State Street appears to have been particularly attracted by Investors Financial's ties to the hedge fund and mutual fund industries.
Looking at the investment world, most hedge fund and mutual fund managers could point to index-crushing returns if the crystal-clear notion of hindsight were an input.
Hedge fund managers, mutual fund PMs and retail investors alike are afraid of missing out, and they are casting their hooks into the market.
Then, just about the time a logical trader might have thought the pullback had run its course, we were treated to scenes of FBI agents raiding hedge fund offices and mutual fund familes.
Before the new rules a mutual fund or hedge fund that wanted to dump 100, 000 shares of Microsoft (nasdaq: MSFT - news - people ) quickly could, for example, bypass the New York Stock Exchange and sell them all at once on a different exchange if it saw an open order to buy 100, 000 shares--even if the offer price on the NYSE was a nickel higher.
In addition, hedge fund managers, unlike mutual fund managers, aren't judged by how well they perform against an index but by how strong their profits are in a given year.
He says the relatively high costs of hedge funds versus mutual funds--hedge fund managers typically charge a 1% to 2% fee plus 20% or more of any profits for the fund each year--don't make them the best option for most individual investors.
All these have a survivorship bias: investments mentioned at dinner parties, stocks charted in Value Line, entrepreneurs featured in FORBES, stock market histories (does your data set include the --100% compound annual return on Russia over the past century?), available hedge fund performance numbers and every mutual fund ad.
The scandal was triggered when New York Attorney General Eliot Spitzer revealed a scheme under which Nations Funds, advised by Banc of America Capital Management, a unit of Bank of America (nyse: BAC - news - people ), permitted hedge fund Canary Capital to trade mutual fund shares at prices that had already been set at the day's close.
The bosses of funds benefited either indirectly, because the funds were given more money to manage (and thus more fees), or directly, because they invested in the hedge fund that was trading against the mutual fund.
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Of course, hedge-fund and mutual-fund managers can use different strategies to try to beat the market, so the findings of the UC Irvine and Fed researchers might not translate to mutual funds.
The Journal reported that federal authorities are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the U.S., and that some charges could be brought by year-end.
Financial advisors have the advantage of getting to know their clients well, unlike most mutual fund and hedge fund managers.
Besides, Guy sees the mutual fund and hedge funds as intellectual complements.
Interestingly, the SEC just announced the increasing use of alternative and hedge fund strategies by mutual funds, ETFs and variable annuities as a new and emerging risk.
In a new paper, Jingzhi Huang of Penn State University and Ying Wang of SUNY-Albany examined the performance of 73 hedge fund-like mutual funds during the 2007 financial crisis.
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In the hedge-fund world and the U.S. mutual fund business, star managers like Peter Lynch, George Soros and Julian Robertson became household names on the heels of their impressive investment performances.
Sharp managers join nimble hedge funds, not mutual-fund behemoths.
First, new 13F filings filed with the SEC reveal a number of mutual funds and hedge fund managers trimmed back their AAPL holdings and short interest that jumped considerably during the last two weeks of April per data from NASDAQ.
U.S. stocks still ended the day with sharp losses, but a last-hour rally cut the deficit in the blue-chip barometer by more than half as professional investors seem to have stepped in and picked up shares dumped by unhappy mutual- and hedge-fund shareholders.
Before the new rules a mutual fund or hedge fund that wanted to dump 100, 000 shares of Microsoft quickly could, for example, bypass the New York Stock Exchange and sell them all at once on a different exchange if it saw an open order to buy 100, 000 shares--even if the offer price on the NYSE was a nickel higher.
To satisfy demand, asset managers have been busy rolling out new alternative products specifically designed for non-accredited investors hedge funds and managed futures inside mutual fund wrappers, for instance.
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The SEC should also push harder to lower fund fees, improve disclosure and insist on overseeing hedge funds, the customers at the root of the mutual fund trading scandal, Bogle said.
But what the data do not do is compare hedge fund performance with that of mutual funds--those comparatively boring investment pools for ordinary mortals.
Then, too, the story has passed from the gold gurus like Frank Giustra, and the central banks of China, India and Russia, among others, to the hedge fund giants like George Soros and John Paulson, among others, to mutual fund groups like US Global Resources to pension funds, wealthy families.
We need systems that make positions transparent in a single database and then tag them to exposures in a mutual fund, bonds or a hedge fund so if you want to see the accounting position you can get it across different types of holdings.
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Shares in Washington Mutual jumped late Thursday after a British hedge fund, which has shown interest in the troubled U.S. lender before, said it had acquired a 6.0% stake.
There have been two big investigations since then, one involving hedge funds being allowed to market-time trades in mutual fund shares, and the other involving insider trading in PIPEs, or public investments in private equity.
Its proposals would also help mutual fund companies fend off growing competition from exchange-traded and hedge funds.
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