Fund companies facing major cutbacks

“ING Investment Management in the U.S., which manages $196 billion in mutual funds and insurance products, let go of 10%, or 110, of its employees earlier this year, including analysts and portfolio managers. … Stock mutual funds also are facing rising competition from exchange-traded funds, offered by only a few providers like State Street Corp.’s State Street Global Advisors.”

Fund managers are having to make adjustments in their business to survive what is a downdraft in the market, says Paul Schott Stevens, president of the Investment Company Institute, who provided comment for WSJ Thursday.

The Journal cites data from The Investment Company Institute, stating nearly $3.4 trillion, or 50 percent, of stock-fund assets have either disappeared in market declines or left through investor exoduses since January 2008. In 2008, fund companies collected fees of $51 billion from all of their funds, down from $68 billion the year earlier. This is the sharpest drop in fees in two decades.