The December 2001 issue of Fund Democracy Insights reviews the
SEC's concept release on managed exchange-traded funds and the flaws in the
exemptive application process that it reveals; the NASDR's requirement that
ETF's market price (as opposed to NAV) performance be included in ETF ads;
and the significance of self-selection by fund shareholders for mutual fund
rules and securities regulations generally.
Table of Contents - December 2001
Managed Exchange-Traded Funds . .. . . . . . . . . .
. . . . . 1
ETFs and Performance Advertising . . . . . . . . . .
. . . . . . 6
The Influence of Self-Selection .. . . . . . . . . .
. . . . . . . . .10
Worth Reading on the Internet . . . . . . . . . . .
. . . . . . . . 16
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Links to resource materials (.pdf files require Adobe Acrobat
for viewing):
Managed Exchange-Traded Funds
Actively
Managed Exchange-Traded Funds, Investment Company Act Release No. 25258 (Nov.
8, 2001)
Exchange-Traded
Fund Assets, Investment Company Institute (October 2001)
Frequently
Asked Questions About Exchange-Traded Funds, Investment Company Institute
William
J. Bernstein, Tangled WEBS, Efficient Frontier (Spring 2000) (finding
that Barclays country iShares trailed their country benchmark indexes by an
average of 1.81 percentage points)
Exchange-Traded
Funds News Archive, morningstar.com (collection of links to stories about
managed ETFs)
Lee
Barney, Actively Managed ETFs: Coming Soon to an Exchange Near You?, TheStreet.com
(May 24, 2001) (discussing concerns that managed ETFs are more likely to trade
at premiums/discounts to their NAVs)
Actively
Managed ETFs: Theory or Reality?, Mutual Fund Cafe (June 5, 2000) (relating
comment by Paul Roye that specialists need to know the securities in an ETF's
portfolio in order to hedge their positions)
Stewart
Donaldson, Exchange Traded Funds: A Brief Guide (May 18, 2001) (discussing
challenges presented by actively managed ETFs)(.pdf file))
John
Spence, Salomon Releases ETF Premium/Discount Study, indexfunds.com (Oct.
23, 2000) (reporting that a Salomon Smith Barney study of the trading of ETF
shares found that shares of ETFs tracking domestic indices had an average
bid price that was a .17% discount to the ETFs' respective estimated intra-day
NAVs, as recorded at random points during the trading days in September 2000)
Frank
Stanton, The Time Isn't Right for Actively Managed ETFs, morningstar.com (June
13, 2000)
Managed
ETFs in Germany:
ETFs and Performance Advertising
Exchange-Traded
Fund Performance, NASDR Regulatory Short Takes
Documents
related to Hearing Request on Barclays ETF Application:
Documents
related to SEC Mutual Fund After-Tax Performance Rule:
The Influence of Self-Selection
Susan
Christoffersen and David Musto, Demand Curves and the Pricing of Money Management
(upcoming in Review of Financial Studies (2002)) (Nov. 23, 2001)
Worth Reading on the Internet
Stephen
M. Cutler, Remarks before the Investment Company Institute, Washington D.C.
(Dec. 6, 2001) (discussing advisers' supervisory responsibility for subadvisers'
compliance)
Paul
F. Roye, Remarks before the Investment Company Institute, Washington D.C.
(Dec. 6, 2001) (discussing, among other things, convergence of securities
products and services)
Harvey
L. Pitt, Speech before the ABA's Committee on the Federal Regulation of Securities,
Washington, DC (Nov. 16, 2001) (discussing SEC review of policy of giving
informal advice)
President's
Commission to Strengthen Social Security (Dec. 11, 2001) (describing three
models for offering personal investment accounts in connection with Social
Security reform)(.pdf file)
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