Page 24 - ARUBA TODAY
P. 24
A24
BUSINESSMonday 12 October 2015
Many losers, few winners: 3Q mutual fund review Bank: Malaysia
fund broke the
STAN CHOE Here’s a look at how mutu- It returned less than 1 per- stocks from emerging mar- rules, must pay
AP Business Writer al funds performed during cent. kets, which have a long
NEW YORK (AP) — Some- the third quarter: — Popularity doesn’t al- history of big swings. Latin KUALA LUMPUR, Malaysia
times, pain hits nearly ev- — Stock funds struggled. ways translate into returns. American stock funds tum- (AP) — Malaysia’s central
erywhere. All but three of the 2,255 One of the hottest areas for bled an average of 21.4 bank said this weekend a
The vast majority of mutual mutual funds that focus on investors has been foreign percent, while Chinese debt-laden state invest-
funds skidded to losses last U.S. stocks had losses. stock markets. stock funds lost 20.1 per- ment fund violated foreign
quarter as worries wors- They couldn’t overcome Europe and Japan are cent. exchange rules and must
China’s economic growth repatriate $1.83 billion it
Stock traders work at the New York Stock Exchange. The vast majority of mutual funds skidded to is in the midst of a sharp used abroad.
losses last quarter as worries worsened about global economic growth. slowdown, which is pulling The central bank said
down prices for the com- 1MDB obtained permission
(AP Photo/Mark Lennihan) modities that Latin Ameri- for overseas investments
can companies produce. based on “inaccurate or
ened about global eco- worries that a slowing earlier in their economic — Bond funds offered without complete disclo-
nomic growth. Uncertainty global economy will hurt recoveries than the United (some) protection. sure of material informa-
about interest rates made profits for U.S. companies, States, which means their Many bond funds held their tion.”
markets even shakier. which are increasingly reli- central banks are push- own, as they’re expected The bank said it therefore
Only 17 percent of the ant on customers abroad. ing stimulus while the Fed- to during down markets revoked three approvals
mutual funds tracked by The Federal Reserve’s de- eral Reserve moves in the for stocks. Interestingly, the it previously granted for
Morningstar were able to cision to hold off on raising opposite direction. That, funds investors had been 1MDB investments and or-
scrounge out positive re- rates at its last meeting also plus cheaper valuations most fearful of did best: dered the investment fund
turns in the three months shook markets. abroad, led investors to longer-term bond funds. to repatriate the total of
through September. That’s Consider the largest mutual pour nearly $210 billion When interest rates rise, $1.83 billion to Malaysia.
down from 41 percent in fund by assets, Vanguard’s into foreign stock mutual bond prices fall because The central bank’s move
the second quarter, and Total Stock Market Index funds and exchange-trad- their yields look less attrac- is a new blow to the fund,
it’s the reverse of the first fund, which helps make ed funds in the 12 months tive. Longer-term bond which was set up by Prime
quarter, when 87 percent up the core of many 401(k) through August. They prices are particularly sen- Minister Najib Razak in 2009
of funds made money. accounts and IRAs. It lost pulled more than $7 billion sitive to rate changes be- to develop new industries,
The biggest losses last quar- 7.3 percent over the three out of U.S. stock funds over cause they lock investors but faces accusations of
ter came from funds that months. That’s its biggest the same time. into fixed rates of return for graft and mismanagement
invest in stocks, which is quarterly loss in four years. After plowing that much longer. after it accumulated at
typical when fear is high. If it doesn’t rebound in the in, investors were reward- That’s why many investors least 42 billion ringgit ($10
Bond funds offered some next three months, the fund ed with losses from nearly have been shifting in re- billion) in debt.
protection, fulfilling their will have its first down year all foreign stock funds last cent years from long- and The central bank began
traditional role of stabilizers since the financial crisis in quarter. All but four of the intermediate-term bond investigating the fund ear-
for a portfolio, but not as 2008. The best-performing 1,154 dropped last quarter. funds to short-term options. lier this year and said it has
much as they have in prior U.S. stock fund last quarter The sharpest losses came Last quarter, short-term recommended criminal
downturns. was the Polen Growth fund. from funds that focus on bond funds had modest prosecution of it.
losses, while longer-term The attorney general how-
funds had modest returns. ever, said Thursday that
Short-term bond funds lost it had studied the central
an average of 0.2 percent, bank investigation report
intermediate-term bond but found no wrongdoing
funds returned 0.3 percent by fund officials.
and long-term bond funds The police and the anti-
gained 1.7 percent. corruption agency are also
That’s in part because investigating the fund.
the yield for the one-year 1MDB said the central
Treasury bill rose last quar- bank approvals were giv-
ter, while yields for 10- and en between 2009 and 2011
30-year Treasurys fell. It’s a for its investments, which
phenomenon that bond were made public in its an-
traders call a “flattening nual financial statements. It
yield curve,” and it’s one also said the permits didn’t
that some expect to contin- have any requirement that
ue. Just don’t expect bond the funds be repatriated.
funds to offer as much pro- It said in a statement that
tection as they did in prior the $1.83 billion has either
downturns. q been spent or earmarked
for settlement to reduce its
USDA lowers corn, soybean harvest estimates by 1% debts.
1MDB said it will continue
DES MOINES, Iowa (AP) — of corn, about 1 percent mates are also 1 percent kota. to engage with the central
The U.S. Department of lower than the September lower. About a fourth of the na- bank to seek a resolution
Agriculture has slightly low- estimate but still the third But the 3.89 billion bushels tion’s corn crop has been to the matter.
ered its corn and soybean largest crop on record. would be the second larg- harvested, which is slightly The 1MDB crisis has been
harvest estimates based Record per-acre corn est on record. behind average. partly blamed for the
on updated harvest figures yields are expected in 11 Soybeans are ahead of the sharp plunge in the Ma-
across the U.S. states — including Iowa, Best-ever yields are ex- five-year average with 42 laysian ringgit, which fell
Farmers are expected to Nebraska and Wisconsin. pected in seven states, in- percent harvested.q last month to 17-year low
bring in 13.56 billion bushels Soybean production esti- cluding Iowa, Minnesota, against the dollar. q
Nebraska and South Da-
