Advisors Speak Out For More Frequent, Detailed Fund Disclosure.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--May 29, 2001

New Harris Poll for MetaMarkets.com Reveals That Majority

of Fee-Oriented Financial Advisors Believe Increased Fund

Disclosure Would Benefit Their Clients

Financial advisors want more frequent, detailed releases of portfolio holdings for the mutual funds they recommend to their clients, and they see no reason why the fund companies cannot provide it.

These were the findings of a MetaMarkets.com-commissioned study conducted with 538 fee-only or fee-based financial advisors from March to May 2001 by Harris Interactive (Nasdaq: HPOL), a worldwide market research, polling and consulting firm.

According to the study, two-thirds (67%) of fee-only or fee-based advisors believe that having complete lists of portfolio holdings available for their clients' funds more than twice yearly would benefit their ability to monitor and manage their clients' fund holdings. Among this group of advisors that would like more frequent release of complete portfolio data, almost half (45%) believe that monthly releases of complete portfolios would provide the best balance between their informational needs and the desire for privacy on the part of the fund company, while a third (33%) believe that quarterly is the best frequency. Semi-annual release of portfolio holdings is the current standard in the mutual fund industry.

In addition, three-quarters of all advisers (75%) believe that shorter lag times before the release of this valuable data would also benefit their advisory capability. Almost half (45%) of those who would like shorter lag times believe that a 30 day lag would provide the best balance between advisor need and fund company privacy, while almost a quarter (24%) believe that only a 15 day lag is necessary. Currently, a two-month lag is typical in the mutual fund industry.

Almost two-thirds (62%) of all advisors would prefer to receive complete portfolio holdings information in electronic format, while a third (36%) would prefer to have both electronic and printed versions made available.

"Financial advisors today need complete, up-to-date fund holdings data to allocate their clients' assets accurately among funds and individual stocks, but what they actually receive from most fund companies lacks the frequency and level of detail they require," said Donald L. Luskin, CEO of MetaMarkets.com. "Fund companies that rely on advisors to select their funds should consider disclosing data beyond the basic requirements of industry regulation in order to increase their products' appeal. Leading fund analysis tools like Morningstar's Principia Pro(TM) software now give advisors the technical capability to put this data to good use."

As stated above, Securities and Exchange Commission regulations currently require mutual fund firms to provide reports revealing their funds' full portfolio holdings to shareholders just twice per year, with no more than a two-month delay, via U.S. mail. By the time these reports reach the mailboxes of investors, the information often bears little relation to the actual current holdings of their funds. This information gap not only makes it difficult for investors and their financial advisors to compare between funds, but it also makes it nearly impossible to determine if the individual stock and bond investments investors hold outside of their funds are duplicated by or are in conflict with the holdings inside of their funds. In addition, funds that deviate from their stated investment strategies are hard to identify under current standards.

A Harris Interactive study conducted last year for MetaMarkets.com found that individual investors are also hungry for more detail about their mutual funds. Almost two-thirds (65%) of fund investors think that it is important that they or their financial advisor know which stock or bond investments are currently held by their mutual funds. Even more importantly, the vast majority of fund investors (82%) believe that it is important to know what the current investment strategy is behind those holdings.

Background on MetaMarkets.com's Fund Disclosure Advocacy

MetaMarkets.com has been a consistent and vocal advocate for increased fund industry attention to the changing fund disclosure needs of today's investors and advisors. Its efforts began in 1999 with the launch of the first completely transparent mutual fund, OpenFund, and continued through investor research and an open letter to the Investment Company Institute (ICI), the mutual fund trade association. In the May 2000 letter (co-signed by representatives of Morningstar and the National Association of Investment Clubs, among others), MetaMarkets.com co-founders Donald Luskin and H. Davis Nadig called on the industry to consider aggressive changes to "best practices" for fund disclosure to prevent the need for additional regulation by the SEC.

In June 2000, Nadig was invited to speak to the ICI's SEC Rules Committee about fund disclosure. In his presentation, Nadig outlined how new communications technology and increased investor sophistication had created a demand for more frequent, detailed information on fund holdings and strategy, and he urged the ICI to conduct research with fund companies, investors, and financial advisors to determine how "best practices" on fund disclosure might be updated to reflect this changing need. However, in statements to the industry and through the financial media, the ICI claimed that it saw no demand for more information and did not see a need for additional research or changes to current industry standards.

Since that time, polls conducted by Harris Interactive for MetaMarkets.com have uncovered significant demand among investors and advisors for increases in the quality and frequency of fund disclosure, particularly for complete fund portfolio holdings data.

In the summer and fall of 2000, as anticipated by Luskin and Nadig, the SEC began receiving a number of rule-making petitions from large organizations such as the Consumer Federation of America, the AFL-CIO, and the Financial Planning Association demanding an immediate SEC review of industry disclosure regulation and calling for increases in frequency and detail of disclosure. These petitions are currently under review by the SEC.

About MetaMarkets.com

MetaMarkets.com is an aggressive investment management firm that uses innovative shareholder communications technology to empower investors with discerning financial commentary, insightful buy-side research, and real-time information about the holdings and performance of their mutual funds. The firm also facilitates open forums for investment discussion with other investors, analysts and New Economy visionaries.

The MetaMarkets.com Funds, advised by MetaMarkets Investments LLC, include two uniquely transparent mutual funds - OpenFund and the IPO & New Era Fund - which offer real-time access to complete portfolio holdings and focus on converging trends and technologies that are powering the U.S.'s conversion to a New Economy. San Francisco-based MetaMarkets.com was founded in 1999 by Donald L. Luskin and H. Davis Nadig, and was recently named one of Fortune Magazine's "Cool Companies 2000." For more information, visitors can visit the MetaMarkets web site, found at http://www.metamarkets.com.

The Funds' prospectuses, which contain information regarding fees and ongoing expenses, are available at http://funds.metamarkets.com, or by calling 1-877-METAMKT. Read them carefully before investing. BISYS Fund Services, Distributor.