Waddell Sees 'Little' Crash Fallout
Author: Jenny Strasburg</br></br>Waddell & Reed Financial Inc., the Kansas firm whose May 6 trading regulators have highlighted as a trigger of the "flash crash," said its mutual-fund inflows declined last quarter as profit rose.</br></br>But Waddell executives played down the impact of scrutiny it has received over its $4.1 billion sale of futures contracts May 6 tied to the Standard & Poor's 500-stock index. Regulators earlier this month said the trade, made using a computer algorithm, spooked an already-fragile market and helped trigger the day's stock selloff.</br></br>At Waddell, business has continued more or less as usual under the spotlight, executives said on a third-quarter earnings call on Tuesday. The company managed $76 billion in assets at the end of September, its most ever at the end of a quarter, and it pulled in money when many mutual funds had outflows.</br></br>"There's little effect that has been seen," Thomas Butch, an executive vice president of the firm who oversees sales of Waddell's popular Ivy Asset Strategy Fund and other retail and wholesale funds, told analysts on a call Tuesday. Traders with the Asset Strategy fund were responsible for the futures trade in question, which they intended as a hedge, or protection against losses, amid market turbulence.