SEC Tests Mutual Fund Comparison Tool

Investors would be able to compare funds by cost, strategy and more.
By Lauren LaCapra ,

The Securities and Exchange Commission is testing out a tool that could make online mutual fund shopping much easier for consumers.

The agency has proposed that funds be required to tag certain data electronically that would allow investors to easily compare objectives, strategies, risks, performance and costs. A

prototype

currently has information on more than a dozen funds, though the SEC hopes to ultimately have more than 8,000.

"Investors will no longer need to wade through lengthy documents to find the relevant details needed to compare funds one at a time," SEC Chairman Christopher Cox said in a statement.

While the site is limited in its current form, it could be expanded or modified. It now provides summaries of relevant data, charts of historical performance and a tool to compare up to three funds side by side.

Funds have been submitting the information to the SEC on a voluntary basis since the SEC's interactive-data pilot program began including them in August. Under the proposal, funds will be required to provide the tagged data starting Jan. 1, 2010, and post the same information on their own Web sites.

Last week, the SEC proposed a similar rule that would require public companies to provide interactive data beginning next year for the largest companies and within three years for all public companies.

Visitors can submit feedback on the SEC's proposed rule

via email

. The public comment period ends Aug. 1.

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