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Governance Section

News

Hedge Funds Expect SEC to Revisit Registration

Post-Madoff, funds are also rethinking fees, transparency.

Evergreen Settles With SEC for $40 Million

The Commission charged the company with inflating the value of mortgage-backed securities held by one of its mutual funds.

Fund Manager Blasts Industry for Failing Investors in 2008

FPA Capital Fund manager says mutual funds’ investment discipline must be far more flexible.

Citi Offering Free Governance Portal for Clients

The mutual fund service provider cites firms’ need to control costs.

Financial Planners Rethink Monte Carlo Simulation Tools

While they take thousands of investment scenarios into account, last year threw them for a loop.

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Articles

Providers Look for Auto Rollover Solutions to Include Job Changers

WASHINGTON - With 47% of 401(k) plans now using automatic enrollment, the programs have helped get millions of new workers enrolled to start saving early for retirement, but industry experts say the automatic nature of these plans needs to extend to helping 'hands-off' investors when they change jobs. When an employee leaves a job, he or she can choose to roll over their money into an individual retirement account (IRA), take a lump-sum payment minus taxes and a 10% penalty, or do nothing and leave their money in the 401(k). Sir Isaac Newton would predict the latter.

Securities Lending to Begin Letting the Sunshine In

NEW YORK - Investors tend to stay quiet about financial products they don't understand as long as the profits keep coming in, but when the tide goes out and profits fall, they want answers. After several profitable decades of operating largely in the shadows, securities lending is undergoing some major changes-along with virtually every other financial market in the world-that will drastically increase price transparency, and those markets and instruments that can adapt to these changes will survive and prosper, lending experts say.

Flexibilty Key as Firms Reevaluate Risk Structure

Before the bottom fell out of the markets last year, most asset management firms thought they already had robust risk management processes in place. Now they're not so sure. As firms rethink risk, experts say they should focus more on having a flexible program in place rather than on planning for every possible contingency.

Give Fund Managers Back The Power to Pick Stocks And Spot Macro Trends

Finally, insiders launched candid criticism at the mutual fund industry last week, to help it respond sensibly to the economic meltdown and reposition itself to regain investor trust. Foremost among this advice is giving portfolio managers back the power to pick stocks and run with their investment ideas, instead of being so tightly tethered to an investment class and market capitalization. Further, fund managers should step away from their style boxes and take a look at bigger economic trends. The signs were all there, beginning with the 2007 demise of Bear Stearns' credit derivatives-laden hedge funds. Anyone could have foreseen the accelerating problems of the credit and capital markets, mutual fund managers among them. Had more of them moved into cash or safe investments, they would have avoided the across-the-board losses in 2008.

2008 a Watershed Year For Some Advisers

From recommending different products to rethinking their risk management strategy, some financial advisers say they have changed their approach in the wake of last year's market slump. Indeed, many retail investors remain on the sidelines of the stock market, with assets in equity funds only half of what they were in late 2007 before the economic crisis began and the market lost 56% of its value. 'We have to be proactive as far as a new strategy, and that strategy certainly isn't, 'Hang in there,'' said Dennis Reeve, PrimeVest Financial Services' investment program manager at Lake City Bank in Warsaw, Ind.

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