Grammar by day, stocks by night
If you want to moonlight as a mutual fund manager while working at The New York Times
you might find yourself in a sticky situation. An arbitrator has ruled that the newspaper can bar one of its copy editors, William D. Curtin, from starting his own mutual fund. While a copy editor on the metro desk, Curtin, filed papers with the Securities and Exchange Commission to start his own fund. He planned to call it the Breezy Point fund and invest its assets in out-of-favor companies whose stocks were undervalued. Originally the Times did not see a problem with Curtin checking grammar by day and stocks by night but later decided that it would be a conflict of interest.
PNC seeks more predictability
From The Wall Street Journal
As reported yesterday in MFWire.com, PNC Bank Corp. said it is seeking to add predictability to its earnings stream and has agreed to buy First Data Corp.'s mutual-fund servicing unit for $1.1 billion. The acquisition will add to the size of the Pittsburgh bank holding company's PFPC Worldwide, already a large player in fund-accounting and processing services. With the addition of Investor Services Group, the PNC unit will jump to near the top of the heap of the obscure but sizable business of providing essential back-office services to the mutual-fund industry. Wall Street analysts view this move as a way to add growth and stability to an acquiring company's earnings. On average, the business carries profit margins of about 25%, significantly higher than the return banks get on commercial loans.
To whom does a track record belong?
From The Wall Street Journal
Ryan Jacob, former manager of the successful Internet Fund, finds himself in a dilemma as he attempts to launch a new mutual-fund company. His predicament revives the debate over who owns rights to hot performance numbers when a fund manager departs. The U.S. Securities and Exchange Commission, see the numbers as belonging partly to the manager. But the regulatory unit of the NASD and fund companies considers such figures to be the property of the old employer. As matters stand right now, Jacob can mention his old fund's performance in official SEC filings, but he isn't allowed to do the same on his Web site, or in television, newspaper or magazine advertisements, which are all monitored by the NASD's regulatory unit.
Indexing funds with different returns
From Investor's Business Daily
Although many funds track the S&P 500 not all of them have the same returns. Through July 8, GE's Institutional S&P 500 Index fund was the best-performing S&P 500 index fund this year, gaining 14.62%, according to Lipper Inc. The worst? Pillar's Equity Index B offering, which gained only 12.81%. Two funds that mimic the market benchmark can post very different returns due to a variety of factors, ranging from expenses and transaction costs to how quickly--and efficiently--a fund manager puts fresh cash to work.
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