WEEK IN REVIEW

Vanguard angling for Anglos

While other mutual fund companies are salivating over the prospects of all the sushi they can gobble up now that Japan has deregulated its financial system, Vanguard Group is thinking steak and kidney pie. The Bogle bunch, No. 2 in the world in mutual funds and proud of it, is opening four funds in Europe, primarily for the corporate retirement plan market in Britain, the Netherlands and Belgium.

One will be a short-term liquidity portfolio, while the others will — no surprise here — track the Standard Poor’s 500 and other indexes. They’ll be managed in Valley Forge, Pa., but money will come through an office in Dublin under Frank Satterthwaite. Slainte, Frank.

Firm statement from Clinton aide

The Clinton administration is willing to discuss including private retirement accounts as a supplement in any overhaul of Social Security, said Franklin Raines, director of the White House Office of Management and Budget. But no one paid attention because he said it before the ruling to throw out the Paula Jones case was announced.

Burning, burning for fortune and fame

The Internal Revenue Service is aiming at bond dealers, rather than investors or issuers, in its investigation into yield-burning, or overcharging states and municipalities in refinancings. The Securities and Exchange Commission is also on their trail.

Dain Rauscher Inc., sued by the SEC in January on charges of inflating the price of Treasuries sold to Arizona in a bond refunding, denied everything. In fact, its lawyers accused the SEC of trying “to make policy by judicial decision. . .in its zeal to file a yield-burning case.”

Schwab’s cyberhit

Charles Schwab & Co., expects electronic trading to cut into its top revenue stream: commissions. At yearend it combined regular and electronic trading operations and cut the cost of cybertrades for most customers.

Its 10K filing with the Securities and Exchange Commission said the company expects revenue per trade to continue to decline. But it plans to make up the losses with increased volume. From 1993 to 1995, Schwab’s average commission per trade declined 12%, while commission income grew 56% and the number of trades grew 78%.

Nevertheless, narrowing profit margins led chairman Charles Schwab, 60, to take a 30% pay cut. His $800,004 salary changed not even by a dollar, but his bonus fell to $6.3 million from $9.4 million in 1996. The profit margin dropped to 19.5% from 21.3%.

Try standing on your head

Those wild and crazy guys, the Motley Fool, apologized to the mutual fund business for telling their “hundreds of thousands of readers” on the Internet that 91% of funds had underperformed stock market averages for the past five years. Proprietors David and Tom Gardner blamed a computer error, or their secretary Betty or something, for displaying a chart upside down, concealing the fact that actually 91% of funds had outperformed the indexes.

They neglected to say that they issued their apology April 1.

Putnam profit

Top insurance broker Marsh & McLennan Co. is skimming some cream off the top for Lawrence Lasser, CEO of its cash cow, Putnam Investments. Mr. Lasser has a new pay package that will give him $1 million a year through 2001 plus bonuses and options that could be worth millions. That’s more than J.C. Smith, M&M’s top hand, gets, but then again last year Putnam made $463 million, more than 60% of the parent’s operating profit.

Drop in the teacup

The state-run Bank of China, the country’s largest international bank, is retrenching and plans to fire half its 210,000 workers but doesn’t know when. It’s part of Premier Zhu Ronji’s plan to make China’s banks act like profit-making businesses. Welcome to capitalism.

Snoopy gets a new master

PaineWebber Inc. veteran Robert Benmosche, 53, will become chairman and chief executive of Metropolitan Life Insurance Co. July 1. He joined two and a half years ago. Outgoing chairman Harry Kamen, 64, is expected to stay on the board.

Bloomberg News contributed to this report