The Golden Rainbow Fund, an $82 million balanced fund managed by James Investment Research of Alpha, Ohio, has cut the front-end sales commission on its class A shares from 5.75 percent to two percent, effective Oct. 10, according to an Oct. 11 fund prospectus amendment.
The sales charge reduction was prompted by the fund's poor performance in 1999 and slightly better, but still meager, performance year-to-date, said Diane Rose, a marketing representative for the fund. Brokers that were selling the fund were simply not attracting enough assets, Rose said.
In 1999, the fund returned 3.4 percent, placing it behind 75 percent of its peer funds, according to Morningstar, the Chicago data provider. Year-to-date through Oct. 16, the fund has returned 2.24 percent, according to Morningstar. This is the worst performance the fund has had since 1994, when the fund lost 4.2 percent of its value for the full year, according to Morningstar.
James Investment Research agreed to reduce The Golden Rainbow Fund's sales charge to improve the fund's performance, Rose said.
"We're trying to build assets, and frankly, this fund is not being sold as heavily as the other funds," she said.