Tim's Feed
Sep 16, 2014

As Vanguard trounces U.S. rivals, it moves slowly overseas

By Ashley Lau and Tim McLaughlin

MALVERN Pa. (Reuters) – As U.S. investors race into Vanguard Group mutual and exchange-traded funds at breakneck speeds, the No. 1 mutual fund company’s overseas operations have expanded at a comparative snail’s pace.

Vanguard Chairman and Chief Executive William McNabb is happy with an overseas strategy that is sometimes painstakingly slow because he wants to preserve what he sees as the company’s most valuable export: the culture of low-cost investing.

Sep 11, 2014

Some Dollar Tree investors see advantages if Family Dollar bid fails

BOSTON, Sept 11 (Reuters) – Some Dollar Tree Inc
investors are crossing their fingers the company doesn’t succeed
in its $8.5 billion takeover of Family Dollar Stores Inc
, saying it could expand and repurchase stock with the
$305 million breakup fee while avoiding all the risk of a major
acquisition.

The deal announced in July is now under threat after
similarly-named but larger rival, Dollar General Corp,
outbid it this week with a $9.1 billion hostile takeover
proposal. Dollar General had been rebuffed by Family Dollar on
previous offers but is seen as likely to win a protracted battle
this time.

Sep 9, 2014

Jack Ma, ‘capital-lite’ model impress at Alibaba’s Boston IPO event

BOSTON (Reuters) – Alibaba Group Holding Ltd has two major things going for it as it prepares for an initial public offering that could raise more than $21 billion: founder Jack Ma and a “capital-lite” business model.

While corporate governance remains a concern, several fund managers and analysts said Ma gave an impressive performance during the company’s pitch in Boston on Tuesday for what stands to be the largest-ever U.S. technology IPO. They also said the Chinese e-commerce company’s business model features strong cash-flow generation and low capital intensity similar to U.S. Internet stars Facebook Inc and Google Inc.

Sep 4, 2014

Man tied to deadly 2012 U.S. meningitis outbreak arrested

BOSTON (Reuters) – U.S. officials on Thursday arrested a pharmacist linked to a 2012 outbreak of meningitis, which killed 64 people across the United States, as he was boarding a flight out of the country, Justice Department officials in Boston said.

Glenn Adam Chin, 46, had been a supervising pharmacist at the former New England Compounding Center of Framingham, Massachusetts, which produced the tainted steroids that sickened 700 people in 20 states in the worst outbreak of fungal meningitis recorded in the United States, officials said.

Aug 22, 2014

Exclusive: Amid Ferguson rage, council’s lone black member keeps low profile

FERGUSON Missouri (Reuters) – In many ways Dwayne James is a beacon of hope in Ferguson, which has been torn apart by racially charged riots. The only black councilman in a predominantly black town, James is widely respected even by political opponents and talked of as a candidate for mayor.

    However, he has surprised some by maintaining a public silence for two weeks as Ferguson was rocked by riots over the killing of a black teenager by a white police officer.

Aug 12, 2014

Panicky U.S. junk bond investors flee funds despite good returns

BOSTON (Reuters) – Investors fleeing the U.S. junk bond market at a record pace this summer are punishing some of the sector’s best-performing funds, while some middle-of-the-pack peers are unscathed.

Net withdrawals from U.S. junk bond mutual funds totaled a record $5.8 billion during the first week of August, according to Lipper Inc, a unit of Thomson Reuters. The sell-off followed the withdrawal in July of an estimated $6.8 billion from junk bond mutual funds, whose main holdings of corporate junk bonds are being treated as overvalued.

Aug 6, 2014

Top Fidelity fund managers frowned on Valeant amid Botox bid

BOSTON (Reuters) – Two of Fidelity Investments’ top stockpickers unloaded most of their holdings in Valeant Pharmaceuticals Inc after the drugmaker in April unveiled its bid for Botox maker Allergan Inc in what is one of 2014′s most contentious takeovers.

William Danoff, who runs the $106 billion Fidelity Contrafund, a staple in U.S. 401(k) plans, slashed his Valeant position by 83 percent to about 462,000 shares during a two-month period that ended June 30, fund disclosures show.

Aug 5, 2014

Unlikely booster for money market funds: beat-up Puerto Rico bonds

BOSTON, Aug 5 (Reuters) – Money market funds run by Fidelity
and American Beacon are relying on an unlikely source to juice
up their returns: beat-up bonds issued by cash-strapped Puerto
Rico.

The funds have accepted the U.S. territory’s debt as
collateral on their short-term loans to Wall Street banks, and
in exchange for that added risk are receiving a higher interest
rate, according to public filings.

Jul 25, 2014

Passive to a point: ETFs stray from index to sell Puerto Rico debt

NEW YORK (Reuters) – Puerto Rico’s worsening debt crisis is pushing the managers of some municipal junk bond exchange-traded funds to ditch their mandate for passive management. Instead, they are straying far and wide from benchmark indexes as they try to avoid taking a hit on the island’s bonds.

At least two passive ETFs, offered by Van Eck Global and State Street Global Advisors (SSgA), already have made moves to cut their exposure to Puerto Rico bonds to avoid being caught with debt that could be impaired or restructured, portfolio managers said.

Jul 23, 2014

Money fund rule changes offer new reality to U.S. retail investors

BOSTON, July 23 (Reuters) – New rules announced on Wednesday
will likely drive safety-oriented retail investors away from
some money market funds because they highlight risks and make it
harder to pull cash out when market turmoil strikes.

The U.S. Securities and Exchange Commission’s reform will
force institutional “prime” money market funds to float their
share price, a major change from the current convention that
allows them to maintain a stable $1 per share net asset value.
The new rules also would allow money funds to impose fees and
restrictions on withdrawals during times of extreme market
stress.