The Securities and Exchange Commission’s proposed two- to four-page mutual fund prospectus profiles will only provide investors with the “quick-and-dirty lowdown,” charges Dow Jones columnist Chuck Jaffe. “It seems a bit inappropriate to have investment decisions based on information that can accurately be called ‘quick and dirty,’ rather than ‘thorough and complete,’” Jaffe said.

In particular, the rules on descriptions of investment strategy and investment objective do not require a fund to reveal how much cash a manager can hold. “As the current market conditions have proven, that’s a big deal,” Jaffe said. “A manager who has stayed fully invested is following the marching orders laid out by the fund’s name, but isn’t necessarily protecting shareholders from pain.”

Also, since the prospectus profile doesn’t list funds’ top 10 holdings, fund companies should be obligated to tell investors if there is any overlap between funds.

Lastly, Jaffe would like to see funds required to describe the type of investor a fund would be best suited for.

“Alas,” Jaffe concludes, “those helpful items won’t be in the new prospectus. It’s just the same old stuff served on a smaller platter.”

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