More Risk-Tolerant Investor Seen
Mutual fund executives are predicting important changes for their industry in coming years.Executives from 10 mutual fund companies who answered a survey said issues such as consolidation among fund companies, growth of on-line investing, and a shift in how investors allocate assets will be key factors. Because of the bull market's stamina, mutual fund investors are accumulating assets rapidly and have become more knowledgeable and risk-tolerant, the study concluded.
The wide-ranging survey by San Francisco based Charles Schwab Corp.'s OneSource program, which offers 1,650 funds on-line, was done in December. Other key findings included a trend toward less diversification and more emphasis on performance, a heavy focus on large-cap growth holdings, a shift toward tax-deferred investing, and increased interest in global products.
The respondents, who included portfolio managers, chief economists, and other senior executives, were from Dreyfus Corp., a Mellon Financial Corp. unit; Marsico Capital Management LLC, which is partly owned by Bank of America Corp.; Scudder Kemper Investments; Montgomery Asset Management; Federated Investors Inc.; Liberty Funds Group; Berger Funds; Loomis Sayles & Co.; Safeco; and Neuberger Berman.
Commingled Trust Funds Unveiled
American Century Investments of Kansas City, Mo., has begun offering two commingled trust funds for bank and trust clients that can be sold as part of their defined-contribution plan offerings.The fund company, which is 45%-owned by J.P. Morgan & Co., offers the trust funds directly to plan sponsors through J.P. Morgan/American Century Retirement Plan Services. But banks and trust companies that offer 401(k) services to plan sponsors are asking for the products as well, said Ann Barry, program manager. Commingled trust funds pool assets from institutional investors and are similar to mutual funds.
American Century also said it would reimburse intermediaries that offer and service the funds 20 basis points of their total assets. The fund company has more than $110 billion of assets under management.
Scudder in $9M S. Korea Venture
New York-based Scudder Kemper Investments and Seoul-based Daewoo Securities have agreed to establish an investment management firm in Korea and offer locally registered stock and bond funds there.Scudder Investments Korea Ltd. is to get an initial capital contribution of $8.85 million from the two companies, based on Thursday's exchange rates, a Scudder spokeswoman said. Scudder is to contribute 80%, and Daewoo Securities 20%. The joint venture is awaiting licensing in Korea.
Scudder Investments has a prior relationship with Daewoo Securities, through Daewoo Capital Management, an investment adviser that subadvises two Scudder funds invested in Korean securities. Scudder Investments has also agreed to buy certain assets and liabilities of Daewoo Capital from Daewoo Securities.