Painewebber Joins In Mutual Fund Supermarket
PaineWebber Group Inc. is the latest Wall Street firm planning to offer investors access to a range of mutual funds from different money management companies.
The New York-based brokerage joins several other firms in starting a fund “supermarket.” It expects to begin offering the service to existing customers early next month and to new customers in early 1997.
Merrill Lynch & Co. and Prudential Securities Inc. are planning to offer similar services, and Smith Barney Inc., a subsidiary of Travelers Group Inc., already is.
Selling hundreds of mutual funds at one store was thought up by Charles Schwab Corp. in 1992. Schwab calls its service OneSource.
Schwab charges fund companies at least 25 cents for each $100 of assets it attracts. Analysts said One-Source accounts for between 5 percent and 10 percent of Schwab’s profits, which last year totaled $172.6 million.
OneSource customers pay nothing to buy funds and can switch money from fund to fund at no cost. They get one statement accounting for all of their funds instead of several.
Fidelity Investments, the nation’s biggest fund company, and Jack White & Co., a San Diego-based discount brokerage, were the first to follow in Schwab’s footsteps.
Latin funds star in 1996
Small investors who stuck with mutual funds invested in Latin America have been handsomely rewarded this year.
According to Lipper Analytical Services, returns from such funds so far in 1996 have averaged 21.4 percent, almost triple the performance of U.S. funds and far ahead of funds focused on either Europe or Asia.
And that success is attracting still more investment. One, the $35 million Invesco Latin America Growth Fund, has attracted $14 million in new dollars.
The region prospects remain strong. Merrill Lynch international strategist Doug Johnson pointed to low interest rates and a stable peso as strong fundamentals.
New rules help small investor
The Securities and Exchange Commission’s new rules for trading on the Nasdaq Stock Market will be a boon for small investors, according to the president of a Houston-based brokerage firm.
The SEC’s rules were adopted in response to charges of price fixing by dealers, mainly big brokerage firms, that buy and sell stocks on Nasdaq, the nation’s second-largest stock market.
Aimed at improving individual investors’ access to the best prices on Nasdaq, the rules allow investor orders to compete with those placed by dealers and institutions. They also require private trading systems like Instinet to display their best prices on Nasdaq.
“It’s going to give investors a chance to get a fair price in the market for the first time, without being subject to market maker manipulation,” said Jeff Burke, president of Block Trading.
The rules are also good news for Block because it specialzes in representation of small investors.