SANTA ROSA, Calif. -- Americans seem to be getting richer all the time.
Liquidity TrimTabs, a specialist in market cash flows, estimates that weekly net cash flows into retail mutual funds has been $9 billion throughout 1998.
Americans need to decide each and every week what to do with their excess cash -- which Liquidity TrimTabs' research shows to be about $6.5 billion generated by higher incomes and about $2.5 billion in liquidity freed up by the refinancing of home mortgages.
The number is up from $6.2 billion in new cash per week in 1997, $5.6 billion in 1996 and $3.9 billion in 1995.
Rally sparks reopening of small-cap funds
The Oct. 9 rally that sent small-cap stocks zooming up, albeit from rock bottom, was a catalyst for mutual fund managers to reopen small-cap and aggressive growth funds they had closed to new investors over the past few years, when cash flows to the sector had been too high to cope with.
Some of the newly reopened funds are:
* The AIM Aggressive Growth Fund, which was to opened to new investors on Nov. 16. The fund invests in small-cap companies with above-average earnings growth and was closed to new investors on June 5, 1997.
The fund's adviser is A I M Advisors Inc., Houston, a subsidiary of A I M Capital Management. The portfolio manager is Bob Kippes, senior portfolio manager and head of AIM's small-cap and midcap growth management team.
The fund was initially closed to new investors on May 2, 1994. It was reopened in July 1995 and accepted $1 billion in assets, an industry record for a two-day period. The Fund reopened again June 4, 1997, and took in $700 million in two days before once again closing to new investors.
* The Scudder Micro Cap Fund, which swung open the doors on Nov. 6. The fund was closed to new investors on Sept. 22, 1997, after having reached $100 million, Scudder officials said in a statement.
Phil Fortuna, a managing director of Scudder Kemper Investments Inc., Boston, co-lead portfolio manager for the Scudder Micro Cap Fund, said, "We . . . believe that the micro-cap category offers compelling long-term value and that reopening the fund will give us -- and our investors -- the chance to take advantage of the many attractive investment opportunities available in this category."
The fund will close again when net assets reach $150 million.
* The Small-Cap Value Fund run by T. Rowe Price Associates Inc., Baltimore, reopened to new investors on Nov. 5 for the first time since March 1, 1996. The now-$1.58 billion fund was closed because of high cash flows when it reached $1 billion under management.
The reopening will allow managers to take advantage of attractive valuations of small-cap companies, said Preston G. Athey, chairman of the fund's investment advisory committee.
* John Hancock Regional Bank Fund was reopened to new investors on Nov. 4. The $5.8 billion fund, run by John Hancock Funds, Boston, invests in small to midsized bank stocks and has been closed since March 12, 1997, when cash levels reached 20%.
The cash position is now 7% and recent volatility in the financial services market has brought the stock prices of regional banks down into the range of "unusually good value," said James K. Schmidt, leader of the fund's investment team.
HighMark opens small-cap value fund
LOS ANGELES -- HighMark Capital Management Inc. jumped onto the small-cap bandwagon with the late October opening of the HighMark Small Cap Value Fund. The fund's mandate permits investment in non-U.S. companies. Brandes International Partners LP, San Diego, will manage the international portion of the mutual fund.
The domestic portion of the fund is managed by Richard Earnest and Elizabeth Pearce. Mr. Earnest also manages the HighMark Value Momentum Fund.
Oppenheimer to subadvise Security Benefit fund
TOPEKA, Kan. -- Security Benefit Group hired Oppenheimer Funds Inc. to manage more than $325 million as a subadviser for its Security Global Fund and Worldwide Equity Series funds.
This is Oppenheimer's first assignment as a subadviser to another company's mutual funds.
The global funds are invested primarily in large-cap stocks with heavy weightings toward the United States and Europe. Small positions are held in Asia and Latin America. Holdings in these regions will be increased, Security Benefit officials said. Oppenheimer's Bill Wilby will lead a team of seven in managing the funds, which had been managed by Lexington Management Corp., Saddle Brook, N.J.
Federated starts ultrashort bond fund
PITTSBURGH -- Federated Investors Inc. launched an ultrashort bond fund designed to attain higher returns than money market funds generally offer, but with greater principal fluctuation and risk.
The fund, containing bonds with average durations of less than one year, is managed by Randall S. Bauer, vice president and senior portfolio manager; Paige M. Wilhelm, vice president and co-portfolio manager; and Robert E. Cauley, assistant vice president and co-portfolio manager.
The Federated Ultrashort Bond Fund increases investors' exposure to higher- and lower-rated corporate bonds and a variety of debt securities, including government bonds, mortgages, asset-backed bonds and foreign-currency denominated debt securities. The fund could function as a "surrogate for a GIC" option in either a defined benefit or defined contribution plan, Mr. Bauer said.
Currently, about 70% of the bonds are AAA rated. While the fund could have as much as 25% below investment-grade debt, Mr. Bauer said he doesn't foresee it containing more than 7% noninvestment-grade bonds. It will also use futures, options and swaps to maintain its ultrashort duration.
11 BEA funds join Warburg Pincus family
NEW YORK -- Warburg Pincus Funds will merge 11 BEA funds into the Warburg Pincus fund family as part of its retail mutual fund joint venture with Credit Suisse Asset Management. Shareholders have approved the change, which will expand Warburg Pincus' retail fund family to 34 no load funds.
The transaction is atypical because Warburg Pincus is merging the BEA Advisor funds into new retail funds it created for the purpose while maintaining the BEA Institutional share class to co-exist alongside the retail shares.
The mergers will allow Warburg Pincus to retain the long-term performance record of the BEA funds for the new funds, officials said in a statement.
INVESCO Funds Group adds two funds
DENVER -- INVESCO Funds Group added the INVESCO Endeavor Fund and the INVESCO International Blue Chip Fund.
The INVESCO Endeavor Fund will aggressively pursue stocks with strong growth prospects across capitalization tiers. Tim Miller is the lead manager.
The INVESCO International Blue Chip Fund will focus on well-established, large-cap foreign companies with the potential for above-average long-term growth. Lindsey Davidson is the lead portfolio manager and, with his investment team, will employ the same strategy used to manage $5.6 billion in institutional separate account assets in this asset class.
Newport creates Japan subsidiary
TOKYO -- Newport Pacific Management Inc., San Francisco, created Liberty Financial Japan Ltd., Tokyo, which will distribute the investment products and services offered by Liberty Financial Companies' subsidiaries throughout Japan.
The first product offering will be a new class of shares of the U.S. multisector bond fund, the Colonial Strategic Income Fund.
David R. Smith is president of Liberty Financial Japan; he is also a portfolio manager for Japanese equity investments for Newport Pacific Management. Liberty Financial Japan's resident manager is Kusaburo Ohyama, managing director. He headed the international division of Tokyo Securities before joining Liberty Financial Japan.
Colonial offers value fund
BOSTON -- , Colonial Management Associates Inc., a subsidiary of Liberty Financial, opened the Colonial Value Fund, managed by new recruit Scott B. Schermerhorn, who joined Colonial from Federated Investors, Pittsburgh, in October. The fund is the first to be offered by Colonial using a "traditional value" style.
First Data to offer online services for Princor
WESTBOROUGH, Mass. -- First Data Investor Services Group Inc. was hired by Princor, Des Moines, Iowa, to provide online mutual fund shareholder services for the Principal Mutual Funds. First Data will provide online mutual fund account access for 410,000 shareholders who have invested $5 billion in Principal's mutual fund.
First Chicago outsources mutual fund accounting
LITTLE FALLS, N.J. -- First Chicago NBD Corp., Chicago, outsourced mutual fund accounting for its Pegasus family of funds to BISYS Fund Services, pending the bank's merger with Banc One Corp. Post-merger, the combined bank entity will have more than $50 billion under management.
Arleen Jacobius contributed to this column.
Christine Williamson can be reached at [email protected]
