AT THE BELL

Brinson to run money, not staff

Gary Brinson is relinquishing his administrative duties at Swiss banking giant UBS AG’s $386 billion asset-management operation to concentrate on strategy full time as chief investment officer. UBS chief financial officer Peter Wuffli will move in September from Zurich to Mr. Brinson’s digs in Chicago to become CEO of the UBS Brinson unit. Mr. Brinson said through two representatives that he approached UBS chief exec Marcel Ospel last year about cutting back his responsibilities. Performance doesn’t appear to be a problem: Institutional large-cap equity portfolios were in the top quartile for 1998 with a 27.4% return, according to Pensions & Investments Performance Evaluation Report.

Magellan pulls away from No. 2

Fidelity Investment’s flagship Magellan fund is staving off Vanguard Group’s Standard & Poor’s 500 index fund, which had been on track to unseat it as the nation’s largest mutual fund. Based on cash flows and performance trends, the 500 Index was expected to dethrone Magellan by September, but a comeback in performance by Magellan has pushed that event into December or January, according to Daniel P. Wiener, editor of the Independent Adviser for Vanguard Investors. Manager Robert Stansky “has been able to turn around an aircraft carrier,” Mr. Wiener says. As of Feb. 28, Magellan had almost an $8 billion lead on the index fund with $85.9 billion invested. The lead was only $5.9 billion in late November. Magellan returned 9.62% in December and 5.25% in January, vs. 5.81% and 4.2% for the 500 Index.

10,000 maniacs: Dow is singing

As the Dow Jones Industrial Average leaps toward 10,000, money managers are already arguing over when it will reach 11,000. Susan Flischel, chief investment officer at Countrywide Funds in Cincinnati, says the market will rise above 11,000 through this year. “There are still a lot of important positives: a good economy fueling earnings growth, low inflation and positive consumer confidence,” she argues.

Not so fast, says Bill Quinn, president of American AAdvantage Funds in Fort Worth, Texas. He’s not fazed by the Dow’s gaining more than 600 points in the first half of March, or that it hit 9897.44 on Thursday and closed the week at 9876.35. Sure the Dow will pass 10,000, he says, but then it will soon settle down, because the small number of large-company and technology stocks driving the market can’t keep up this pace forever.

State St. CEO’s pay quadrupled

Marshall Carter, chairman and chief executive of Boston’s State Street Corp., earned $8.9 million in 1998 performance awards, restricted stock, salary and bonuses — nearly four times the $2.3 million he was paid in 1997, according to public filings. Most of his pay, $5.7 million, was from performance awards granted in 1996 and earned over two years. In addition, Mr. Carter got the option to buy 137,800 shares of stock. If the price of the stock climbs 10% a year over the 10-year life of the options, they would be worth $23.5 million.

Waddell & Reed raises fees

Waddell & Reed Financial Inc. is hiking management fees of its $25.1 billion mutual fund group by 10%. The increases average 0.07% in the firm’s stock funds and 0.06% in its bond funds. On the other hand, the Shawnee Mission, Kan., company for the first time will bring fund fees down as assets increase. It’s also eliminating an unusual group fee structure that has shareholders in its variable annuities and United funds paying an umbrella charge in addition to fund-specific fees.

CheckFree to buy Mobius Group

Atlanta-based CheckFree Holdings Corp., which furnishes electronic bill-paying services, is buying Mobius Group, a Research Triangle Park, N.C., provider of asset-allocation tools and money-manager performance data. It’s paying $18 million in stock. Privately held Mobius generated $6.6 million in revenue last year.

SEC counsel to head a division

Annette Nazareth, 43, former managing director at Citigroup’s Salomon Smith Barney unit, has taken over the Division of Market Regulation at the Securities and Exchange Commission. She replaces Richard Lindsey, who left to become senior managing director at Bear Stearns Cos. Inc. She had been senior counsel to SEC Chairman Arthur Levitt since September. Her husband is Roger Ferguson, a member of the Federal Reserve Board.

Robert Colby, deputy director of the division, will assume additional duties as senior adviser to the chairman for market issues.

Bipartisan tax-cut bill

Sens. Paul Coverdell, R-Ga., and Robert Torricelli, D-N.J., introduced a bill that would cut taxes by $350 billion over 10 years. Provisions would exempt from taxes the first $5,000 of capital gains for assets held more than 12 months. It also would raise contribution limits for individual retirement accounts to $3,000 from $2,000 and make the first $500 in interest or dividends tax free for couples, $250 for singles.

It also would raise income levels for the 15% tax bracket by $10,000 for both married and single taxpayers. That puts the adjusted gross income for married joint filers at $53,050.

Etc.: Fidelity in new thrift bid

Fidelity Investments has refiled its application with the Office of Thrift Supervision to launch Fidelity Personal Trust Co., a federal savings bank that would offer trust services to the rich (InvestmentNews, Jan. 11) … Marina Carlson, 34, manager of Strong Capital Management Inc.’s recently launched $2.7 million Mid Cap Disciplined Fund, has jumped to rival Milwaukee money manager Artisan Partners LP.