MutualFundWire.com: Odd Lots, November 11, 1999

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Thursday, November 11, 1999

Odd Lots, November 11, 1999

Uncle Len is the independent accountant
From The Wall Street Journal
Small mutual funds are plagued with the situation of attracting independent directors within their budget. In one situation, Ryan Jacob's new Internet fund is using his very own Uncle Len as its "independent" accountant. The SEC has proposed boosting the role and independence of fund directors, including requiring existing independent directors to choose new ones with minimal input from the asset manager. However, the revamping wouldn't change the fact that most smaller fund firms initially must rely on management's friends or acquaintances.

Fund mergers forecasted in Taiwan
From The Wall Street Journal
New funds offered by Taiwan mutual fund management companies are restricted, limiting choice among consumers, stunting the industry's growth and casting doubt on the seriousness of government plans to promote itself as a regional financial hub. Mutual fund companies that have been restrained by the rules are struggling to differentiate their products and find new customers. Industry experts say this will result in many mergers in the future. The key problem is that regulators have pressured companies to withdraw applications for new mutual funds that invest in overseas shares.

International funds turn up the heat
From The Boston Globe
When domestic markets do well most investors keep their money at home. This has been the case in the past decade. Mutual funds that invest in overseas stocks have less than 8% of the money in equity mutual funds overall, according to Lipper Analytical Services. Industry experts say that all this is all about to change. Between 1994 and 1998 the typical international fund underperformed the typical American fund. In 1999, however, that was not so. As of early November, the average international fund was up 18% compared with 11% for the average domestic fund, according to Lipper. Investors have taken noticed and invested money into some of the hottest international funds, including Janus Worldwide and Fidelity's Japan Small Company fund, which is up an astonishing 203% this year.

Consumer advocates question Hancock's public plan
From The Boston Globe
Consumer advocates are questioning Hancock's plan to go public. As the insurer prepares to convert from a mutual firm owned by policyholders to a Wall Street giant owned by investors, as few as one in five policyholders eligible to own stock in the new firm will actually do so, according to some industry estimates. Hancock wants to compensate its least profitable policyholders with cash instead of equity when it reorganizes. In the end about 20% of Hancock's 2.9 million eligible policyholders will own 70% of the new company. Institutional investors, who will buy Hancock stock for mutual and pension funds, will own 30%.
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The Boston Herald