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Sarah O'Brien, Mercy, mercy, Mercer, why tilt at windmills? Investment News (Sep. 11, 2000)

Abstract: With a somewhat skeptical tone, O'Brien describes Fund Democracy's goal, in Mercer Bullard's words, to "make mutual funds the products that shareholder want them to be." She also discusses Fund Democracy's plan to offer an information, analysis and commentary product, coupled with a fund screening tool, that will enable shareholders and their advisers to evaluate non-performance aspects of mutual funds.

In the article, Paul Roye, director of the SEC's division of investment management, comments that Bullard "is trying to create a kind of vehicle for investors to weigh in on some of these issues. We can always expect to hear from the industry, but we don't always hear from consumers or investors on the issues." Roye said that Fund Democracy's portfolio disclosure petition dovetails with the SEC's hit list.

While O'Brien characterizes the targets of Fund Democracy's initiatives as windmills, and its battles as "quixotic," shareholder groups apparently are taking the initiatives more seriously. Thus far, the Financial Planning Association; ten consumer groups, including the Consumer Federation of America, Consumers Union, and Consumer Action; and the National Association of Investors Corporation have filied portfolio disclosure petitions similar to Fund Democracy's. The AFL-CIO has announced that it also plans to file a petition, and other groups are expected to follow suit. The SEC staff already has acquiesced to one of the petitioners' requests, and is expected to take action on the other requests early in 2001. As a result of an earlier initiative implemented by Fund Democracy and the Consumer Federation of America, Barclays Global agreed to provide additional disclosure about its exchange-traded funds on its website.

Tilting at windmills seems to be catching on.