Philadelphia Municipal Pension Fund, with $2.8 billion in assets, terminated one manager, placed three others on probation and kept two firms on probation.
George D. Bjurman, which managed $47.3 million in U.S. small-cap stocks, was terminated because of portfolio volatility, said Joseph J. Herkness, executive director. Mercer is assisting in a search for a replacement.
Managers placed on probation were: Sturdivant, which manages about $100 million in U.S. large-cap stocks; Dreyfus Investment Advisors, $77 million in U.S. small-cap equities; and Smith, Graham, $143.3 million in intermediate bonds. Placed on watch was Morgan Grenfell, which runs $123.8 million in international bonds. The fund also is continuing to keep on probation J. & W. Seligman, which runs about $36 million in U.S. small-cap stocks, and Delaware Investment Advisors, which runs about $65 million in U.S. large-cap stocks.
Long duration bond portfolios were the top performers in PIPER's managed accounts for the quarter and year ended June 30. The median long duration bond account returned 5% for the quarter and 9.7% for the year. The Salomon Broad Bond Index returned 3.6% for the quarter and 8.2% for the year.
Limited duration fared the worst: The median limited duration portfolio returned 2.2% for the quarter and 6.8% for the year.
Japanese equity portfolios topped the international rankings in PIPER's managed accounts for the quarter, and were at the bottom for the year. The median Japanese equity portfolio returned 22.3% for the quarter, vs. 13.1% for the MSCI EAFE Index. For the year, Japan equity returned -7.83, vs. 13.2% for the index.
The median European equity account lead for the year, returning 27.7%.
The worst-performing median international equity account for the quarter was the Pacific Basin excluding Japan, which returned 7.4%.
Domestic equity mutual fund cash inflows for the month of July set all-time records for the traditionally slow month, according to Mutual Fund Trim Tabs.
Inflows into U.S. equity mutual funds surpassed $14 billion, well ahead of the previous July record, set in 1995, of $12.2 billion. MFTT attributes much of the strong flows to the surging performance of the U.S. stock market.
CFOS continue to be bullish on the overall economy, according to a recent Financial Executives Institute/Duke-Fuqua School of Business Corporate Business Outlook Survey. Almost 84% of the 450 CFOs polled expect higher earnings in the next four quarters and only 50% foresee higher interest rates in the period.
The survey's Business Strength Index, which combines earnings, capital investment, research and development, M&A activity and employment climbed to a near-record high of 43, up from 37 last quarter.
Polling was conducted between July 1 and 8 via a questionnaire faxed to the 2,500 CFOs who are members of the Financial Executives Institute.
NCR Corp., Dayton, Ohio, placed $5 million in a large-cap growth equity portfolio with Yacktman Asset Management on a trial basis, said Norm Pao, assistant treasurer.
If the board of the $2.2 billion defined benefit plan decides to hire Yacktman permanently, the firm probably will manage $25 million. Officials will make a decision by the end of the third quarter.
Illinois Municipal Retirement Fund, Oak Brook, Ill., hired Cozad/Westchester to manage $75 million in a permanent crop farmland separate account. The funding for the new allocation will come from cash. The assignment will be part of the $11.1 billion fund's alternative investment allocation. Institutional Property Consultants assisted.
Jacobs Engineering Group, Pasadena, Calif., added two new funds and dropped another in its $259 million 401(k) plan. AIM International Equity Fund and the Mutual Beacon Fund from Heine Securities were added to the plan, while committee members decided to drop the SEI International Fund, said Diane Hoffman, manager, compensation benefits/corporate human resources.
Charles S. Stephens, director of investments and treasurer of the United Mine Workers of America Health and Retirement Funds, Washington, is retiring. The fund, with about $7 billion in assets, hired Isaacson, Miller, an executive search firm, to look for his replacement. Mr. Stephens could not be reached for comment, but David Bellshaw, a vice president at Isaacson, Miller, said the firm hopes to recommend a replacement sometime in the fall.
Diana P. Herrmann succeeded her father, Lacy B. Herrmann, as president and COO of their family-owned firm, Aquila Management. Ms. Herrmann was most recently executive vice president of the company. Mr. Herrmann will retain his positions as chairman and CEO