Hedge fund swindler routed out transparency first

In this latest installment of meltdown learning opportunities, Bernie Meldoff the hedge fund swindler crafts walls of secrecy within walls of complexity and covers them in a fog of phony expertise. If you want an investor to know why transparency is important, what better way than to revisit the brazen crimes of one of the [...]

Hedge fund manager arrested after confession: my fund just a “giant ponzi scheme”

Renowned trader and former chairman of the Nasdaq Stock Market Bernard Madoff has been arrested and will apparently plead guilty to fraud. (This is the Wall Street everyone has been talking about lately, up close and personal.)
Madoff Confessed $50 Billion Fraud Before FBI Arrest
Dec. 12 — Bernard Madoff confessed to employees this week that [...]

Tricked by Mr. Market: Bill Miller, manager, Value Trust: “Every decision to buy anything has been wrong.”

These losses have wiped away Value Trust’s years of market-beating performance. The fund is now among the worst-performing in its class for the last one-, three-, five- and 10-year periods, according to Morningstar.

Here is the type of learning opportunity that will become increasingly available as chronicles of the demise of stock pickers and market timers [...]

For the record: Mutual fund industry light 2.5 trillion

Mutual Funds Have Bled $2.5 Trillion Since May

Mutual funds had $9.5 trillion in assets as of Oct. 31, a full $2.5 trillion, or 21% less, than their year-to-date $12 trillion under management peak at the end of May, Lipper data shows. Since the beginning of the year, when mutual funds had $11.7 trillion under management, [...]

Good news for faithful corporate bond holders: Biggest returns in 5 years

Holding out in an internationally diversified, indexed-based portfolio with a robust stock to bond mix has resulted in nausea for many.
Company Bonds Give Investors Best Returns Since 2003
Nov. 28 (Bloomberg) — Investment-grade U.S. bonds returned 3.6 percent this month, after losing 7.4 percent in October, as Treasury yields declined on concern the recession is [...]

Mutual fund industry loses over 20% of assets under management

The mutual fund industry has never seen these kinds of losses before;, in additiion, the marketplace has never offered so many popular, transprent, and low-cost alternatives to mutual funds. These two novel factors make it reasonable to suppose that a good portion of this capital may never come back.
Mutual-fund firms rocked by asset decline
Stock and [...]

Meltdown takes weed-whacker to hedge funds

More contraction for hedge funds appears to be more or less permanent.
The Shrinking Hedge Fund Industry: From $2 Trillion to $1 Trillion By 2009?
Between 1990 and last year the industry’s assets under management grew almost 50-fold, to nearly $2 trillion. Now industry executives predict that assets could fall by 30-40%, as clients stampede for the [...]

Putnam sends six old horses to the glue factory, (and axes 12 money managers)

This news has a special resonance in light of our recent post of a report forecasting a move away from actively managed funds to passive strategies, as well the recent negative data on active fund management.
Putnam Investments to cut 47 jobs, merge funds
Putnam Investments said Monday it will cut 47 jobs, including 12 portfolio managers, [...]

Report on wealth management: “The game has changed.”

This press release is from Russell Reynolds talks about the future of wealth management from the perspective of leadership recruitment. I’ve sliced out the middle::
The Game has Changed
* The equity markets have been hammered. Given that most active equity portfolio managers failed to outperform the dismal markets, we expect to see a precipitous drop [...]

Wealth management in a post-meltdown world: 7 leaders from the nation’s top firms weigh in

Here are excerpts from Financial Planning Magazine’s collection of remarks from investment industry leaders on the current economic crisis.
I have interspersed commentary throughout from the point of view of wealth management communications.
Markets Under Siege
Anne Lester
Managing director and portfolio manager
JP Morgan Smart Retirement Funds
New York, N.Y.
What is holding up well for us is owning a little [...]