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1940s Architecture In Chicago


If you're in college and want to lock in an all-time low rate on your student loans, refinance into a single consolidated loan now. On July 1 the rate on federally guaranteed Stafford Loans is expected to rise by roughly two points from today's 2.77%. By consolidating, you can get a fixed rate as low as 2.875%. Until now, only graduates have been eligible to do this. But some lenders are offering the option to current students who simply ask to start repaying their loans and then request a deferral on repayment until after graduation. The nation's largest student lender, Sallie Mae, requires borrowers to submit a signed consolidation application by June 30 (smartloan.com). Meanwhile, parents with federal Plus loans should also consolidate now, whether their children are still in school or have graduated. The Plus rate is at 4.17%, but a consolidated loan can lock in a rate as low as 4.25%.

Two types of debt instruments making the markets nervous these days reside in many a mutual fund. While hedge funds are getting all the attention for owning esoteric, high-yielding collaterialized debt obligations, or CDOs, (Finance, May 23), plenty of mutual funds hold them, too. Meanwhile, tobacco revenue bonds could go up in smoke if cigarette makers stop making payouts to the states that issued them (BW -- May 23).

We consulted eMAXX, Lipper's fixed-income database, for the 20 funds with the largest holdings of both bonds. (Go to businessweek.com/extras for the complete list.) Tobacco revenue bonds are staples in bond funds such as PIMCO Total Return and muni portfolios, including Nuveen Intermediate Duration Municipal Bond.

Since CDOs can be quite risky, it's surprising that money-market funds own them, including First American Prime Obligations Fund (FIVXX) and Nations Cash Reserves (NASX). It turns out these particular CDOs tend to be high-quality and low-risk. Still, a default or blowup could nick the value of funds that hold either type of bond. So you're better off knowing if a fund you own has them.

Tobacco revenue bonds (TRBs) could get snuffed out if cigarette manufacturers stop making payouts to the states that issued them (see BW, 5/23/05, "The High Cost of Nicotine Withdrawal"). We consulted eMAXX, Lipper's fixed-income database for the 20 funds with the largest holdings of

TRBs. A default or blowup could harm funds holding these bonds. Here's a list of the firms with the biggest holdings, as well as the largest funds in the complex that hold this debt.

Firm Name

No. of Funds with TRBs

Largest portfolios include:

Nuveen Advisory Corp.

83

Nuveen Intermediate Duration, Nuveen Municipal Value Fund

Franklin Templeton Investments

17

Franklin CA Tax-Free Income Fund, Franklin Federal Tax-Free Income Fund

Pacific Investment Management Co.

40

PIMCO Total Return, PIMCO Municipal Income, PIMCO Real Return Bond Fund

Capital Research & Management Co.

11

Bond Fund of America, Tax-Exempt Bond Fund of America

BlackRock Financial Management Inc.

27

BlackRock Municipal Income Trust, BlackRock Insured Municipal Income Fund

Goldman Sachs Asset Management

3

Goldman Sachs High Yield Municipal Fund, Goldman Sachs Short-Duration Tax-Free Fund

Deutsche Asset Management

10

Scudder Managed Municipal Bond Fund, Scudder CA Tax-Free Income Fund

Dreyfus Corp.

22

Dreyfus Municipal Bond Fund, Dreyfus Strategic Municipals

Fidelity Management & Research Co.

8

Fidelity Spartan Municipal Income Fund, Fidelity Spartan Intermediate Municipal Income Fund

Alliance Capital Management LP

25

AllianceBernstein Intermediate Diversified Municipal Portfolio, AllianceBernstein Intermediate NY Municipal Portfolio

Putnam Investments

21

Putnam CA Tax-Exempt Income Fund, Putnam Tax-Free High Yield Fund

Merrill Lynch Investment Managers

19

MuniHoldings NY Insured Fund, MuniVest Fund

OppenheimerFunds Inc.

1

Oppenheimer Intermediate Municipal Fund

Wells Capital Management

10

Strong Ultra Short-Term Municipal Income Fund, Strong Short-term Municipal Bond Fund

USAA Investment Management Co.

8

USAA Tax-Exempt (Long-Term, Intermediate-Term, and Money Market funds)

Citigroup Asset Management

8

Smith Barney Managed Municipals Fund, Smith Barney CA Municipals Fund

Eaton Vance Management Inc.

9

Eaton Vance National Municipals Fund, Eaton Vance Insured Municipal Bond Fund

Evergreen Private Asset Management

10

Evergreen Municipal Bond Fund, Evergreen Municipal Money Market Fund

MFS Investment Management

21

MFS Municipal High Income Fund, MFS Municipal Bond Fund

T. Rowe Price Associates Inc.

12

T. Rowe Price Tax-Free Income Fund, T. Rowe Price Tax-Free Income Fund

Data: eMAXX (Lipper's fixed-income database)

Hedge fund are getting all the attention for owning esoteric, high-yielding collateralized debt obligations (CDOs)

(see BW, 5/23/05, "Taking Risk To Extremes"), but plenty of mutual funds hold them, too. We consulted eMAXX, Lipper's fixed-income database for the funds with the largest CDO holdings. We were surprised to find many money-market funds on this list, but it turns out these particular CDOs tend to be high-quality and low-risk. Still, a default or blowup could nick the value of funds holding these bonds. Here's a list of the 20 largest funds with CDO holdings:

20 Largest Mutual Funds with CDO Holdings

Firm Name

Fund Portfolio

U.S. Bancorp Asset Management Inc.

First American Prime Obligations Fund

Banc of America Capital Management LLC (Charlotte)

Nations Cash Reserves

Banc of America Capital Management LLC (Los Angeles)

Nations Cash Reserves

Harris Investment Management Inc.

Harris Insight Money Market Fund

Harris Investment Management Inc.

Harris Insight Cash Management Fund

Federated Investors Inc.

Money Market Obligations (Prime Obligations)

Evergreen Institutional Asset Management

Evergreen Institutional Money Market Fund

Metropolitan West Asset Management LLC

Metropolitan West Total Return Bond Fund

Trusco Capital Management Inc.

STI Classic Prime Quality Money Market Fund

Northern Trust Global Investments

Northern Institutional Diversified Assets Portfolio

Evergreen Institutional Asset Management

Evergreen Money Market Fund

First Financial Capital Advisors LLC

Legacy Funds - Core Bond Fund

Northern Trust Global Investments

Northern Money Market Fund

Vanguard Group Inc.

Vanguard Short-Term Investment-Grade Fund

Citigroup Asset Management

Smith Barney Money Funds (Cash Portfolio)

Gartmore Global Investments

Gartmore Money Market Fund

HighMark Capital Management

HighMark Diversified Money Market Fund

Trusco Capital Management Inc.

STI Classic Institutional Cash Management Money Market

Federated Investors Inc.

Federated Prime Value Obligations

Federated Investors Inc.

Money Market Obligations (Prime Value Obligations Fund)

Data: eMAXX (Lipper's fixed-income database)

Cheap, single-use cameras are great to have when you've forgotten your regular one or want something to hand out to friends to commemorate special events. Here's one that's more flexible than most: The Kodak (EK) Zoom, which retails for about $10, has a slide switch on the front that swaps the regular lens for one that magnifies your picture by a third -- nifty for when you want to get in a little closer on a shot or to crop out background clutter.

To commemorate the 60th anniversary of the end of World War II, The Art Institute of Chicago has an exhibit highlighting 1940s architecture. Then, architects came up with clever housing solutions, including prefab construction, to meet demand from returning G.I.s. They envisioned a shimmering future with home heliports and curvy superhighways. The exhibit, 1945: Creativity and Crisis, Chicago Architecture and Design of the World War II Era, features the work of Mies van der Rohe, Richard Ten Eyck, and others. It runs through Jan. 8 (www.artic.edu).


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