The Investment Company Institute endorsed the Securities and Exchange Commission’s recently approved action aimed at making fund advertisement more balanced.

"We applaud the SEC for strengthening and improving the rules governing mutual fund ads," ICI president Matthew Fink said in a statement. "Overall, these changes will produce important and visible benefits for millions of individuals. In particular, we fully support the SEC's goal of ensuring balance in advertisements that include information about a fund's past performance."

On Wednesday the SEC approved a rule requiring mutual fund companies to advertise a phone number or Web site where investors can go to get more timely information on performance. Most advertisements currently contain performance for the previous 10-, five- and one- year periods and several others include year-to-date numbers. However, the figures often lag by a few months, dating back to the end of the most recently completed quarter. The new requirement calls for all the numbers on the Web site or available by phone to be as current as the end of the most recent month.

The fund companies will also have to make it clearer to investors that past performance is not an indicator of future performance. They will have to detail more of the fund’s risks, costs and goals as well. The most recent requirement came about as regulators had become increasingly worried that lofty numbers recently promoted would create unrealistic expectations, the same problem that got investors in trouble back when the bubble burst a few years back .




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