US firm to deliver bargain tracker funds

The launch of a US investment group in the UK may herald the dawn of cheaper fund management charges for British investors

The ultra low-cost US mutual fund group Vanguard has announced its intentions to launch into the already crowded UK market.
It gained fame for bargain tracker funds with fees that are a fraction of the cost of traditional rivals.
The group, which manages more than $1.1 trillion in assets and serves more than 23m individual and institutional accounts worldwide, has made a name for itself across the Atlantic for selling low-cost funds.
Investors reportedly poured some $84bn of new money into Vanguard products in 2008.
Subject to regulatory approval, Vanguard is expected to launch a range of index tracking funds later in 2009.
Martin Bamford, of Informed Choice, an independent financial adviser, says: 'This has the potential to be a very healthy addition to the UK fund management industry from a competition perspective.
'If investors can get cheaper access to tracker funds, then that is a good thing.'
Presently Vanguard offers some 200 funds to US investors.
As well as running actively managed funds, the group has portfolios tracking indices such as the FTSE 100 in the UK, and the Dow Jones and S&P 500 in the US.
Vanguard was established in 1974 by John Bogle and it made its name with tracker funds – investments that mirror the performance of a particular index or market.
As such the success of the fund is dependent upon the fortunes of the index it is tracking. If the index rises, so will the fund's value but the reverse is also true.
Advisers are hopeful that its arrival in Britain could spur-on a price war between UK-based fund managers.
The average Vanguard index fund carries an annual charge of 0.15%, substantially less than the fees on UK index funds, which can range from between 0.7% to 1%. In addition, the group's mean annual expense ratio for all of its portfolio funds is just 0.2%, a miniscule figure compared with an average of 1.5% for actively-managed funds in the UK.
And this low cost is before extra administration costs are thrown into the mix, which annual management charges figures do not usually include. In some cases these mean the total expense ratio (TER) can creep up to nearer to 2%. Vanguard's TERs tend to be quite low. Its European Stock Index Investor fund has a TER of 0.5% while its US 500 Stock Index Investor's TER is just 0.38%.
In stark contrast, the Legal & General UK 100 tracker charges 0.75% and has a TER of 0.84% according to Informed Choice. The Virgin UK Index Tracker levies a TER of 1% On the other hand, Fidelity's All-Share tracker - its MoneyBuilder UK fund charges 0.1% a year but its TER is just 0.27%.

GAIN Capital's FOREX.com Launches Gold Trading

24-hour spot gold trading added to online trading platform in response to strong investor demand
NEW YORK, Feb. 26 /PRNewswire/ -- GAIN Capital, a global provider of online foreign exchange (forex) services, today announced that its FOREX.com division is now offering spot gold trading.
"The current economic climate is generating a lot of market interest in gold," said Tim O'Sullivan, chief dealer at GAIN Capital. "Short term traders are taking advantage of the daily volatility and longer term investors are buying gold as a store of value in these troubled economic times and as a hedge against inflation expectations."
Gold climbed to an 11-month high of $1006.29/oz on February 20 before retreating back to $951.75/oz on February 25. Traders are now bracing for a continued technical showdown around the key $1000/oz level.
"Spot gold is a natural product extension to our core forex offering," added Glenn Stevens, GAIN's Chief Executive Officer. "Three of gold's most powerful drivers are market factors that forex traders already follow closely: the strength of the U.S. dollar, the price of oil, and inflation expectations."
Benefits of spot gold trading at FOREX.com:
Commission-free trading (pay only the bid/offer spread)
24-hour trading from Sunday 6 p.m. ET - Friday 5 p.m. ET
Low 2% margin requirement
Competitive dealing spreads, as low as .50 points
Small contract sizes available (1 contract = 10oz)
For more information and to register for a free practice account, visit FOREX.com.
About GAIN Capital
GAIN Capital is a market leader in the rapidly growing online foreign exchange (forex or FX) industry. Founded in 1999 by Wall Street veterans, GAIN now services clients from more than 140 countries and supports average trade volume in excess of $200 billion per month.
The company operates FOREX.com (www.forex.com) one of the largest, best-known brands in the retail forex industry. FOREX.com services individual investors of all experience levels with a full-service trading platform, advanced tools and research, and extensive education and training. In addition, GAIN Capital provides execution, clearing, custody, and technology products and services, supporting over 50 correspondent and white label arrangements with broker/dealers, Futures Commission Merchants (FCMs) and other financial services firms around the globe.
With offices in New York City, Bedminster, New Jersey and London, GAIN Capital and its affiliates are regulated by the Commodity Futures Trading Commission (CFTC) in the US and the Financial Services Authority (FSA) in the United Kingdom. Spot Gold contracts are not subject to regulation under the U.S. Commodity Exchange Act.

Nepal Economy undergoing through severe crisis: Senior Economists

Nepal’s senior economists have opined that the national economy is already in a severe crisis.
“The crisis is mainly due to the government’s unwanted interventionist policies adopted of late in each and every sector of the country’s economy which has contributed in the retardation of the economic growth rate and thus put the entire country into a severe economic crisis”, is how the economists observe the present economic scenario.
One of the internationally acclaimed senior economists of Nepal, Professor Dr. Madan Kumar Dahal says, “If the government fails in building an investment friendly environment, the country’s economy may soon collapse”.
Dr. Dahal was the Head of the Department of Economics at the Tribhuwan University until recently. Currently he is the Head of the Nepal Economic Association-NEA.
According to Professor Dahal, “the government which has adapted to a free market economy must and should not acquire an interventionist line but instead act as a facilitator only”.
"The private sector is the prime vehicle for economic development which is considered as universally acepted principle", continued Professor Dahal.
Opines Dr. Dahal, “ at a time when the government should have encouraged the private sector for the growth of the Nepali economy as is the practice worldwide, the government is seen to have intervened into each and every domain of the economy which bodes ill for the nation”.
“This must not happen for the healthy growth of the national economy”, continued Dahal.
“Such interventionist policies must be abandoned by the government at the earliest”, Professor Dahal adds further.
Dr. Dahal predicts that the government’s target of bagging 7% growth rate in the country’s economy is nothing but a paranoid affair.
The export has declined which means that it will have an adverse impact on the foreign currency reserve, reveals Dr. Dahal.
Since the Nepali workers living abroad are losing their jobs in quick succession which, says professor Dahal, will pose a direct threat to the regular inflow of remittance in the country.
Yet another economist, Dr. Chiranjibi Nepal emphatically said that the country’s economy was undergoing through a very difficult and challenging period.
Dr. Nepal is of the view that the government should immediately check the mushroom opening of Banks and Financial Institutions.
Dr. Nepal sees the need for the establishment of what he calls, “Credit Rating Agency” in the absence of which the lay men fear that their investment may go to the dogs any time.
The Chief Executive officer of the Nepal bank Limited, Mr. Binod Atreya opined that the financial institutions should be village centered.
“The Banks and the financial institutions must not be Kathmandu centric but instead they should concentrate their financial transactions in the villages and serve the people”, added Mr. Atreya.
“Go to the villages and serve the people living there”, opines the chief executive officer of the Nepal bank Limited.
The Chairman of the Muktinath Development Bank, Mr. Bharat Raj Dhakal said that a sort of financial anarchy could be noticed at the moment in Nepal which is due to the unchecked/unregulated mushrooming opening of the financial institutions under the cover of open economic policy.
The senior economists made their views known yesterday February 25, 2009, at an interaction program organised by Mirmirey Media Club in Kathmandu.

South Asia urged to push lenders for payment relief

South Asia should push international lenders for a year's halt on payments and create a network of currency swaps to help weather the global crisis, Sri Lanka's president told a regional bloc on Friday.
President Mahinda Rajapaksa, who chairs the South Asian Association for Regional Cooperation (SAARC), also urged a meeting of its foreign ministers to boost efforts to counter terrorism in a region beset by unrest and poverty.
"The instability caused by this crisis can be considered quite similar to the threat caused by terrorism to our societies and our region," he said.
SAARC represents roughly a fifth of the world's population, but has rarely risen above squabbles over a free trade agreement and has been hobbled by regional rivalries, particularly those between India and Pakistan.
Neither nation sent their foreign ministers to the two-day meeting. Sri Lanka, Bangladesh, Afghanistan, Bhutan, the Maldives and Nepal round out the rest of the group formed 23 years ago to boost economic cooperation.
Rajapaksa said the bloc should push multilateral and interational lenders for standstill arrangements on debts for at least a year "so that developmental initiatives ... will not have to be abruptly stopped".
"Such arrangements could also be flexible enough so that at the end of one year, these could be reviewed and extended if the global financial crisis would still exist," Rajapaksa said.
That issue is close to home for the Indian Ocean island nation, which saw its rupee currency hit an all-time low on Friday amid low foreign exchange reserves that prompted Fitch to cut its outlook to negative. [ID:nHKG210950]
To help bolster reserves, Sri Lanka has already entered into a currency swap deal worth $200 million with one country it will not name, and the central bank says it is in advanced discussions with two other nations.
Rajapaksa said a similar regional iniative would be a tonic to soothe the trickle-down effects of the crisis, as the ASEAN bloc has successfully implemented.
"I am reminded of the success in our adjacent region, East Asia, which during the East Asian financial crisis, created a network of bilateral swap arrangements and has now created a reserve fund to address liquidity problems," Rajapaksa said.
Full economic cooperation has long eluded SAARC, despite signing a free trade deal in 2006 that has yet to show any real benefits.
Intra-SAARC trade is just over 5 percent of South Asia's total trade, compared to 26 percent seen among ASEAN countries and 55 percent among EU members.
Sri Lanka is halfway through its one-year chairmanship, after an August summit in Colombo at which leaders signed a pact to combat terrorism and to create a food bank to fight hunger amid then-rising food prices.