veD OF POLICING YOUR MUTUAL FUND TRADER FOR HONESTY.......TO KNOW WHEN THE TRADER IS MARKETING TIMING FOR CHURNING FOR PERSONAL GAIN......
Posted by Vishva News Reporter on June 27, 2004

CHURNING THE POT OF MONEY FOR GREED 
IS CALLED MARKET TIMING 
IS
 paap (SIN)
aARth puruSHaaARth & DHARm puruSHaaARth
CAN GUIDE  INVESTMENT TRADERS
 TO AVOID GREED AND SIN
 AS PER
DHARm.....

Canadian Globe and Mail :

Rapid trading in mutual funds is highly profitable for professional traders. And while it isn't illegal, fund managers have a fiduciary duty to investors to ensure that the fund is run with their best interests at heart. Rapid trading is clearly not in the best interests of long-term investors because it reduces a fund's returns......and investors have no way of knowing whether their mutual funds contain telltale signs of market timing activity.....very serious fault in a government legalized system......

PVAF continues to share the knowledge of mutual funds trading from a Globe and Mail serial on mutual funds trading practices so that YOU can protect and prosper with this knowledge and the knowledge from veD of objectives of life called puruSHaaARth in sNskRUt language and in veD which is SCIENCES OF CREATION AND LIFE......the knowledge contain in veD is an life operation manual for living human life with purpose, goals and objectives based on the rules, regulations and laws of DHARm....DHARm is the operating system in which the entire creation including humans have to take birth, grow, work to sustain and continue the life travels from one life to another in sNsaar meaning cycles of life and death....... ......

Please click on the next line to continue to read the first paragraph above from the 3rd of the serial in Canadian Globe and Mail on mutual fund practices of your traders or you can read the article on the Globe and Mail web site by clicking on the preceding red hilite.....



Spotting signs of market timing...
 tough for the ordinary investor


By KAREN HOWLETT
Canadian Globe and Mail: Monday, June 21, 2004 - Page B6

Investors have no way of knowing whether their mutual funds contain telltale signs of market timing activity.

A mutual fund's annual report contains such information as average assets for the years as well as sales and redemption figures. But that is only part of the picture.

Report on Business used monthly breakdowns of sales, redemptions and transfers in and out of a fund within the same family. Fund companies provide these figures to the Investment Funds Institute of Canada (IFIC), the industry trade group.

IFIC compiles these statistics into a lengthy, monthly statistical package titled Details By Fund Type Report. At one time, IFIC made these reports available to the public by publishing them on its website.

But as of April, 2001, IFIC has restricted access to these reports to mutual fund companies and other IFIC members. For everyone else, IFIC charges $1,000 for a year's worth of data. (Report on Business obtained the reports for April, 2001, through to December, 2003, from industry sources.)

John Murray, head of research at IFIC, said its board of directors decided to start charging for the report as part of a recruitment drive. They wanted to encourage fund companies that were using its services but were not members to join IFIC, he said.

In the process, the public lost access to a rich source of timely data that reveal what's behind a mutual fund's churn rate -- a measure of sales, redemptions and transfers relative to average assets.

IFIC now publishes bare-bones information every month, including a ranking of fund companies, measured by assets under management, and total assets, sales and redemptions for the industry.

Investors can get more information on their fund by wading through its annual report. There, using such data as the table of change in net assets, they can find enough information to calculate an annual churn rate.

But the annual reports do not disclose enough information to allow an investor to differentiate one fund with a high churn rate from another.

The IFIC data used by Report on Business revealed that many fund companies with high churn rates had patterns of monthly transfers in and out that were roughly similar.

In the annual reports, transfers are lumped in with sales and redemptions, so there is no way of seeing how much cash flows in and out of funds within the same family. There is also no monthly breakdown of activity.

Two examples illustrate the point. In the Ethical International Equity Fund last year, cash flows in and out were six times average assets of $3-million, for a churn rate of 606 per cent.

At first glance, the rate appears high. But the fund was excluded from the group singled out by Report on Business because further scrutiny revealed that nearly all of that activity came from sales, which totalled $17.2-million.

Figures for the Templeton Growth Fund, the second-largest mutual fund in Canada, told a different story. Cash flows totalled $11.5-billion in 2002, roughly 1.5 times average assets of $6.4-billion, for a churn rate of 142 per cent. It made the list because sales were only $380-million, while much of the action was from transfers in ($4.9-billion) and transfers out ($5.1-billion).

 



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