Putnam Cuts Fees, Investors Yawn
From The Wall Street Journal
Putnam is discovering that one often gets no credit for doing the right thing. The Boston company is converting "B" shares to "A" shares up to two years early since it has already recouped its sales costs on these funds. The cost in lost revenue to Putnam is estimated at $35 million, yet few fund shareholders seem to care. Lawrence Lasser is quoted as saying that 90% of Putnams fund investors probably don't know about the early conversion and that 60% probably didn't know they were paying the extra fees in the first place. Also, Merrill Lynch Asset Management tapped hired Brian Fullerton as head of risk management. He had been senior vice president and treasurer in charge of risk management at Putnam Investments.

UFS Launches Select Index Funds
From Smart Money
Unified Financial Services is hitting all of the hot themes in the fund industry -- indexing and the Net. UFS is taking a page out of Vanguard's playbook as it launches a new family of six Select index funds. The funds have an annual expense ratio of 35 basis points -- nearly twice as high as those at its Valley Forge-based competitor. UFS is also launching an actively managed Internet fund, Unified Select Internet, which will also have a 35 basis point expense ratio. UFS has specialized in back-office fund work, insurance sales and institutional money management.

Clinton to Call for Hedge Fund Disclosure
From The New York Times
The Clinton administration plans to introduce legislation soon that will give the Securities and Exchange Commission and the Commodities Futures Trading Commission enhanced powers to examine the dealings of Wall Street trading firms, the paper reports. It will also seek congressional backing for rules that require hedge funds to disclose more information about their borrowing and trading practices. The legislation is based on a report from a team led by Robert Rubin and Alan Greenspan. The report mainly recommends that:

• Bank and securities regulators insure that financial companies adopt better risk management practices, saying that the risk management system "broke down" when companies allowed Long-Term Capital to borrow so much money.
• Banks and brokerages houses provide a more detailed summary of their lending to individual borrowers so that both regulators and other financial companies can spot excessive risk building up.
• Federal authorities take action to insure that other countries, and particular popular offshore financial centers like the Cayman Islands, toughen their regulatory policies in tandem with the strengthened U.S. rules.
• Congress speed passage of updated bankruptcy laws that would make it easier for financial companies to allow a hedge fund like Long-Term Capital to collapse without upsetting the entire financial system.

Templeton V. Advisors, Round 1
From The Globe & Mail
How far should fund companies go to keep financial advisors happy? That a question that Franklin/Templeton is having to answer as advisors begin to rebel in the wake of the departure of Michael Price from day-to-day management of funds. The test case is being brought by George Slutchuk Winnipeg, Canada-based advisor who is asking that Templeton Management Ltd. waive its deferred sales charges for his clients who exit Mutual Beacon Fund. "I would have never bought a cent worth of this investment if it were not for the touting of this particular investment manager," Slutchuk told the paper. So far, Templeton has said no to Slutchuk's request. He told the paper that he'll probably pay the redemption costs for his clients himself and move them into something else -- and that his relationship with Templeton has been hurt. Templeton claims that no one but Slutchuk has complained about Price's departure as lead manager of the Mutual Beacon Fund, and that there was only an initial "blip" of redemptions.

Fund Mentions
Mark Herskovitz, manager and co-founder of Dreyfus Premier Technology Growth Fund, was treated for dinner and drinks by Multex Investor. In exchange all he needed to do was sit for a Q&A. Sheldon Jacobs, editor of the No-Load Fund Investor, has joined the indexing crowd, says Individual Investor. Rydex Funds is turning up the heat in the sector fund arena, reports TheStreet.com. 

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