SANTA ROSA, Calif. - Individual investors probably were not wholly responsible for breaking the record for stock and bond mutual fund new cash flows in January, suggested mutual fund trackers, Mutual Fund Trim Tabs.
A dazzling monthly high of $32 billion in cash in-flows to stock and bond mutual funds was reported in January by the Investment Company Institute, Washington.
Analysis from Mutual Fund Trim Tabs made a connection between the huge inflow and the unusually high number of mutual fund introductions that month.
Trim Tabs' interpretation of the monthly ICI flow numbers was that the abnormally high cash flow probably was due to the conversion of bank trust funds to mutual funds. January saw the introduction of 65 mutual funds compared with the average of 45 funds introduced monthly in 1996. Trim Tabs calculated that if just 20 of those new funds were trust fund conversions and were of the average size for an established fund ($345 million), the resulting impact on the market would be about $7 billion, accounting for the difference between the $27 billion the ICI predicted would come from individual investors and the $32 billion stock and bond funds actually received.
Delaware adds 2 funds
PHILADELPHIA - The Delaware Group is using an affiliated company, Vantage Global Advisors Inc., to manage two new quantitative equity funds, the Delaware Quantum Fund and the Delaware Blue Chip Fund.
The Delaware Quantum Fund offers investment in equities that pass certain "socially responsible" screening criteria. The Delaware Blue Chip Fund invests in the stocks of companies with $2.5 billion or more in market capitalization.
Both new funds use a proprietary computer model to analyze the fundamental characteristics of more than 1,200 companies daily. The common investment criteria for the funds is a combination of growth and value characteristics.
The Quantum fund also avoids investment in companies with poor workplace and environmental practices or companies that are involved in the "sin" industries, such as tobacco, alcohol and gambling equipment manufacturers.
Hancock to close bank fund
BOSTON - John Hancock Funds will close its $4.8 billion Regional Bank Fund to new investors on March 12 or when fund assets reach $5.5 billion, whichever happens first. Existing shareholders may continue to invest in the fund.
The fund uses a value investment style and focuses on small to midsized regional banks. A recent surge in new investments has pushed the fund's cash position to 20%, double the 10% cash allocation of the fund's investment mandate.
The fund's portfolio manager, James K. Schmidt, said in a statement the fund's ability to invest lots of cash is limited by its investment mandate and he doesn't want to deviate from the style by investing in haste in larger bank stocks.
Hancock might reopen the bank fund at a later date when the cash position is at a more manageable level.
Eaton Vance picks 'markets'
BOSTON - Eaton Vance Distributors Inc. has begun to use mutual fund supermarkets as a distribution channel for its family of more than 60 mutual funds.
The Traditional funds family is now available to fee-based financial advisers through six no-transaction-fee programs: Charles Schwab & Co. Inc.'s Institutional OneSource; Fidelity Investment Advisor Group Funds Network; Jack White & Co.'s Advisor Services Division NoFee Network; DATALynx NTF Program; Trust Company of America Fund Source; and Waterhouse Securities Investment Advisor Services Mutual FundConnection.
The funds are available at net asset value without a customary front-end sales charge and without transaction fees.
Wider audience for AARP funds
NEW YORK - Scudder, Stevens & Clark Inc. is making the proprietary funds it manages for the American Association of Retired Persons available to its defined contribution plan clients.
The AARP Investment Program from Scudder is a family of 15 conservatively managed mutual funds for investors planning for and living in retirement.
The fund family offers funds covering the risk spectrum and designed to provide competitive returns at a lower risk by seeking less share price fluctuation.
Fund launches and updates
Munder Capital Management, Birmingham, Mich., launched a global health care mutual fund, the Munder Framlington Healthcare Fund. The fund's portfolio manager is Antony Milford, who will direct investments from London, but trading and fund accounting in the dollar-denominated fund will be managed by Munder in the United States. The fund will mirror the investments of a health care unit trust managed by Munder's British affiliate, the Framlington Group PLC, London. Both the U.S.- and the U.K.-based funds invest in about 150 health care stocks in 12 countries and will capitalize on expected developments in the private health care sector in Europe and Asia.
Munder and Framlington jointly manage two other funds with a similar structure - the International Growth and Emerging Markets funds. Munder last year acquired a 49% interest in Framlington.
J.P. Morgan Investment Management, New York, introduced three mutual funds: JPM Institutional Disciplined Equity fund, a large-cap fund designed to outperform the market but with indexlike risk; a tax-efficient version of that fund, called the JPM Pierpont Tax Aware Disciplined Equity fund; and the JPM Pierpont Tax Aware Equity fund, a tax-efficient version of the JPM Institutional Selected U.S. Equity and JPM Pierpont Equity funds.
JPM Institutional and JPM Pierpont funds are no-load, but the institutional funds have higher initial minimums.
Tax efficient funds are managed to limit capital gains taxes.
Fifth Third Investment Advisors, Cincinnati, added three mutual funds to its Fountain Square series. The Equity Income Fund is managed by John Schmitz. Also added were the Bond Fund for Income and Municipal Bond Fund, both managed by Roberta Tucker.
Zurich Kemper Investments Inc. Chicago, added the Kemper Aggressive Growth Fund, managed by Patrick Adams, who also manages the Kemper Growth Fund.
John Hancock Funds, Boston, introduced a sector fund, the Financial Industries Fund, a global growth fund investing in brokerage, insurance, asset management, bank and financial services companies. Co-managers are James Schmidt and Thomas Finucane.
GE Investments, Stamford, Conn., increased equity fund offerings with the launch of the GE Premier Growth Equity Fund. David Carlson is the portfolio manager.
Janus Funds, Denver, introduced the Janus Special Situations Fund, a domestic aggressive growth fund. David Decker, the manager, focuses more on cash flow relative to a company's share price than near-term earnings growth.
Fidelity Investments, Boston, expanded its sector fund offerings by two with the introduction of the Select Cyclical Industries Portfolio and the Select Natural Resources Portfolio.
Fidelity now offers 37 different Select portfolios that invest in seven different industry categories.
Albert Ruback, portfolio manager of the Cyclical Industries fund, will invest primarily in companies engaged in research, development, manufacturing and distribution services related to cyclical industries. Mr. Ruback also is the portfolio manager of the Advisor Cyclical Industries fund.
Larry Rakers will manage the Select Natural Resources Fund. He also manages the Select Paper and Forest Products Portfolio, the Select Energy Portfolio and the Fidelity Advisor natural Resources Fund.
Putnam Investments, Boston, introduced the High Yield Total Return Fund, which emphasizes both high current income and capital appreciation.
Both emerging markets securities and convertibles will be used by the investment team, led by Jin Ho.
Online enhancements
Lipper Analytical Services Inc., New York, is now marketing customized versions of its mutual fund performance data and analysis to providers of financial World Wide Web sites. The service provides daily electronic updates to a variety of Internet sites, including general news and business publications.
In addition to mutual fund performance data, Lipper will customize analysis, provide fund information and interactive analytical tools and will offer commentary.
Lipper provides data to the Web sites of the Wall Street Journal Interactive, CNNfn, The Street.com, Quote.com and Forbes. USA Today and SmartMoney Interactive will soon be offering Lipper analysis.
