Fidelity Investments will close three of its most popular equity mutual funds to most investors as of April 3 and open a ``clone'' fund to replace one of them.
Affected are the $40.9 billion Growth & Income Fund, the $32.2 billion Fidelity Contrafund and the $11.6 billion Fidelity Low-Priced Stock Fund. The funds will remain open only to existing investors and new employees of defined contribution plan clients.
DC assets make up almost half the total assets of the Growth & Income Fund, about 42% of Contrafund and a little more than 25% of the Low-Priced Stock Fund as of Dec. 31, according to data from P&I's annual survey of the mutual funds most popular with DC clients.
Contrafund II will be opened April 1. Company officials maintained that the fund will have the same investment mandate as Contrafund.
Robert C. Pozen, president of Fidelity Management & Research, said the company also will likely register with the SEC a clone of its new Small Cap Stock Fund for distribution in the Fidelity Advisor series.
John Myers, chairman of GE Investments, Stamford, Conn., said he has trimmed the passively-managed U.S. equity component of General Electric Co.'s $39 billion pension fund to 6% from 15%.
Mr. Myers said he believes stock-picking is going to become more important in achieving performance at a time when more companies are announcing earnings shortfalls. He also boosted the U.S. bond allocation to about 23% of the plan, up from 14% last year, because of the more favorable inflation outlook.
California Public Employees' Retirement System, Sacramento, approved corporate governance principles for Japanese corporations that seek to lessen the influence of corporate insiders. The CalPERS principles say Japanese corporate boards should include truly independent directors. The principles also ask Japanese corporations to appoint truly independent auditors.
The $130 billion system's trustees also approved setting aside up to $350 million in new venture capital investments. CalPERS trustees intend to employ a third party to implement a venture capital investment program that will take the form of a partnership, limited liability company or joint venture. CalPERS' venture capital investments account for 9% of its $3.4 billion in alternative investments.
Reps. Earl Pomeroy, D-N.D., and Jim Kolbe, R-Ariz., today introduced legislation that would let American workers take retirement savings from job to job.
The bill would let workers move assets between 457, 403(b) and 401(k) plans and between IRAs and employer-sponsored plans. It would allow employees to roll over any after-tax contributions to their retirement plans when they switch jobs and speed up vesting of matching employer contributions.
New Jersey Manufacturers Insurance, West Trenton, N.J., is reviewing the investment options in its defined contribution plan. The $130 million plan has two options: equity and a GIC. Managers are MetLife, Mutual Life, New York Life, Prudential and Travelers. The in-house review should be finished by May 1, said Stanford Stevenson, treasurer.
