Week in Review
June 30, 2008
Morningstar Builds Up Adviser Workstation
Morningstar has upgraded its investment planning site, Advisor Workstation Office Edition. Of primary focus are the additions to the asset allocation and portfolio construction functions. Ibbotson Associates, an investment advisor and Morningstar subsidiary, has created capital market assumptions and wealth forecasting tools that allow financial advisers to construct investors' portfolios in an innovative way.
Ibbotson capital market assumptions offer advisers a wealth of knowledge on pre-tax returns, correlations among asset classes and standard deviations that can be used to replace or in conjunction with their own personal estimations. Further information on account taxes, required minimum retirement account distributions and penalties for early withdrawals also allow advisers to forecast a wide range of portfolios for their clients.
Fidelity Absorbing Six Capital One Funds
Capital One Funds' board has approved a transfer of assets from each of its six fund portfolios to comparable funds at Fidelity, a filing with the Securities and Exchange Commission shows. The agreement, pending shareholder approval at the third-quarter shareholder meeting, would go into effect in October.
Vanguard Windsor Mgr. Booted for Poor Results
Due to prolonged weak results, Vanguard has replaced David Fassnacht as the portfolio manager of the $19.2 billion Windsor Fund and the $490 million Vanguard Capital Value Fund.
Control of the underperforming value funds has been designated to 49-year-old James Mordy, who will oversee the Windsor fund, and 47-year-old Peter Higgins, who will manage the Capital Value fund. Both men are senior vice presidents and partners at Wellington Management, a firm that has managed the Windsor fund since its inception in 1958.
Performance is "never the only reason that we choose to hire or retain, [but] after careful consideration of these factors and in talking with Wellington, we concluded that the funds would be best served with a change in portfolio manager within Wellington," said Linda Wolohan, a spokeswoman for Vanguard.
Through June 20, Vanguard Windsor and Capital Value have respectively declined 13.8% and 15.6% this year. According to Morningstar, Vanguard's large-cap value rivals are off roughly 10.4% on average.
In a 2007 letter to shareholders, Vanguard Chairman and Chief Executive John Brennan acknowledged the less-than-stellar results. He wrote: "Although the [Capital Value] fund enjoyed a strong gain in the 2007 fiscal year, its average annual return since its late-2001 inception has not kept pace with results for its benchmark index or peer group."
"The bottom line is that the funds have been doing pretty terribly," said Daniel Wiener, editor of the Independent Advisor for Vanguard Investors.
Teachers, Jr. Achievement Educate Youth on Finance
A shocking lack of financial knowledge among teenagers has caused Junior Achievement and the National Retired Teachers Association to band together to help bridge this gap.
A study conducted in 2006 by the National Financial Literacy Summit showed that 60% of teens throughout the U.S. could not decipher the underlying differences between cash, checks and credit cards.
The two groups will now teach such basic financial principles as budgeting, savings and other practical skills needed to be successful in the workplace and in life.
This spring, cities such as Chicago, Columbus, Ohio, Phoenix and Washington will lead the nation in inducting such programs, and later this year, the organizations will expand financial literacy to youths nationwide.
JPMorgan Fund Website In Ease-of-Use Redesign
Since the redesign of JPMorgan Fund Management's adviser website, usage of the site has increased. The improved design and usability of the site is a collaboration of the top practices of other successful financial management sites, offering improvements in design and convenience for advisers' usage.
Specific applications further demonstrate the quick, easy functioning of the new site. The creation of the New Fund Explorer application makes accessing fund information simple and quick. Advisers are able to easily match investor's desired characteristics, asset class, performance ratings and other information, with a click of the mouse.
The Fund Profiles new layout is clear and straightforward, with information on fund performances, holdings, fees and other important figures now easily accessible. My Portfolio is a new application within the Prices and Performance section of the website where advisers can customize the site for each individual investor and save the modified settings as they go.
Each alteration to the website has been created to promote convenience and up-to-the-minute knowledge for advisers, creating what JPMorgan calls an "intelligent relationship" between them and their investors.
Wilmington Trust Buying UBS Retirement Unit
Wilmington Trust Corp. of Delaware announced last Wednesday that it has agreed to buy UBS Fiduciary Trust Co. of Weehawken, N.J., a provider of trust and investment management services for retirement plans, from UBS AG of Zurich.
UBS Fiduciary Trust would become part of Wilmington Trust's retirement and institutional services group in its corporate client services business. The deal is to be completed this summer. The price was not disclosed.
Wilmington Trust has already completed a deal for its retirement services business this year. It bought AST Capital Trust Co. of Phoenix, a provider of directed trustee and trust administration services offered through financial advisers, on April 30. AST had been and remains an outsource provider of fund accounting and benefit payment services to UBS Fiduciary Trust's retirement plan clients.
Wilmington Trust's retirement and institutional services group provides directed trustee, custodial, trading and paying agent services to more than 3,000 retirement and employee benefit plans with more than $41 billion of assets under administration. UBS Fiduciary Trust has 800 plans and $5.5 billion under administration.
UBS Fiduciary Trust's trust and investment management services would continue to be available through 8,200 UBS advisers.
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