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Mutual Funds
Re: Tracking Mutual Funds Without Ticker Symbols

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By Littlechap
April 26, 2004

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Hi Rocannon

Does anyone have a suggestion for tracking a mutual fund which does not deign to provide a ticker symbol? Is it common practice not to provide a ticker symbol?

The nature and legal status of "mutual funds" is more complex than most people realize -- and unfortunately, beyond my ability to describe. The bottom line is that yes, there are securities offered by financial firms that use the term "mutual fund" but which do not have tickers and which are only available by direct purchase through the parent company, through an institutional relationship (like your 401K plan) or through a handful of authorized agents, some of them operating as "investment advisors."

Anyway, as far as I know, a ticker is used for reference on some sort of trading platform (like the NYSE or Nasdaq) and is obviously pointless if the fund does not trade through such a platform. It does not mean the fund is bad or good. But it sure does mean that you will have a harder time getting free and easy access to information, or especially, to third party opinions like Morningstar or others.

I have a large choice of mutual funds in my 401K, and for one of my choices I picked a "Total Stock Market Index" fund. Apparently, the fund company does not give this fund a symbol.

Coolprash gave a good answer. If it is truly a total stock market index fund, then it should be similar to VTSMX or WFIVX in behavior. The issues with an index fund are: 1) tracking error and 2) expenses. The fund company should provide some data to help you evaluate those.

...This buys N units of the fund, at the time when the purchase is settled - at least, so they tell me. But how do I know there isn't some funny business going on during the buying process if the price per unit is not provided publicly? How do I know "they" aren't just cooking up some price and then taking a slice of my money off the side? "They" could be making millions just by slicing off a few pennies here and there. Well, it's not pennies I'm concerned about, I just want to know what I'm buying and how much it costs. Seems fair to me!

And to me, too.

I think the simplest answer is that this very question -- based on this same message -- should be sent to your employer's HR department, with copies to the head of HR as well as the 401K plan administrator, and maybe the CFO. (Standard practice in my book: get different executives looking over each others' shoulders; make company politics work for you! <g>)

The questions are reasonable. With my mutual fund transactions, I always know at the end of the same trading day what my per-share price will be. Most funds settle the next day; I think I own one that takes longer because it's international, but beyond that there should be no nonsense.

Of course, you will get some flak if you sound like you care about the price on Monday versus the price on Thursday or whatever. They'll label you a "day trader" or something. ;-) Seriously, you can lose hundreds of bucks by the timing of the trade, and it is conceivable that some middleman pockets part of that by choosing arbitrarily how to time the purchase.

Maximum transparency is a goal as the SEC prods and pokes the entire mutual fund industry nowadays, and it should be no different for the funds you're being offered. In my opinion.

Hope this helps!


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