Trade group disputes finding on fund fees

According to a poll taken last summer by Pollara Inc. of Toronto, 85% of Canadian mutual fund investors purchased shares through an adviser, and a concurrent study suggested they were getting bad advice. A draft report, “Mutual Fund Fees Around the World,” written by three university professors (InvestmentNews, Aug. 28) claimed that among the countries studied, Canada had the highest average mutual fund expense ratio (2.87%) — significantly higher than that of the United States (1.71%) and Japan (1.99%). Last month, Joanne De Laurentiis, president and chief executive of the Toronto-based Investment Funds Institute of Canada, sent an e-mail to the authors, Peter Tufano, Ajay Khorana and Henri Servaes — professors at the Harvard Business School in Boston, Georgia Institute of Technology in Atlanta and London Business School, respectively — disputing the conclusions of the report. “Regrettably, we have found many Canadian readers and commentators giving the study a ‘fact status’ that you may have not intended and that in its current form it does not warrant,” she wrote. “We would contend that the Canadian circumstance has been significantly misinterpreted in a number of areas within your current draft. “Comparisons made on the basis of 2002 data used in this study are already out of date,” Ms. De Laurentiis wrote. “In the time period between 2001 and 2005, [management expense ratios] are known to have fallen [by] between 3% and 11%, depending on the category.” No response to the e-mail has been received, according to the IFIC. — David Clarke