New York (March 2, 2004) -- While improving mutual funds' disclosure requirements is a crucial step, it isn't enough -- funds must adopt a new reporting model that is more transparent, according to a white paper by PricewaterhouseCoopers' U.S. investment management industry group.
The paper, “Communicating the Value of Your Funds: A New Model for Transparency in Fund Reporting,” concludes that disclosure alone, although critical, isn't the answer to what investors need and doesn't constitute transparency.
"We do not believe that piecemeal increases in disclosures that separately address individual issues, such as transaction costs and other fees and expenses, are the solution to providing investors with the information they need from those who are managing their money," said Chip Voneiff, national leader of PwC’s U.S. investment management industry group. "To be transparent, information needs to be timely, relevant and user-friendly. Information becomes relevant when it is provided in the context of how it affects the fund's total return.”
PwC said it favors a framework for fund reporting that includes four categories of information: market outlook; value-creating activities; investor protections; and financial results beyond just numbers, such as the components of a fund's rate of return and the impact of actions on return.
-- WebCPA staff
