Investing June 24, 2010

Mutual Fund Flows Retreat in May

June 24, 2010 (PLANSPONSOR.com) - Stock and bond funds experienced net outflows of $2.9 billion in May, according to data from the Financial Research Corporation (FRC).
Reported by

The Corporate Bond objective led the net inflow category with $4.3 billion, followed by the Tax-Free Bond objective with $3.4 billion. The Equity objective saw a $9.3 billion outflow.  

By Morningstar category, Equity Precious Metals drew in nearly $7 billion, while Short-Term Bond posted a net inflow of nearly $5 billion, and Intermediate Term bond saw a $4-billion net inflow.  

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SSgA’s SPDR Gold Shares attracted $5 billion to lead the fund sales charts. PIMCO Total Return was a distant second, taking in $3.6 billion, and SSgA’s SPDR S&P 500 ETF posted a net inflow of $2.2 billion.  

The Mutual Fund Net Flows release includes ETFs and excludes money market funds in its universe of mutual funds.  

FRC data can be found at http://www.frcnet.com.
Administration June 24, 2010

GASB Releases Investment Reporting Updates

June 24, 2010 (PLANSPONSOR.com) –The Governmental Accounting Standards Board (GASB) issued Statement No. 59, Financial Instruments Omnibus, which it said updates existing mandates regarding financial reporting of certain financial instruments and external investment pools. 
Reported by

The statement is effective for financial statements prepared by state and local governments for periods beginning after June 15, 2010, with earlier application encouraged, GASB said. 

Statement 59 includes the following guidance:  

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  • Emphasizes the applicability of U.S. Securities and Exchange Commission requirements to certain external investment pools—known as 2a7-like pools—to provide users more consistent information on qualifying pools;  
  • Addresses the applicability of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, to certain financial instruments to clarify which financial instruments are within the scope of that pronouncement and to provide greater consistency in financial reporting; and  
  • Applies the reporting provisions for interest-earning investment contracts of Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, to unallocated insurance contracts to improve the consistency of reporting by pension and OPEB plans.  

“Statement 59 addresses significant practice issues that have arisen when accounting for financial instruments,” stated GASB Chairman Robert H. Attmore, in a news release. “By increasing the consistency of measurements and providing clarification of existing standards, this guidance will improve financial reporting in ways that benefit both users and preparers of financial reports.”  

GASB Statement 59 is available for purchase at www.gasb.org.  

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