WASHINGTON - Retirement plans held 35% of all U.S. mutual fund assets at the end of 1996, according to a study by the Investment Company Institute.
Retirement plan investments in mutual funds grew by $245 billion or 25% last year to total $1.2 trillion. Mutual fund assets held by retirement plans at year end 1995 were $997 billion.
About two-thirds or $160 billion of 1996's increase in assets resulted from asset appreciation, reinvestment of interest, dividends and capital gains. Some growth was from mutual funds reporting retirement plan assets for the first time in 1996. The balance of the growth, $85 billion, came from net new investment into mutual funds through retirement plan channels. About 16% of total U.S. retirement assets of $7.9 trillion were invested in mutual funds on Dec. 31, 1996. Mutual fund retirement assets were divided nearly equally between IRAs and employer-sponsored retirement plans, the ICI study found.
Among employer-sponsored plans, assets invested in mutual funds were $610 million. About $334 million of that was held from 401(k) plans, $137 billion from 403(b) plans and $106 billion from in other forms of defined contribution plans.
Fund draws $200 million
NEWARK, N.J. - The Prudential Small-Cap Quantum Fund, launched Sept. 25, attracted more than $200 million in its first three weeks.
The fund is managed quantitatively by John Leib, a portfolio manager at Prudential Investments, a unit of the Prudential Insurance Co. of America.
Mr. Leib uses the proprietary QV quantitative model for stock selection, developed by Prudential Securities.
The small-cap QV Model is designed to rank approximately 1,400 stocks according to eight fundamental factors, resulting in ratings ranging from QV1 (best) to QV5 (worst). Mr. Leib applies additional analysis to build a diversified portfolio of up to 200 attractively ranked small-cap stocks that are expected to outperform the S&P 600, while attempting to control risk.
At least every three months, Leib re-evaluates the stocks and adjusts the fund's holdings as necessary. Sector weightings are kept within 5% of the S&P 600 weighting. Up to 20% of the fund's portfolio may be invested outside the QV optimization process. Mr. Leib also manages Prudential's PRIFORM portfolios, which have more than $2.7 billion in institutional assets under management.
Internet updates offered
FORT LAUDERDALE, Fla. - The Mutual Fund Channel is a new, Internet-based service that uses "push" technology which sends electronic updates automatically to mutual fund shareholders with personalized, daily news on the performance of as many as 20 funds of their choice.
The Capital Internet Group provides the service, which offers quotes, historical data, market analysis and news on nearly 6,000 mutual funds. Later updates of the service will add information on 11,500 closed-end funds, offshore mutual funds and annuities.
Performance and ranking information is provided by Lipper Analytical Services Inc., New York.
The Mutual Fund Channel is free. Enabling software is available at the company's Web site: www.mutual-fundchannel.com.
Calm in market storm
SAN FRANCISCO - Individual investors appeared to be remaining calm amid extreme market volatility, according to a survey of customers conducted on the evening of Oct. 28 by the Charles Schwab Corp.
Only one in eight investors surveyed (12%) traded at all Oct. 27 or 28. Nine in 10 investors (92%) said they expected a market correction and seven in 10 (69%) said market volatility would have only a minor or no impact on their near-term investment strategy.
The majority (63%) of Schwab's mutual fund customers said they intend to maintain their current mutual fund allocations. Only 3% of those surveyed said they plan to make major changes and 33% plan minor changes. The majority of investors planning to make adjustments (64%) said they intend to buy more funds. Less than one-fifth of those reallocating assets plan to move into cash or bond mutual funds.
Roiter to counsel Fidelity
BOSTON - Eric D. Roiter will become vice president and general counsel of Fidelity Management & Research Co. Nov. 17. Mr. Roiter will succeed Arthur Loring, who will retire Jan. 1 as senior vice president and general counsel after 25 years with Fidelity.
Mr. Roiter is now a partner at the law firm Debevoise & Plimpton, where his practice is focused on financial services, securities, banking and insurance. He also was an assistant general counsel at the Securities and Exchange Commission.
2 team up for analysis
CHICAGO - Ibbotson Associates Inc. and CDA/Wiesenberger, Rockville, Md., are joining forces in offering mutual fund analysis and education.
Ibbotson's Fund Strategist returns-based style analysis software will include CDA/Wiesenberger data beginning in January. CDA/Wiesenberger will include Ibbotson's style analysis in its fund sales software. The two firms also will collaborate on Ibbotson's mutual fund investing seminars.
Paul Barr contributed to this column. Christine Williamson may be reached by e-mail at [email protected]