Mutual Fund News Roundup: November 7

Staying on top of the most important mutual fund news is important for investors. Below, we highlight some recently reported mutual fund-focused news.

Investors pulled $20.3 billion from bond-focused mutual funds in September. This marked the first outflow for bond funds since December 2013 – where investors pulled $20.29 billion from their portfolios. Year-to-date, investors have withdrawn $45.39 billion from bond funds, compared to $27.32 billion in the year before.

Stock funds saw outflows of $5.37 billion in September. Funds that invest partially overseas saw $8.14 billion in outflows. Year-to-date, stock funds saw inflows of $46.48 billion, compared to $116.80 billion in the year prior.

MarketWatch recently published an interview with Vanguard’s CEO Bill McNabb regarding his concerns about weaker returns, his optimism on the U.S. economy, his opinion on high frequency trading and what he does to clear his head.

He noted that we are in the low return environment and investors should be adjusting their portfolio accordingly. McNabb also noted that high frequency trading benefits outweigh the costs.

Forward Funds’ Jim Welsh recently published his November 2014 report on his Macro Strategy Review. In the report, he mentions several macro factors and their impact on the monetary policy. The factors included headwinds from central banks, the eurozone, stocks, bonds and gold.

For additional insights from Jim Welsh, check out our Interview with Jim Welsh.

Bill Smead of Smead Capital management shared his thoughts on how portfolio manager should strategize maximizing returns. He noted that managers should try to drive their expense ratio below their peers. He also mentioned that he thinks managers should focus on long-term holdings to reduce expenses.

In his write-up, Smead noted that managers are sometimes too focused on proving they can beat the market. Instead, they should concentrate on holding undervalued securities for long durations. To read the complete write-up, click here.

So called “Alternative Funds” have been gaining popularity over the last couple years, but some investment professionals do not consider them a separate asset class. According to an article published by the Wall Street Journal, the majority of these funds are held in alternative bond funds and long-short funds. The article also noted that regulators are concerned that investment professional are not educated enough on these funds. To read the full article, click here.