MutualFundWire.com: Odd Lots, May 20, 1999

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Thursday, May 20, 1999

Odd Lots, May 20, 1999

SEC's Roye to weigh in on SIA, ICI spat Friday
From The New York Times -- registration needed
The Securities Industry Association and the ICI are fighting over a potential law allowing a mutual fund to buy and sell securities with an affiliated brokerage house without first seeking regulatory approval. The law was sent by the SIA as part of its wish list of legislation to Senator Phil Gramm (R-TX). In response, the ICI wrote the SIA in April calling the proposal "entirely objectionable" since it would undermine a core protection for mutual fund investors. Paul Roye, director of the SEC's division of investment management, told the New York Times that he was concerned the lobbying group's proposal "would take us back to the 1930s," when mutual funds sponsored by large brokerage houses "were used as a dumping ground" for excess inventory or unpopular securities. Roye confirmed fund-industry reports that he would speak against the proposal in his remarks Friday at the annual meeting of the Investment Company Institute in Washington. "I'm expressing my own views, but my speech will reflect the advice I would give to the commission," Roye told the paper.

Eaton Vance on the gravy train
From The Boston Herald
Why are investors bidding up the price of Eaton Vance Corp. shares? The shares have jumped 27 percent since May 1. The Boston fund company attributes to a change in the way it accounts for commission payments and positive talk about the company's growth. However, the paper points out that past share price jumps have been caused by takeover talk. Yesterday, Putnam, Lovell, de Guardiola & Thornton analysts took a positive view of the company and suggested its shares could reach $40, citing ``continued strong asset growth'' and expected gains from the commission accounting change. Shares closed yesterday at $29, up 19 cents. Financial Research Corp. reports that Eaton Vance ranked sixth among broker sold funds groups in gathering assets during the first quarter with $1.2 billion of net sales.

Funds' median market cap slips
From The Wall Street Journal -- password needed
Fund managers are downshifting on the marketcap of their funds, according to the WSJ. The paper reports that Lipper Inc. found that the weighted median market cap of stocks in large-company mutual funds continued rising to hit $61 billion in March, but dropped to $58.3 billion in April.

The impact of extended trading hours
From The Wall Street Journal -- password needed
Fund companies are likely to stick to the 4 pm prices as the basis for their daily NAVs even if trading hours are extended, according to the ICI. Others foresee fund managers trading from cell phones at the dinner table. The WSJ takes a look at the possible fallout created by extending trading hours.

Funds in the Press

SmartMoney profiles the manager of the Grand Prix fund, a true quant.