jaffe's report from last week's Morningstar conference is that advisors are now stressing rebalancing. This may explain at least some of the dropoff in fund sales. Even as stock funds lose popularity, bond fund sales are up.

Funds in the Press

Marla Brill in the Boston Globe reports that the market's recent return to cyclical stocks has been good news for Daniel Rice, manager of State Street Global Resources fund.