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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Interesting read! For the first time today, I noticed that Morningstar has started to include shorts on their portfolio analysis pages. For example, take a look at this:
http://quicktake.morningstar.com/FundNet/Portfolio.aspx?Country=USA&Symbol=IOTIX#anchor1
When you click on the top holdings, you now see both long and short positions:
http://quicktake.morningstar.com/FundNet/Holdings.aspx?Country=USA&Symbol=IOTIX&fdtab=portfolio
Still, there are improvements to be made, but this is a step in the right direction.