In a move designed to alert investors of usually unreported upon costs, NASD has just proposed that mutual fund companies be required to disclose fund expenses in advertisements and other sales materials that promote performance.

"Mutual fund fees and expenses affect an investor’s return," said NASD Chairman and CEO Robert R. Glauber. "When a mutual fund promotes its performance, it needs to give a balanced picture by disclosing fees and expenses."

If the proposal is approved as is, fund companies would be required to report one, five, and 10-year returns, maximum sales charges and annual expense ratios. The information would have to be in large type. Today, disclosure typefaces in fund advertisements are barely discernable.

The NASD has deeply scrutinized the fund industry as a whole since 2001, most recently looking into how much money managers and other officers make when selling mutual fund shares.

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