By Nick Stride
Friday 29th November 2002 |
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FundSource last month drew industry and investor attention to the "distortionary" practice and has since been talking to the industry's self-regulatory body, the ISI (Investment Savings and Insurance Association), about drawing up rules.
In an update this week FundSource said "a number" of fund managers had re-evaluated the sustainability of their policies and had reduced the level of tax losses included in unit prices, leading to fund price reductions.
In one previously reported case a manager dropped its fund price 20% overnight.
The September survey covered 200 retail unit trusts and 21 managers of whom two thirds had priced in tax losses.
FundSource said the managers' move indicated a wider section of the industry was moving to "a more prudent approach" to tax loss accounting.
But it was talking to those managers who hadn't moved. Depending on the outcome of those talks, "it may be appropriate for FundSource's qualitative fund ratings for some funds to be amended," it said.
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