BOSTON -- Thomson Financial Services, the parent company of mutual fund researcher CDA/ Wiesenberger, acquired Viga Technologies, Tucson, Ariz. Viga produces retirement plan software products and will be folded into the CDA/Wiesenberger division of the company.
Terms of the deal were not disclosed.
CDA/Wiesenberger provides customized sales software for the mutual fund industry, as well as specialized performance research to the financial services industry. CDA/Wiesenberger has a fairly strong distribution base with more than 150,000 investment professionals and 200 major financial institutions on its client list.
Viga customizes defined contribution plan services software for vendors such as Prudential, Vanguard, Frank Russell, John Hancock, Pacific Mutual, Merrill Lynch and Bankers Trust. Products include PC-based and Internet tools for participant education and plan monitoring and enrollment. It also has developed individual retirement account evaluation tools for use by financial advisers.
Thomson officials said the newly combined entity will provide integrated, turnkey products for 401(k) plan management. With a more sponsor-friendly program, CDA/Wiesenberger now will be expanding its client base into the corporate 401(k) plan market, said company officials.
SunAmerica offers death benefit on funds
NEW YORK -- SunAmerica Asset Management Corp. pushed the industry envelope a little further with the introduction of an optional death benefit for its mutual funds, reportedly the first insurance wrapper of its kind.
The Asset Protection Plan guarantees that upon death, the value of an investor's account will equal the value of the original investment, plus an annual growth rate of 4% up to a maximum of 200%. If the real value of the account is less than this formula, the company will make up the difference. The cost of the coverage is 20 basis points per year and is paid quarterly through an automatic share redemption plan. There also is a one-time $25 setup fee. An investor must opt for the insurance plan within 30 days of investing in SunAmerica mutual funds or its Style Select Series portfolio. Existing shareholders will have a chance to add the coverage.
The program is available in 27 states.
Morningstar, Softbank form joint venture
CHICAGO -- In response to deregulation in Japan, Morningstar Inc. will establish a joint venture in the country with Tokyo-based Softbank Corp. The new company likely will be named Morningstar Japan K.K. and start out with a focus on mutual funds.
The initial target audience will be financial advisers and private individuals.
Based on data from the Investment Trust Association in Japan, Morningstar and Softbank will offer comprehensive fund information and programs in the United States, such as Principia Plus CD-ROM in a Japanese language version. Both American and Japanese mutual funds will be included in the database and will be available in several formats -- CD-ROM, via the Internet, PC-based software and hard copy. Data on other investment vehicles will be made available later.
FundsNetwork gets voice-recognition system
BOSTON -- Fidelity Investments introduced an automated speech-recognition system for its mutual fund supermarket, the FundsNetwork program. The speech-recognition system allows customers to purchase and redeem fund shares and to access performance data, fund descriptions and quotes by speaking the fund name into the phone. Customers also can verbally request prosectuses, directories and new account kits and information about FundsNetwork.
The voice system recognizes the names and variations of 3,400 funds in FundsNetwork and can cope with regional and foreign accents.
Socially responsible funds do well in '97
WASHINGTON -- 1997 was a very good year for environmentally and socially responsible mutual funds. Almost 63% of the funds tracked by the Social Investment Forum (with at least a two-year track record) were in the top rankings of both Lipper Analytical Services Inc. and Morningstar Inc. Investments in socially responsible mutual funds topped $1 trillion in 1997, an increase of 85% in two years.
Lipper gave 15 socially screened funds A or B rankings, compared with their peers, for the year ended Dec. 31. Morningstar awarded 12 screened funds four or five stars for the risk-adjusted performance based on a three-year analysis.
The two most popular indexes of socially responsible companies in the United States beat the Standard & Poor's 500 stock index last year. The Domini Social Index, a capitalization-weighted market index of 400 stocks screened using broad social and environmental criteria, returned 38.26% as of Dec. 31, compared with 33.23% for the S&P 500. The DSI also beat the S&P 500 on a three- and five-year annualized basis.
The Citizen's Index, a market-weighted portfolio of 300 U.S. companies, also beat the S&P for the year, returning 37.13%. Its 34.66% three-year annualized return beat the 31.13% returned by the S&P 500.
TIAA-CREF offers funds to general public
NEW YORK -- As expected by industry observers, the Teachers Insurance and Annuity Association -- College Retirement Equities Fund opened up its six mutual funds to investment by the general public.
The funds, which now have a total of about $100 million in them ($50 million of which is seed money from the company), have been available for about a year, but only offered to participants in TIAA-CREF administered retirement plans and their spouses.
The funds require a small minimum investment ($250) and carry low fees. The expense ratios range from 49 basis points for the International Equity Fund down to 29 basis points for the Money Market Fund. The other funds in the no-load family are the Growth Equity Fund, the Growth and Income Fund, the Bond Plus Fund and the Managed Allocation Fund.
Dennis Foley, vice president for product research and development, said the company expanded eligibility because the extended families of participants had expressed interest in investing in the funds. Despite opening its doors to outsiders, the company will spend 1998 marketing to its built-in client base of more than 2 million participants, rather than advertising heavily to the world outside academia and research.
Mr. Foley said he is exploring the possibility of offering the TIAA-CREF mutual funds within supermarkets, but is concerned the cost of offering the funds within such a format might add too much to the expenses of the fund. "Our goal is to raise assets within these funds while keeping expenses very low," said Mr. Foley.
The company has no immediate plans to make the funds available to 401(k) plan sponsors, Mr. Folley said.
* Alliance Capital Management LP, New York, named David Conine as executive vice president of Alliance Fund Distributors Inc., which distributes Alliance Capital's domestic mutual funds. He will serve as director of marketing, products and strategic relationships, and sit on Alliance's mutual funds executive committee.
Mr. Conine formerly was a first vice president/senior director-mutual funds marketing at Merrill Lynch.
* Rochelle Lamm Wallach, president of Strong Advisory Services, Menomonee Falls, Wis., has resigned in order to publish a series of marketing and sales books through her company, Lamm Wallach Communications Group.
Strong officials used Ms. Wallach's departure to reorganize retirement plan services in the company and did not directly replace her.
Separately, Strong introduced five new funds. The Strong Dow 30 Value Fund will be subadvised by Horizon Investment Services LLC, Hammond, Ind. Half of the assets of the concentrated portfolio will be maintained in price-weighted positions in each of the 30 stocks in the Dow Jones industrial average and the other half will be overweighted in various stocks in the DJIA based on various criteria.
The Strong Step 1 Money Fund is designed for beginning investors and includes an educational component to help new investors understand the markets. Jay Mueller is the portfolio manager.
The Strong Small Cap Value Fund is managed by Charles Rinaldi. The Strong Schafer Balanced Fund is subadvised by Schafer Capital Management Inc. New York.
The Strong Global High-Yield Bond Fund is managed by Shirish T. Malekar and John T. Bender. It will invest at least 80% of assets in medium and lower-quality fixed income on a global basis.
* T. Rowe Price Associates Inc., Baltimore, introduced two index funds. The Total Equity Market Index Fund will try to match the performance of the whole U.S. stock market, measured by the Wilshire 5000 index. The Extended Equity Market Index Fund will try to beat the Wilshire 4500 index. An existing fund, the Equity Index Fund, was renamed the Equity Index 500 Fund to avoid confusion. Kristen F. Culp and Richard T. Whitney are the co-managers of all three funds.
* Scudder Kemper Investments Inc., Chicago, now offers the Kemper U.S. Growth & Income Fund. The fund will invest primarily in U.S. stocks with above-average dividend yields and the potential for capital appreciation and rising dividends. The fund's team of managers will screen for domestic stocks with yields at least 20% higher than the yield of the S&P 500 Index and which are at the higher end of the historical relative yield range.
* J.P. Morgan & Co. Inc., New York, introduced the J.P. Morgan Disciplined Equity Fund, which will be available on a no-transaction-fee basis through mutual fund supermarkets. The enhanced index fund will seek to outperform the S&P 500 by excluding the companies that are most overvalued within each industry sector. Tim Devlin is the fund's portfolio manager and will apply the same strategy used in an institutional version of the fund, which started in 1997 and now has $186 million under management.
* The Berger Funds, Denver, added the Berger Select Fund, managed by Patrick Adams. This "best of Berger" concentrated fund will invest in between 20 and 30 high quality growth companies.
The Berger Mid Cap Growth Fund is managed by Amy Seiner and will focus on companies with market capitalization between $1 billion and $5 billion.
* Montgomery Asset Management, San Francisco, launched the Montgomery Global Long Short Fund, a load fund that behaves like a retail version of a hedge fund, by going long and short to enhance performance relative to the indexes, according to Nancy Kukacka, a portfolio manager and principal at Montgomery Asset Management. The fund, which is being distributed through Merrill Lynch & Co., has above-average risk because of its ability to short stocks and its use of derivatives, she said.
* Columbus Circle Investors, Stamford, Conn., introduced a retail version of the $150 million institutional international growth fund. The new fund, the PIMCO International Growth Fund, is being distributed by its parent company, Pacific Investment Management Co., Newport Beach, Calif. The new fund is managed by Andrew H. Jacobson, who also manages the institutional version of the fund, which had a 43%return in 1997.
* Polaris Capital Management, Boston, was hired as a subadviser for an institutional international equity mutual fund that will be offered by Freedom Capital Management Corp., Boston. The fund is now in registration with the Securities and Exchange Commission.
Bernard R. Horn Jr. will manage the fund using a pure value strategy, investing in companies with the most undervalued cash flow or assets, regardless of industry or location. Mr. Horn's returns for 1997 using this style were 10.3% compared with 2.1% for the Morgan Stanley Capital International Europe Australasia Far East index and 5.1% for the Lipper cumulative average for the year of all international equity funds.
* Renaissance Capital Corp., Greenwich, Conn., launched one of the first mutual funds that will invest almost entirely in initial public offerings. The IPO Plus Aftermarket Fund will give smaller investors a chance to invest in the kinds of IPOs generally open only to large investors. At least 65% of the fund's assets will be invested directly in IPOs and in after-market shares of recent IPOs. The after-market investments are restricted to companies with limited public ownership, a short operating history or companies not well-known in the United States.
Renaissance's main business is the provision of IPO research to institutional investors.
* John Nuveen & Co., Chicago, introduced the Nuveen Rittenhouse Growth Fund, the first fund to be managed by Nuveen's subsidiary, Rittenhouse Financial Services, Radnor, Pa. Nuveen acquired Rittenhouse in 1997. The fund will invest in blue-chip companies with global market presence in their respective industries.
* Third Avenue Trust, New York, filed a registration statement with the Securities and Exchange Commission seeking approval for the introduction of the Third Avenue High Yield Fund. At least 65% of the assets will be invested in a portfolio of below-investment-grade fixed income. Margaret D. Patel is the fund's manager.
* Chase Investment Counsel Corp., Charlottesville, Va., has long wanted to provide individual investors with low minimum investments with a way to access its institutional growth investment style. The introduction of its Chase Growth Fund solves the problem, with a $2,000 minimum. The fund's strategy is multicap, growth at a reasonable price.
* CypressTree Investments, Boston, added the Emerging Growth Fund to its North American Funds family. Warburg Pincus Asset Management, New York, is the subadviser and will look for smaller companies with market capitalizations of less than $1 billion, that are beyond the startup phase and that have begun to show positive, above-average earnings growth.
* Matthews International Capital Management, San Francisco, introduced the Dragon Century Fund, another in its series of mutual funds focused on Asian investments. Paul Matthews and Mark Headley are the fund's co-managers and are investing in Chinese companies listed on the two mainland stock exchanges in Shanghai and Shenzhen and also on the Hong Kong stock market.
Vineeta Anand contributed to this column. Christine Williamson can be reached by email at [email protected]