Mutual fund executives are taking stock of what expanded trading hours could mean to their back-office operations.

In a survey of 200 fund management companies, sponsored by Straus Corporate Communications of New York, most fund executives said they do not expect after-hours trading to offer expanded opportunities for growth. Instead, after-hours trading will probably lead to expanded trading desk hours, altered schedules for portfolio managers and possibly changes in daily fund pricing routines, said some fund company executives.

"Extended hours are not expected to have a positive impact on growth prospects, and will, in fact, involve considerable cost in the form of operational changes," said Irving Straus, president of Straus Corporate Communications.

Fifty-three percent of respondents expect extended trading hours to have no effect on their funds, while another 42 percent of industry executives are now reserving judgement.

"It doesn't appear that it will change anything at all," said Brandon Joel, vice president of the Thomas White Funds Family in Chicago which has three funds and $72 million in assets under management.

Twenty-three percent of respondents said they expected after-hours trading would hurt mutual fund sales. None of the fund executives surveyed believed that a second trading session would enhance the growth potential of their fund complexes.

More than one-third of fund managers surveyed, however, anticipate they will need to revise trading desk staff schedules. In addition, 27 percent of those surveyed believe portfolio managers' hours will need to be changed to accommodate extended trading hours.

"We have talked about ways to use existing resources," said David Capurro, portfolio manager and equity desk manager at Franklin Resources in San Mateo, Calif. "To date we haven't had to change anything."

Franklin, like many mutual fund managers, frequently executes fund trades via institutional trading systems such as Instinet, a Reuters Group, PLC company, or other electronic communications networks that electronically match institutions' buy and sell orders in an anonymous environment.

"If there was more volume (in after-hours trading) we might want to participate," Capurro said.

For Franklin, greater participation in after-hours trading markets would probably mean staggering the hours of its five current equity traders Capurro said. But, he does not expect volume to increase significantly.

"I think after-hours trading will remain small and retail," he said. "Competition is fueling trading to go to 24 hours, but I don't think there's a need for it."

Some fund managers are ignoring the existence of the fledgling after-hours market altogether.

"These markets are not mature enough and there's not enough liquidity," said Bob Bacarella, president of Monetta Mutual Funds, a family of seven no-load funds in Monetta, Ill. "It's currently a retail-oriented market." Moreover, Bacarella opposes the development.

"I am personally against it," he said. "It's inspiring retail investors to gamble."

Some funds are wondering if they will need to rethink their daily pricing schedules with after-hours trading. Most mutual funds price each of their fund's shares once per day, usually after the close of the stock market at 4:00 P.M eastern time.

Thirty-eight percent of those surveyed expect changes in their closing price routine. But, this expectation seems to be concentrated among small fund executives.

Neither American Century Investments of Kansas City, Mo. nor Fidelity Investments of Boston plan to change their current 4:00 P.M. daily fund portfolio pricing in response to after-hours trading.

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