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Mutual Fund Trading - Fall 2004

You may have read about the Ontario Securities Commission (OSC) review of the mutual fund industry in regards to frequent fund trading. We would like our clients to understand that we are following the story closely and attempting to differentiate between the media hype and the facts. However, several things are already clear and those are that the majority, if not all of the large investment firms currently have practices in place preventing frequent trading. Also, if frequent trading did occur in the past it is not clear if the impact was negative to long term holders. Our opinion is that it was quite likely a very small impact either way and isolated to a minority of specialty funds. Finally, it is important to emphasize that the situation in Canada on market timing is very different than what we saw in the U.S. In those cases, there were related transactions or activities along with market timing.

At Ming & Associates we would like to assure our clients that we are evaluating any impact that this may have on our recommendations going forward and will keep you informed. Trust, integrity and reputation are at the core of our relationship with you and the products we recommend, and we will work diligently on your behalf on these issues. We believe the large majority of companies we recommend have taken significant leadership on this issue in order to help protect the interests of unitholders and we will be adjusting our recommendations accordingly.

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