E*Trade targets FOLIOfn
From Wall Street Journal
E*Trade Group is hoping to launch its service to let investors put together a ppseudomutual fund along the lines of FOLIOfn and ShareBuilder.com. The online broker is leveraging its purchase of Electronic Investing Corp. to build out this service.
Amy Errett, chief asset gathering officer at E*Trade is quoted as saying that fees for the service are likely to be a combination of an account fee as well as some transaction fees.
Merrill confirms layoffs
From New York Times
Merrill Lynch & Company officials confirmed yesterday that they are indeed taking out the axe. The firm will cut about 1,800 jobs (slightly fewer than the rumored 2,000) with most coming out of its operations in Plainsboro, New Jersey according to an internal statement at the firm. Starting this week the firm will eliminate 900 operations jobs and 400 consultants and independent contractors. It will also eliminate 500 positions through attrition. E. Stanley O'Neal, who heads brokerage operations said that operations expenses have been growing at 25 percent a year while earnings are growing 15 percent. Thomas Patrick, the chief financial officer expects to cut $150 million in costs through the move. Merrill also announced that its earnings 34 percent, but that it took in just $11 billion in new assets. This compares to $26 billion at Charles Schwab. It also announced that it will split its stock.
Tech funds are the rage
From Boston Globe
Technology is an asset class, not a sector, says the paper. It points to a new tech fund from Putnam Investments, MFS Investment Management launch of technology fund and a global telecom fund and Fidelity Investments plans to offer two new select funds, one for the wireless industry, one for the networking business come September. Also readying new tech funds are: Pioneer, Neuberger & Berman, Oppenheimer, Franklin, and Charles Schwab. Why the new funds? According to FRC one of three new dollars invested in funds go to tech funds so far this year. Technology stocks also account for 34 percent of the Standard & Poor's 500 index, according to the article.
Fidelity back into tech
Fidelity is still into tech/ The funds five largest funds all added to their tech holdings in June, according to TheStreet.com. Magellan's investments in tech rose to 35.1 percent from 32 percent at the end of May. One exception to the trend was Low-Priced Stock which dropped its tech stake to 13.9 percent from 14.4 percent.
Fund shareholder tax relief
From Boston Globe
A little-known bill dubbed the mutual fund shareholders tax relief bill is wending its way through Congress. Despite the bill's obvious benefits and limited downside its passage remains a long-shot, however. The bill would allow fund owners to exclude up to $3,000 in capital gains per person ($6,000 for a married couple) received from funds in which they reinvest those gains, rather than taking the cash. The amounts will be indexed for inflation. The effect of the bill would be to eliminate the capital gains distribution tax issue for most investors. It would also render the SEC's efforts to make funds report after-tax returns less meaningful. Its best chance at passage is if its is attached to another bill, otherwise, it is likely to be a case of "wait until next year".
From Los Angeles Times
Ceridian Corp. plans to focus on its human resources and cash-transfer businesses by spinning these units out of its Arbitron unit. Arbitron tracks radio an television ratings. No date has been announced for the move, nor has a distribution ratio. Ceridian will assign about $250 million in debt to Arbitron and keep about $300 million in remaining debt.
Treasury Dept encourages savings
From USA Today
Washington remains worried about the nation's low savings rate. (It has fallen to 0.3 percent of disposable income in this year's first quarter). One solution to the problem proposed by Treasury Secretary Lawrence Summers is to allow automatic enrollment in 401(k) plans. The Internal Revenue Service issued a revenue ruling to that effect yesterday.
Van Wagoner's bet
Van Wagoner funds were highlighted by TheStreet.com for offering funds with similar "genetic code". Four of the firm's five funds are in this weeks leaders with very similar returns, yet each are supposed to follow a different mandate. Indeed, the funds include a micro-cap focus, a mid-cap focus and a small-cap focus. What's the similar genetic code? The top-five holdings for all of the funds are virtually identical. The holdings are: Ariba, Interwoven, StorageNetworks, Netro, SDL, Cobalt Networks and Natural Microsystems.
Will Asia funds rebound?
From Wall Street Journal
Long-suffering Asian funds may be in for a bountiful quarter, according to the paper which argues that an upturn in June may continue. Among the funds highlighted are Magnum Fund Management Ltd.'s Galleon fund, Robeco Group NV's RG ZelfSelect China fund, Value Partners A fund, and Dresdner RCM Global Investors Asia Ltd. The article also highlights the buildup of cash by Fidelity fund managers in April.
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