Fund Management, Do-It-Yourself Style
You, yes, you, can be a mutual fund manager. Fund companies are lining up to give you a chance, but whether that's a good thing is another matter, although at least one of the do-it-yourself funds is handily beating the
IPS Funds, for example, a small outfit in Knoxville, Tenn., has filed preliminary paperwork to launch the IPS iFund, which will not only show shareholders its portfolio online in real time but also let them decide what stocks to buy or sell via an online voting system. Wannabe Wall Street titans will even dictate how many shares should be bought or sold, according to the filing, which schedules the fund's launch for October. IPS folks, who didn't return a call for comment, might pick some stocks initially to get the ball rolling, but after that they'll primarily just officiate, making sure the fund doesn't stray from its broad mandate, according to the filing.
The new fund is the latest in a growing crowd that lets investors see their fund's current portfolio online and, to greater or lesser degrees, help decide what stocks should be there. While this new crop challenges the fund industry's widespread reluctance to provide frequent full portfolio disclosure, it also chips away at something that doesn't seem so wrong-headed: the professional manager.
"This is either going to go down as the dumbest idea in the fund industry, or it's going to be broadly accepted," says Jonas Max Ferris, co-founder of MaxFunds.com, a fund-tracking Web site. "It's hard to say which yet.""It's an interesting marketing concept, but not necessarily a great investment concept," says Morningstar senior analyst Scott Cooley. Like them or not, the list of no-load audience-participation funds is growing and they're not all the same. Each has its own way of measuring and acting on what investors want. Last August, MetaMarkets.com
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