AT THE BELL

Kemper rejiggers managers

Scudder Kemper Investments Inc. is retooling its laggard $2.7 billion Kemper Growth Fund. It replaced its four-member Chicago-based management team led by Steven Reynolds, 55, with New York-based Scudder managers Valerie Malter and George Fraise. Ms. Malter also runs the $309 million Scudder Balanced Fund and $651 million Scudder Large Company Growth Fund. Kemper Growth, which suffered $263 million in net redemptions last year, is shifting to a more aggressive growth strategy, says a spokeswoman. Mr. Reynolds, who joined Kemper in 1995 as chief investment officer for equities and took over Kemper Growth in February 1997, is leaving the company. He declined comment. His former co-manager, Maureen Lentz, also left recently.

GE bolsters retail fund arsenal

General Electric Co., new to the battle for retail clients, is adding four new mutual funds to the arsenal marketed by its General Electric Financial Assurance unit. The additions — three equity funds and a junk-bond offering — bring the number of GE retail funds to 17. Although GE runs $90 billion for its own retirees, it has only $2 billion in mutual funds.

Meantime, General Motors Corp., with $73 billion in pension assets, also is considering offering mutual funds to outside clients, modeled after new ones it launched for its own defined contribution plan.

SoGen sale hits snafu

Liberty Financial Cos.’ agreement to buy Societe Generale SA’s U.S. mutual fund unit for $216 million has apparently hit a snag and is rumored to be close to being canceled. Some administrative functions of the SoGen funds were to have been transferred to Liberty’s Colonial Group in Boston earlier this month, but weren’t, Liberty spokesman Porter Morgan confirmed. He declined to elaborate. So did Jean-Marie Eveillard, president of the SoGen unit, which has seen assets decline about 40% to $3 billion since the announcement of the deal, which is slated to close March 31.

Bond funds win converts

Although the stock market has been relatively tame so far this year, the amount of money flowing into bond and hybrid funds is up 14.5% to $6.3 billion this month, through Feb. 17, according to fund flow tracker Trim Tabs in Santa Rosa, Calif. And it’s up about 65.7% since December, when $3.8 billion flowed into bond and hybrid funds. “Those two very sharp declines (last year) are still scaring the psyche of the investing public,” says Charles Biderman, president of Trim Tabs. It’s all the more surprising given that rates, until recently, had been rising, pushing bond prices down. Since the August stock dive, 40% of new flows have gone to stock funds, vs. 70% before last July.

Fund fees down, but …

Mutual-fund fees have come down since the mid-1980s, but only modestly given the explosion in assets the industry has seen in that time, according to a study to be released today by Morningstar Inc. Most of the decrease occurred in load funds, whose costs have fallen nearly 25%, says the Chicago fund tracker. Excluding the gigantic, low-cost American Funds, however, load-fund costs are down just 15%. Expenses of no-load funds, on the other hand, are down less than 10%. Excluding market leaders Fidelity Investments and Vanguard Group, costs have increased.

New options for options

Stock options could be passed on to family members more easily under a rule adopted by the Securities and Exchange Commission. It allows employees to pass along options using the SEC’s Form S-8, which requires no staff review and which previously could be used only by companies to give their employees stock options. The new rule aids estate planning and property settlements in divorce cases.

The SEC also adopted rules aimed at curbing microcap fraud. One of them prohibits companies transferring stock and options to consultants or advisers using Form S-8 — a common practice for high-tech companies. Some stock promoters struck deals with companies for free stock, which they then dumped on the market after manipulating prices upward, says Brian Lane, director of the division of corporate finance.

Etc: Merrill inks online deal

Merrill Lynch & Co. Inc. agreed to buy the Internet-brokerage technology unit of securities firm D.E. Shaw & Co….Forty percent — a net $4.6 billion — of monies poured into Fidelity Investments’ mutual funds last year went into index funds, making it No. 2 in such funds behind Vanguard Group, reports InvestmentNews sister publication Pensions & Investments. That was almost double the percentage a year earlier.

Correction

This week’s mutual fund board compensation article contains an outdated salary figure in the text on Page 40. The high end of the salary range last year for fund directors at Merrill Lynch & Co. Inc. was $362,858. The $313,000 figure mentioned was the top of the range in 1997.