At the bell

Study: ETFs a threat to mutual funds Despite what mutual fund insiders have been saying for years,…

Study: ETFs a threat to mutual funds

Despite what mutual fund insiders have been saying for years, exchange traded funds are indeed a threat to mutual funds, according to a report released Friday by research firm Cerulli Associates Inc.

Financial advisers are using ETFs in multiple ways in both the core and satellite allocations, as well as in the active and passive slices of investors’ portfolios, according to the report.

Advisers who are strategic asset allocators are likely to be more interested in ETFs for their lower fees and long-term-investment themes, the report said.

And advisers who employ a tactical-asset-allocation approach to their clients’ portfolios may use ETFs because they offer continuous liquidity and access to commodities and other markets where they want to make a concentrated bet.

“We believe that ETFs will be increasingly packaged as solutions with the assembler or platform controlling the portfolio construction,” Cindy Zarker, a director with Boston-based Cerulli and the lead author of the report, said in a statement. “One way mutual fund managers can combat this threat is to assemble portfolios that combine various satellites into solutions that offer professional management [the chance] to optimize the risk and return.”

Consumer confidence rose in August

Confidence among U.S. consumers inched up last month as the prospects for the overall economy improved, but consumers continued to fret about their personal finances.

The Reuters/University of Michigan Index of Consumer Sentiment increased to a reading of 63 in August, from 61.2 in July, but was markedly below the 83.4 reading recorded in August 2007.

U.S. salaries down, spending up

Incomes for Americans fell in July, while consumer spending was up slightly, reflecting the waning impact of President Bush’s economic stimulus package, according to a report from the Department of Commerce.

Personal incomes fell 0.7% in July, marking the sharpest decline since they dropped 2.3% in August 2005 after the economy took a hit from Hurricane Katrina.

Consumer spending increased 0.2%, marking the smallest increase since February.

Japan unveils big stimulus package

With Japan’s economy struggling and inflation reaching its highest level in more than a decade, its government Friday introduced an 11.7 trillion yen ($107.5 billion) stimulus package to try to ignite consumer spending, according to published reports.

The package includes 2 trillion yen ($18 billion) in rebate checks that will be sent to Japanese citizens.