Wealth Management Media Scan

American Banker, August 28, 2007 | Go to article overview

Wealth Management Media Scan


Volatility Plays

The volatile markets are generating some excellent buying opportunities in corners of the mutual fund world, according to The Wall Street Journal.

Though a handful of closed-end funds and exchange-traded funds - types of mutual funds that trade on an exchange, as stocks do - have taken especially big hits in recent weeks as panicked investors bailed out, analysts now say that a few of these funds look undervalued.

In particular, some closed-end funds are trading at much wider-than-usual discounts to their net asset values, according to The Journal.

Unlike typical mutual funds or exchange-traded funds, closed-end funds issue only a set number of shares. Thus, depending on investor demand (or its lack), they can trade at prices above or below their net asset value.

Closed-end funds typically trade at a slight discount to their net asset value, but the gap began to widen steadily in the past few weeks or so.

Some closed-end funds are beginning to trade at particularly steep discounts that some observers say make them buying candidates for aggressive-minded investors looking for ways to play the turbulent market.

For example, the Lazard Global Total Return and Income Fund, which invests in equities and foreign currency, is trading at a discount of about 12% to its net asset value.

Global Opportunities

International fund managers and strategists are finding some unique opportunities in foreign markets right now despite the fallout from a global credit crunch, according to MarketWatch.com, but they are being a little bit picky.

David Herro, who manages the Oakmark International Small-Cap and Oakmark International funds, for instance, says some of the best-run and inexpensive pharmaceutical companies are in the United Kingdom.

According to MarketWatch.com, Mr. Herro likes GlaxoSmithKline PLC in the United Kingdom and Novartis AG in Switzerland.

Benjamin Segal, a manager at Neuberger Berman International, continues to find very interesting, focused midcap companies overseas, for example, France's Vallourec Usines A Tubes De, which makes seamless steel tubes for oil and gas companies.

He said that he likes the Belgian company Inbev SA, one of the world's largest brewers, because "you can't imagine a business that is much more immune to credit cycles."

A Ponzi Planner

An Oregon financial planner went from riches to rags after a multiyear investigation by the Securities and Exchange Commission and a civil trial in federal district court that led authorities to shut down the former investment guru and his SEC-registered investment advisory firm, Rhodes Econometrics, for fraud and securities-advisory violations, according to Barron's. …

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