The Markets July 14, 2009

Q2: Two-Year Best for Mutual Funds

U.S. stock and bond mutual funds generated the best quarter of long-term fund inflows in more than two years during the second quarter of 2009, according to Strategic Insight.
Reported by

In 2009’s second quarter, investors put $136 billion into bond and stock mutual funds, and adding net inflows to exchange-traded funds (ETFs) brought second-quarter 2009 inflows to more than $150 billion, according to a press release. Those figures, based on Strategic Insight and Investment Company Institute data, marked the best quarter for long-term funds since the first quarter of 2007, when stock and bonds drew a combined nearly $150 billion.

U.S. bond funds were the brighter spot of the near $11 trillion U.S. mutual fund industry. In the second quarter, bond funds drew net inflows of nearly $90 billion, most into taxable bond funds as investors, emboldened by the stock market recovery but still highly risk-averse, shifted assets away from near-zero yielding cash instruments, the press release said.

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In the second quarter, equity funds took in an estimated $47 billion in net new flows. Investors put about one-third of equity-fund flows into international stock funds, a trend that gained momentum in June on the back of rising international stock prices.

“Including June, equity funds have now enjoyed three straight months of solid inflows. Investors are tiptoeing back into riskier asset classes,” said SI senior research analyst Loren Fox, in the press release.

Deals & People July 14, 2009

RPG Adds Mid Atlantic Trust Co. to List of Approved Custodians

RPG Consultants has added Counsel Trust Company, doing business as Mid Atlantic Trust Company, to the RPG401k platform.
Reported by

RPG Consultants said the addition of Counsel Trust Company will open the door for exchange-traded funds (ETFs) and that the program overcomes existing obstacles to holding ETFs in all types of defined contribution plans, such as 401(k), 403(b), 457(b) and profit-sharing plans.

The RPG401k system will integrate with MATC’s ETFxChange product to provide retirement plans with open-architecture, allowing for an array of ETF and mutual fund investment choices, according to a press release. RPG said the addition will offer significant cost savings to plan sponsors and participants.

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RPG’s recordkeeping and administrative capabilities provide a complete retirement plan solution to financial advisers and plan sponsors, giving them access to hundreds of ETFs and thousands of mutual fund choices, according to the company.

“We believe employees who are in 401(k) plans should also be given cost-effective and easily understood investments from the widest range of choices that their financial advisers can provide and that employers have the same cost effectiveness in a seamless operational and administrative platform,” said Alvin Rapp, RPG Consultants’ founding partner, in the release. “We encourage advisers to take advantage of the features that our platform provides, including the capability of our recordkeeping system to allow the adviser to develop asset allocations and other managed models using cost-effective ETFs.”


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