There is special interest being paid to the wording on your quarterly update letters from your fund managers that are due soon.

I have had some real fun in the past poking fun at these letters, especially since this market has been a humbling experience for those with inflated abilities. But because of the same legislation that requires corporations to certify the contents of their shareholders reports, the Sarbannes-Oxley Act can be interpreted to apply to fund managers and their teams as well.

If that is the case, these letters might be less conclusive about a fund managers outlook, mistaking those comments as being the same as certified promises. If that happens, this periodic pouring out of the leaders of these funds would be sorely missed. You and I both know that this forward guess about their fund(s) performance is next to impossible to do. The federal act may require that these outlooks at future market movements or equity purchases might be considered opinions or expectations.

Beyond the fun that I poke at these folks, lies the explanation as to why a fund manager has done what he did. And some believe that these notes can keep investors interested in the fund even if the fund hasn't performed well within it's group, or if the fund's style has fallen out of favor. But the S.E.C. is concerned that many fund letters don't go far enough now as it is. Without the necessary explanation of performance, the fund might find this commissions ire a bit more elevated. Good communication is vital and with any luck, encouraged by powerful partnerships, shareholders will take their fund managers to task on not only open lines of information but also on both expenses and performance.

Something like that is happening at Janus. Many of you have heard that the gal at the helm, Helen Young Hayes has left supposedly taking her 956,707 shares of stock, some of it awarded in plenty of time to report it to shareholders in 2002, was instead reported in 2003. On the surface, it looks like another accounting mishap that is almost incomprehensible to the average investor. But one investor doesn't like the act.

Evidently, Highfields Capital Management has taken the fund on, and in doing so, has made themselves representatives for the rest of us who might hold an interest in how things are done at the parent headquarters of Janus. Admittedly, this one would have slipped past me unnoticed. The same could be said for the remaining 91% of us.

Our hope is that they pursue this line of accusation and eventually find that it is only an isolated incident.

[ Close Window ]