Worldwide Mutual Fund Assets Down in Q2

November 9, 2004 (PLANSPONSOR.com) - Worldwide mutual fund assets decreased slightly in the second quarter of 2004, down to $14.41 trillion from a previous high of $14.56 trillion in the preceding quarter.

Net flows into mutual funds worldwide were also down on the quarter, with a net inflow of only $18 billion being posted, a paltry sum compared to the $246 billion in the first quarter, according to an Investment Company Institute (ICI)  release .

Breaking down the worldwide mutual fund industry, equity funds were seen to be in the positive, with a 1.4% increase in assets seen in the second quarter. This brought the total amount of assets in such funds to $6.3 trillion worldwide.   Net inflow into equity funds was $75 billion in the quarter, smaller than the first quarter inflow of $143 billion, but still in the black. All regions, including Asia/Pacific, Africa, Europe, and the Americas reported positive new inflows from April to June, according to ICI.

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Bond funds, on the other hand, fell 2.9% in the second quarter, pulled down, at least in part, by an $11 billion outflow. The Americas saw the most severe outflow (negative $11 billion), while Europe and Africa actually saw a net inflow into the bond fund market.

Money market funds worldwide also fell, dropping 2% in the second quarter. Net outflows were severe in this industry, with a $63 billion loss seen. US money market outflows were the most severe ($59 billion outflow), while Europe and Asia/Pacific funds reported modest inflows.

At the end of the second quarter, equity funds accounted for 44% of total mutual fund assets worldwide, with money market funds holding a 23% share of the market Bond funds held a 20% share, while balance/mixed funds were at 9%. Fifty-seven percent of worldwide mutual fund assets were held in the Americas, with 33% being held in Europe and 10% being held in Asia/Pacific and Africa combined.

Chapman Jurors Seek Verdict 'Advice'

August 11, 2004 (PLANSPONSOR.com) - Federal court jurors turned to the judge hearing fraud charges against a former money manager for the state of Maryland retirement system for guidance about what to do if they couldn't reach a unanimous verdict on some of the 32 charges.

The Associated Press reported that, in a note read byUS District Judge William Quarles, jurors said they were spending a lot of “precious time” on at least one of the counts against defendant Nathan Chapman Jr. and pleaded to Quarles: “”We need your advice regarding this matter.”

Quarles called the jury into court and told them they could reach a verdict on all counts, some counts or none. “It’s entirely up to you,” he said, before sending the jury back to deliberate. The jury was in its sixth day of deliberations in a case that began almost two months ago.

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Chapman, 46, was charged with mail fraud, wire fraud, securities fraud and other crimes in an indictment largely relating to his use of state retirement system funds to revive the stock price of his sagging company (See Chapman Fraud Trial Winds Down ).

The $29 billion retirement system, which is responsible for the pensions of more than 250,000 teachers, police officers, firefighters and other government workers, lost nearly $5 million in the transactions. Chapman managed more than $100 million in funds for the retirement system. He managed funds from 1996 until its trustees fired him in January 2002.

He also was accused of corrupting a pension trustee, Debra Humphries, one of the mistresses he allegedly showered thousands of dollars on, as well as gifts and a Hawaiian vacation (see Chapman’s Mistress Takes the Stand ).

Chapman served on the University System of Maryland’s Board of Regents for eight years, nearly four of them — from 1999 to 2002 — as chairman. He was a friend and political supporter of former Governor Parris Glendening who appointed Chapman to the board and pushed for his selection as chairman.

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