S&P Issues Statement on Issues of Market Timing and Late Trading of Mutual Funds
October 27 2003 - 10:55AM
PR Newswire (US)
S&P Issues Statement on Issues of Market Timing and Late
Trading of Mutual Funds NEW YORK, Oct. 27 /PRNewswire/ -- Standard
& Poor's, a leading provider of independent investment
research, ratings, and indices released today the following
statement on the issues of market timing and late trading of mutual
funds: When the current issue of market timing and late trading of
mutual funds broke, mutual fund analysts from Standard & Poor's
cautioned investors to wait for further information before taking
any action. Even given the fact that the situation has obviously
evolved, much still remains to be learned about the breadth and
depth of this investigation -- we may for example learn more about
any role played by intermediaries and distribution channels -- and
we remain committed to our initial position. Clearly, advantaging
one set of investors over another is wrong and should not be
excused. Changes in the industry are already being widely
discussed. While trade associations and regulators will encourage
these changes, Standard & Poor's strongly believes management
of the fund sponsors must lead these changes. Only by demonstrating
rapid and decisive leadership will fund sponsors restore the
public's confidence in their products and services. Some early
signs are encouraging. The president of Bank One, sponsor of the
One Group of funds, has issued two releases outlining specific
steps being taken to remedy the situation. More importantly, he
appears to be supporting these releases with actions. At the same
time, the recent news associated with a member of the Alger group
of funds is disappointing. Standard & Poor's believes that more
information needs to be made available before coming to conclusions
on any specific family or fund. We will be looking to the actions
taken by the fund sponsor, the specific funds affected by these
actions and the sources or causes of the activities. Until these
facts are known, it is difficult to draw specific conclusions.
Standard & Poor's believes that each fund should be judged on
its own merits and circumstances. For example, many fund sponsors
hire other independent money managers who do not have direct
relationships with the sponsor's portfolio managers and analysts
and may not be affected by any issues relating to the sponsor. In
addition, in-house management teams at some fund firms may also
operate largely independently from one another, so that an issue
with a family's growth funds may not affect its value funds, or
vice- versa. As a result, it would be difficult to paint both sides
of such an operation with the same brush. Sweeping generalizations
and impulsive decisions about fund sponsors may result in an
unbalanced portfolio and inadequate asset allocation decisions for
investors, or may lead an investor to move from one fund family to
another based on incomplete information, only to find that he or
she has moved from a fund that was not affected to one that was.
Investors should always closely consider several important factors
when evaluating the merits of a fund. The quality of the sponsor is
an important factor but other factors, including the experience of
the portfolio manager, the adherence to a stated style, the
consistency of a performance track record and the fund's expenses
must also be accounted for. Investors must be afforded sufficient
transparency on each of these issues in order to gain the
confidence necessary to invest. Investing based on a single point
of information can lead to ill-advised judgments. Rather, the sum
of these factors must be taken into account in order to reach an
informed conclusion. Standard & Poor's will continue to closely
follow the actions taken by fund sponsor's management and factor
this into its decision-making. About Standard & Poor's Standard
& Poor's, a division of The McGraw-Hill Companies (NYSE:MHP),
is the world's foremost provider of independent credit ratings,
indices, risk evaluation, investment research, data and valuations.
With 5000 employees located in 20 countries, Standard & Poor's
is an essential part of the world's financial infrastructure and
has played a leading role for more than 140 years in providing
investors with the independent benchmarks they need to feel more
confident about their investment and financial decisions. For more
information, visit http://www.standardandpoors.com/. DATASOURCE:
Standard & Poor's CONTACT: David R. Guarino Standard &
Poor's +1-212-438-1471 Web site: http://www.standardandpoors.com/
Copyright
Mcgraw Hill (NYSE:MHP)
Historical Stock Chart
From Sep 2024 to Oct 2024
Mcgraw Hill (NYSE:MHP)
Historical Stock Chart
From Oct 2023 to Oct 2024
Real-Time news about Mcgraw Hill Financial, Inc. (New York Stock Exchange): 0 recent articles
More Mcgraw Hill Cos The News Articles