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The

Investment Company Institute

, the mutual fund industry's trade group, has rejected a call from the portfolio managers of the

OpenFund

and others to require more frequent disclosure of funds' holdings.

The current twice-a-year disclosure standard is "appropriate," ICI president Matthew Fink said Thursday.

The ICI says it has mulled the idea before and found that more frequent disclosure could harm fund performance by tipping off competitors and other investors to a fund's moves.

However, advocates for more openness say twice-a-year disclosure forces investors to make decisions based on out-of-date information and provides cover for "misleading" activities by funds.

"So-called 'window dressing' is well known to be the result of money managers' desire to obscure their true strategy. Why is the fund industry not acting proactively to address this hot-button issue now through more aggressive disclosure policies?" says the letter, signed by Don Luskin and David Nadig, managers of the OpenFund, which posts real-time updates of the fund's portfolio on its

Web site.

The letter also was signed by

Morningstar

research director John Rekenthaler and Thomas O'Hara, chairman of the

National Association of Investment Clubs

, Mitch Ratcliffe, editor-in-chief of financial Web site

ON24

, and Robert Loest, portfolio manager of the

IPS

funds in Knoxville, Tenn. IPS updates its portfolio holdings on its

Web site monthly.

TSC

examined the case for more disclosure in a recent

series of stories.