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January 18, 2010

Past Issues

Mutual Funds

Week In Review

Morningstar Names Managers of the Decade Basing the awards on superior risk-adjusted results and shareholder stewardship, Morningstar has named its Fund Managers of the Decade, bestowing the honors on PIMCO's Bill Gross, Fairholme's Bruce Berkowitz and Oakmark's David Herro, respectively, for fixed income, domestic equity and international equity.

Distressed Debt Reaches for Fair Value

NEW YORK -- It's difficult to determine what something is worth if no one is buying or selling it. While cryptic mortgage-backed derivatives stymied the markets at the beginning of the credit crisis, industry experts predict commercial real estate will be the next shoe to drop. Even though the stock market continues to mend, distressed commercial real estate and bank debt need to regain value before the economy recovers for real, they said.

Hedge Funds

Hedge Funds Up 25%, Best Performance in a Decade

Hedge funds had their best year last year since 1999, according to the Hennessee Group. The Hennessee Hedge Fund Index gained 24.6% in 2009. Equity indices also gained in 2009, with the S&P 500 up 24.7%, the Dow Jones Industrial Average up 18.8%, and the Nasdaq Composite Index gaining 43.9%. In 1999, the Hennessee Hedge Fund Index was up 30.78%. "Hedge funds competed very well with the stock market, with a lot less risk. Whenever you can achieve market returns with a third less risk, that is professional money management, as opposed to the traditional money managers who are long-only and who achieve market returns with 100% net exposure," said Charles Gradante, managing principal of the Hennessee Group.

401(k)s

ICI Study Finds 401(k) Confidence, Apathy

A new survey by the Investment Company Institute finds that most Americans are still confident that their 401(k) plans can help them reach their retirement goals, but last year's 31% average drop in account balances has also highlighted the need for improvements to this popular, critical retirement vehicle. Improving education and financial literacy among investors, as well as boosting participation among African American and Hispanic minorities, should be a top priority of the nearly $12 trillion mutual fund industry, said Mellody Hobson, president of Ariel Investments.

Sales & Marketing

Wholesalers Adapt to Advisers' Changing Needs

The fundamentals of what advisers need from wholesalers are changing, and wholesalers have no choice but to adapt. Our research at kasina concludes that wholesalers should focus on serving advisers' needs for: *Better products and solutions for clients (advisers rate performance/risk/correlation at 7-8 on a 10 point scale of importance, well above other factors); *Improving their insights and context (news and market commentary trails only product info as a reason advisers visit asset manager websites); and, *Ideas and best practices to help build their businesses (the importance of which has jumped enormously in the last two years).

Editor's Desk

C- Grade is Nothing To Crow About for 401(k)s

The mutual fund industry should proudly celebrate Americans' 73% approval rating for 401(k)s, according to an Investment Company Institute report, "Enduring Confidence in the 401(k) System." In our book, a 73% rating equals a C- grade that, in fact, should be a wake-up call for the industry to do a far better job of equipping Americans to adequately prepare for a decent and healthy life in their old age.

Executive Moves

Executive Moves

Pioneer U.S. Sales Team Expands With Seven Hires Pioneer Investments has made seven additions to its U.S. sales team to better serve and continue the sales momentum among "larger clients, including broker/dealer wealth management platforms, independent financial advisory firms, defined contribution providers, banks, insurance firms" and defined contribution-investment only platforms, said Joseph Kringdon, executive vice president and head of U.S. retail distribution.