Existing mutual fund analysis woefully unprepared for 130/30

Aug 16th, 2007 | Filed under: 130/30

Although there seems to be a lot of sudden interest in delivering 130/30 and long/short funds to the masses, it’s quite apparent that marketing and investor communications are woefully unprepared for these funds.

In a story a couple of weeks ago, Morningstar analyst Todd Trubey proclaimed:

“Supporters include some investors and plenty of marketers who breathlessly describe the 130/30 structure as a breakthrough that will revolutionize investing and amp up returns. Ultimately we think that investors should understand–but look past–the hype and bring a healthy amount of skepticism to the table when judging this group.”

But unfortunately, it seems that neither Morningstar’s fund information, nor the 130/30 fund managers’ very own marketing materials, adequately cover the salient elements of these funds at this point.

Case in point: Trubey mentions the ING 130/30 Fundamental Research Fund (IOTAX) among what he describes as a “handful” of 130/30 mutual funds in existence today.

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