FundAlarm - Highlights & Commentary Archive

Highlights and Commentary

By Roy Weitz

(Originally posted October 1, 2003) [Archive Table of Contents]

If you read FundAlarm, there's a good chance that you also follow other financial news, and if you follow other financial news there's almost no chance that you missed the recent mutual fund scandal. For the few readers who might be returning from Camp X-Ray, or were otherwise out of circulation during September, here's what happened: New York Attorney General Eliot Spitzer uncovered evidence that four mutual fund companies essentially sold certain trading breaks to a large hedge-fund investor. In the process, Spitzer alleges that all of the fund companies either broke the law, broke their own internal rules, or both. Based on e-mails that Spitzer obtained, Bank of America's Nations funds allowed the hedge fund (Canary Capital Partners) to buy mutual funds for up to five hours after the stock market closed, and the hedge fund was still obtain the net asset value for the preceding day. This practice is out-and-out illegal. Nations and the other three fund families (Janus, Strong, and One Group/BancOne) also allowed Canary to make market-timing trades in several of their funds. In all cases, the fund companies had written policies that discouraged this kind of trading, and it's safe to say that no ordinary investor would have been able to negotiate the same type of trading privileges.

Our best explanation of why this scandal is so disturbing: Each of these four fund companies made a conscious, careful, even cold-blooded decision to betray the interests of fund investors in exchange for a monetary reward. There have been fund scandals before, but we can't think of another scandal in which fund companies took steps solely for their own gain that were certain to cause investor losses.

Best example of fund shareholders being sold out in the name of corporate gain:

This is an excerpt from a Janus internal e-mail ("JCG" stands for "Janus Capital Group"), in which marketing people discuss the possibility of allowing Canary to make market-timing trades contrary to the anti-timing policy stated in the fund's prospectus. The deciding factor in this person's mind is "increased profitability to the firm," without even a mention of shareholders' interests.

Best explanation of how fund shareholders are hurt by market timing:

This type of timing is most popular in "international-stock funds whose next-day returns can be anticipated because the funds calculate their daily share prices using 'stale' stock prices. The fund prices set at 4 p.m. Eastern time are sometimes based on closing prices in Asia more than 10 hours earlier. If the U.S. market has risen strongly, suggesting Asian stocks will follow, an investor puts in an order to buy an Asian-stock fund shortly before the 4 p.m. order cutoff in the U.S. and enjoys the Asian-stock gain the next day."
Source (for chart and quote): "'Timing' at Mutual Funds Can Cost 2% a Year," Karen Damato, The Wall Street Journal, September 19, 2003

Best way to stop market-timing in international funds: Fair-value pricing. In the example above, the fund company used "stale" Asian stock prices on Day One. If the fund company had instead valued the Asian stocks to reflect Day One activity in the U.S. markets, the opportunity for a quick profit would have disappeared. Fair-value pricing can be tricky, and it raises some important fairness issues of its own, but fair value pricing can work if the industry wants it to. Why isn't the SEC giving detailed guidance on fair-value pricing, right now? Why isn't the Investment Company Institute calling for a committee to study and implement fair-value pricing practices, right now? Almost a year ago, an academic observer looked at fair value pricing, and he concluded that fund companies intentionally dragged their feet on fair-value pricing because they wanted the freedom to selectively enforce their market-timing rules -- in other words, they wanted to allow market timing when it suited them.* That observation has proven prophetic. The best thing you can do right now: Invest only in international funds that actively practice fair-value pricing (you may be able to tell from the prospectus).
* "Who Cares About Shareholders? Arbitrage-Proofing Mutual Funds," Eric Zitzewitz, October 2002

Best explanation of how domestic and junk-bond funds can be market-timed: We're all still learning about this. But just as a stale mutual fund share price is the key to international market-timing (above), a stale price also seems to be required to market-time domestic and junk-bond funds. A domestic fund could have a stale share price if it trades in small or mid-cap stocks with limited liquidity. When liquidity is light, "the spread between what investors are willing to pay for these stocks -- the bid -- and what others are willing to sell them for -- the ask -- can widen."* If a fund owns a stock that hasn't traded for several hours before the market close, a market-timer might be able to detect a pricing inefficiency in this issue. By purchasing the fund before the market closes, and unloading it after the stock price adjusts (presumably upward) to reflect its value as of the next trade, the market timer could lock in a small profit. Junk bonds can sometimes go several days, or even weeks, without trading, so market timers have even greater opportunity to detect -- and take advantage of -- stale prices that may be embedded in junk-bond funds. To make either timing strategy work, the market timer must know the current holdings of the target fund. It's clear that Strong provided this information to the market timers, and it can be assumed that the other fund companies did so as well. Of course, the vast majority of individual investors have no way to access current portfolio data, and this unequal access to information has become the mini-scandal hidden within the larger scandal.
"How Domestic Funds Can Be 'Market Timed,'" Ian McDonald, online.wsj.com, September 16, 2003

Best way to respond to offers of restitution by the fund companies involved: Deep suspicion. All of the implicated fund firms have offered to refund investor losses after they hire people to investigate what they did wrong (except OneGroup, which hasn't offered to hire anybody). But restitution alone, without strong penalties, encourages a game of ethics roulette. If a firm engages in illegal or unethical conduct, and its number doesn't come up, it gets to pocket its ill-gotten gains. If a firm is caught, it simply returns what it attempted to rip off, and it's no worse off than when it started except, perhaps, for a token financial penalty from the SEC or some other regulator. This is unacceptable. If deterrence means anything in the fund world, the firms involved in this scandal need to be hurt financially, people need to be fired, and the folks responsible for the late trading at Bank of America need to go to jail (Bank of America has already fired several people, the others apparently haven't). Mutual fund columnist Chuck Jaffe has suggested that the offending firms be punished by having their management fees frozen for a period of time. We would take this punishment further. If Spitzer's allegations are proved, we suggest that each firm involved in this scandal be required to cut its management fee across the board by 25% for a year, and then have its fees frozen for another year or two. This kind of punishment would put money back directly into investors' pockets, and it would represent a significant financial hardship for the malefactor firms.

Leading candidate for the FundAlarm Weasel Award: Dick Strong, of the Strong funds. It took Strong 23 days even to offer restitution to his shareholders (the other firms offered it within about five days). But there's less to Strong's offer than meets the eye. In a September 26 letter, Strong finally said that he will make the "appropriate reimbursement" if an investigation determines that the Canary transactions "adversely affected" investors in the four funds referenced in the complaint." But it also looks like Strong plans to apply some kind of "disruption" standard, and if the investigation finds that market timing didn't "disrupt" these funds we're betting that Strong won't pay anything. The other three fund firms clearly stated that they would reimburse the "monetary impact" or "damage" from the timing activities, without exception. Strong needs to stop using weasel words and agree to pay for all the losses he caused, whether or not someone concludes that his funds were being "disrupted" by market timers.

Best indication that fund directors were, as usual, useless appendages: Consider the following extraordinary chart, which tracks monthly cash inflows and outflows, as well as net flows, at Nations International Equity:

What you have here is a three-and-a-half year pattern of symmetrical monthly inflows and outflows, with virtually no net increase or decrease in assets under management. Study this chart for a minute, and you realize that it's the perfect visual representation of a mutual fund being exploited by market timers. If this information was available to Max Rottersman, of FundExpenses. com (he's the person the person who created the chart), why wasn't it also available to the directors of this fund? Or, here's a scary thought: Maybe this information was made available to the directors, and they either ignored it, or didn't know how to interpret it.
Source for chart: "Fund of Information" column, Erin Arvedlund, Barron's, September 8, 2003

Best estimate of what this scandal has cost investors:

"Eric Zitzewitz, an assistant professor of economics at Stanford, found that an investor with $10,000 in an international fund would have lost an average of $110 to market timers and $5 to after-market traders in 2001. His research, which was cited in Spitzer's complaint against the firms, shows that average losses in 2003 appear to be at roughly the same level."

Source: "Don't Dump Your Funds. Not Yet, Anyway," Amey Stone, businessweek.com, September 17, 2003
If Zitzewitz is correct (and some estimates place the losses much higher), the cost of the scandal is equivalent to an increase of up to 1.15% in each fund's expense ratio.....This means that the effective expense ratio at many of these funds was approximately double the stated expense ratio, due entirely to activities that were encouraged and approved by the people who manage these funds.

Best estimate of what Janus' reputation is worth:

"Based on reports from Janus, the firm evidently made relatively little money from its relationships with market timers. [Girard] Miller [Janus COO] has said that market timing affected up to one-half of 1 percent of Janus's $150 billion in assets under management, or about $750 million. And no more than 0.65 percent of that was paid in management fees, he noted.

So Janus risked its reputation for at most $5 million -- pocket change for a robust company with net income of $300 million in 2001 -- but perhaps attractive lucre for a pressured, newly public business struggling to better its $85 million take in 2002.

Source: "Janus struggles to regain trust," Jonathan Burton, CBS.marketwatch.com, September 17, 2003

Best unanswered question concerning Janus fund managers: Did the sleaze fallout from market-timing cause the recent departure of three Janus fund managers? (Warren Lammert resigned as manager of Janus Mercury in February, Helen Young Hayes left Janus Worldwide in June, and Sandy Rufenacht bailed out of Janus High-Yield in July.) Two of these funds (Mercury and High-Yield) were implicated in the Janus timing scandal, and Hayes certainly knew what was going on, but Janus says that these manager resignations have nothing to "with the market timing issue."* In the next few months, we suspect that these managers will have plenty of opportunities to give sworn statements, so perhaps the real story will eventually come out.
*Source: Jonathan Burton story, above

Scandal quote that would have been most appealing to Casablanca's Captain Louis Renault: Allan Mostoff, president of the Mutual Fund Director's Forum, said he would be "'shocked and dismayed' if all of the allegations against Bank of America and the other firms named by Spitzer were true."
"Nations Fund Trustees Say They Didn't Know Hedge Fund Owner Was Their Client," Sarah Jane Tribble, The Charlotte (N.C.) Observer, September 19, 2003

Best advice from a journalist about what to do with funds affected by this scandal:

"If you wouldn't buy these funds again today, you have to seriously question why you still own them."*
Susan Tompor, of the Detroit Free Press, has said that investors face a "seethe or sell" decision. Well, we're not into seething. If we owned a fund from any of the firms involved in this scandal, there's almost no question that we would have sold it already, and invested the proceeds in a comparable fund from a more respectable family.
* "Should investors flee these funds?," Chuck Jaffe, CBS.marketwatch.com, September 17, 2003

Best reasons for NOT selling funds affected by this scandal:

If you have relatively large built-in capital gains, you may want to hold your nose and continue to hold these funds. Otherwise, you could face a painful tax bill.
If and when these companies make their pathetic restitution, you might need to be a fund shareholder at that time in order to collect. Or, you might be able to get your restitution directly, by participating in one of the many class-action lawsuits that have been filed against all of the fund companies involved.
If you own one of these funds through a retirement plan, and you have no other choices, you're almost certainly better off staying than course than getting out of the stock market entirely. But you might talk to your plan administrator, and gently suggest that he or she consider the legal implications, as a fiduciary, if one of these tainted companies has further problems. Many plan administrators have figured this out already, so funds from these families could gradually start disappearing from corporate retirement plans.*
This scandal almost certainly hasn't run its course. If you sell now, and move your investment to another fund family, it's possible that your new fund could be Spitzerized, too.

* "Your retirement plan could personalize the fund scandal," Chuck Jaffe, boston.com, September 25, 2003

Best advice for finding a fund or fund family that isn't trying to screw you:

They actively practice fair-value pricing (above), or unequivocally state that they do not allow timing.
They keep fees low, which is some indication that they generally play fair with their investors.
They have a history of closing funds before they get too large, which is some indication that the fund values long-term relationships over short-term profit.
They communicate with shareholders well and often.
The fund manager, principals of the fund company, and fund directors have significant personal investments in the firm's offerings.

"Pick a fair fund to bet on," Sandra Block, USATODAY.com, September 11, 2003

List of fund companies that meet some or all of the requirements, above: Vanguard, Wasatch, Clipper, Longleaf, Weitz, Oakmark, Tweedy, Browne, Bridgeway, American, TIAA-CREF.....Unfortunately, given the current climate, we need to add: No guarantees from FundAlarm about any of them.

Lowest expectations for mutual funds, by someone who should know better: Sheldon Jacobs publishes a well-known mutual fund newsletter, and here's what he recently listed as "examples" of the "inherent integrity" of mutual funds:

"...it is common to see fund management closing funds that have grown so large performance is endangered even though it reduces their profits. We see managers investing in their own funds. We read annual reports that discuss performance and market conditions frankly."*

Golly, Mr. Jacobs, we even see fund managers who use soft dollars and 12b-1 fees for the purposes they were intended, and they all provide free account statements.....This is an industry I could love!
* "Stay or sell," Sheldon Jacobs, CBS.marketwatch.com, September 22, 2003

Best indication that this scandal may be more widespread than anyone (except Spitzer) imagines: Here are two discussion board postings at MutualFundsnet.com, dating from last November:

And the reply:

Yes, folks, you're reading this correctly. In a public forum, "Seth Fox" is offering to find funds for market timers that will allow illegal late trading, and Edward Stern -- head of the Canary hedge fund, who was nailed by Spitzer -- is publicly expressing interest in breaking the law (he even provides his real office phone number). If these two wheeler-dealers are so casually and openly discussing this kind of illegal activity, it seems certain that late trading -- and who knows what else? -- was being discussed in dozens of private places as well.
"Now, Mutual Funds Under Fire," Robert Frank, The Wall Street Journal, September 4, 2003

DEEP BREATH. END OF SCANDAL COVERAGE, FOR NOW.
(BUT BE SURE TO SEE OUR NEW SCANDAL ARCHIVE, IMMEDIATELY BELOW)

Historically, when fund companies get in legal trouble, the scenario usually runs like this:

The company does something illegal
The SEC catches them
The company "neither admits nor denies guilt"
The SEC slaps the company with a trivial fine or penalty
The company gets some bad publicity
The company squirms for a few days
A month later, nobody even remembers what happened

Here at FundAlarm, there's not much we can do to stop ethically-challenged fund managers in the first place, but there's definitely something we can do in the shame and humiliation department.....Starting this month, FundAlarm will maintain a permanent archive of fund companies and fund managers that have suffered legal sanctions, royally screwed up, or otherwise betrayed their public trust (the archive dates from the inception of FundAlarm, in July 1996).....If you own a fund that's underperforming, and our archive indicates that your manager is also a sleazebag, you just might find that it's easier to bail out.....And if you're thinking about buying a fund, our archive could help keep you from supporting a manager whose past conduct doesn't deserve your hard-earned dollars....The FundAlarm archive of mutual fund malfeasance will be called Busted!, and starting next month a link to the archive will appear at the top of each Highlights and Commentary page.....You can view this month's inaugural version of Busted! by clicking here [Note: This link, in the archive, will take you to the current version of Busted!].....You'll note that this first version of Busted! comes to you well-stocked, with ten fund companies that have played fast and loose with the law: Brazos, Nevis, Monetta, Baron (twice), Davis, Thurlow, Heartland, Dreyfus, and Van Kampen (the SEC is still investigating Nevis and Heartland).

It's always tough when scandal strikes your company, and it's especially tough when scandal strikes near the Holiday season.....If you'd like to do something nice for Blaine Rollins, manager of the flagship Janus fund, we've located the "Wish List" that Rollins has posted on the Amazon.com Web site (this is for real, we've only cleaned up some extraneous text and graphics):

Rollins would really like a copy of the surfing movie, "Hawaiian Watermen," but that item appears to be out of stock.....But what about an alternative gift?.....Based on the "Unique facts" that Rollins has entered (right side of screen), it looks like he could also use a handbook on proper punctuation, a Kong dog chew, and better taste in music.

Speaking of musical taste, the Amazon Wish List of fund manager Wally (still no relation) Weitz suggests that he and Blaine Rollins (above) might end up fighting for control of the radio if they ever had to share an office:

Note, too, that Wally is both frugal and disciplined, as you might expect from a classic value investor.....It appears that Wally's been waiting almost three years for this item, and darned if he's going to spend that $11.87 on himself!

It's rare when a mutual fund manager generates dozens of comments on an Internet discussion board, and it's even more unusual when most of those comments are hostile, obscene, and threatening.....Jonathan Cohen, manager of Royce Technology Value, has recently been generating a huge amount of discussion board heat, and here's one of the more printable comments from the Yahoo! board for SCO Group, formerly Caldera International (symbol=SCOX):

"...Cohen is simply pumping the stock because he is on the hook for having purchased the stock on behalf of a fund he manages.

BIG TIME conflict of interest here.

For additional humor segment, consider Cohen's statement as follows:

�These are companies with very good balance sheets and the ability to generate lots of cash flow,� he said.

Yummy, lots of cash flow. We love cash flow. Too bad SCOX barely has any now and will go RED again soon due to falling revenue and rising SG&A. I'm sorry Cohen, but if you place SCOX into that sort of category, I will stay the hell away from your fund.

The underlying issues are fairly complex, but basically it goes like this: SCO Group owns the license to distribute the UNIX computer operating system, and SCO is suing IBM for $1 billion, claiming that IBM used computer code from the UNIX system, without permission, for the freely-distributed LINUX operating system.....LINUX fans view SCO as a weasel and/or extortionist, and they have a rabid dislike for anyone who supports SCO in any way.....Royce Technology Value is one of the largest institutional owners of SCO Group, and Cohen has appeared widely on TV and in print, enthusiastically extolling the virtues of SCO stock (SCO was recently the largest holding of Royce Technology Value, at about 5% of the portfolio).....Even if Cohen were right about SCO, he'd be despised by the LINUX crowd, but Cohen also seems to have been quite lax about disclosing his large ownership interest in SCO at the time he was making his glowing recommendations, and there's strong circumstantial evidence that Cohen's hype is one of they key factors supporting the SCO stock price.....Several denizens of the Yahoo! board have filed written complaints about Cohen with the SEC and Eliot Spitzer's office, and there are confident predictions that Cohen will be the next Wall Street criminal invited to do a perp walk.....As far as we can tell, nobody on Yahoo! has addressed the issue from the mutual fund side, which is this: Cohen positions Royce Technology Value as a conservative alternative in the wild-and-wooly tech world, yet the only major business prospect for SCO Group, the fund's top holding, seems to the chance that SCO will prevail in its billion-dollar lawsuit, or at least be able to settle for some significant percentage of what it is asking for.....If this isn't a roll of the dice, right out of the 1999 tech bubble, what is?.....And with a P/E ratio of 100+, it's difficult to see how is SCO Group an appropriate investment for any kind of value fund, tech or otherwise.
Thanks to "llywrch," who alerted us to this issue via his post on the FundAlarm Discussion Board

Mutual funds have been very, very good to me: This year's Forbes listing of the 400 richest people in America includes a "Cash Machines" section, and that's where all the money managers can be found.....The standings haven't changed much from last year, with no new entries and only one dropout (James Stowers, of American Century).....The wealthiest Cash Machine continues to be Abigail Johnson, daughter of Fidelity CEO Ned Johnson, who's reportedly worth $9.8 billion.....If her wealth were combined with her father's ($4.9 billion) -- and where do you think she got her wealth in the first place? -- the Combined Johnsons would be number ten on the Forbes list, taking the place of Michael Dell.....In fact, the Combined Johnsons would be the only non-Walton, non-computer people in the top ten, except for Warren Buffett.....Here's this year's complete list of mutual fund money bags, along with last year's numbers for comparison:

Name	Fund affiliation	Net worth (2003)	Net worth (2002)	FundAlarm comments
Abigail Johnson	Fidelity	$9.8 billion	$8.2 billion	Being born to a wealthy father? Priceless.
Ned Johnson	Fidelity	$4.9 billion	$4.1 billion	Being born to a wealthy father? Priceless.
Charles Johnson	Franklin	$2.0 billion	$1.7 billion	Being born to a wealthy father? Priceless.
Rupert Johnson Jr.	Franklin	$1.6 billion	$1.3 billion	Being born to a wealthy father? Priceless.
Tom Bailey	Janus	$975 million	$975 million	Sold out just in time, and still can't wipe that smile off his face.
Alfred West Jr.	SEI	$975 million	$825 million	Who?
Michael Price	Mutual Series	$900 million	$875 million	Polo?
Tom Marsico	Marsico	$800 million	$760 million	See Tom Bailey, above.
Richard Strong	Strong	$800 million	$750 million	And he risks it all for a few bucks in the Spitzer scandal? This is why very rich, self-made entrepreneurs have neuroses that you and I can only dream about.
Alberto Vilar	Amerindo	$750 million	$900 million	It's a whole new ballgame...again...and again.
James Stowers	American Century	Didn't make it	$575 million	Has made large charitable gifts, which isn't good for silly lists like this.

Briefly noted:

After more than a year of cogitation, the SEC has issued new rules to govern mutual fund advertising, and if 1999 ever comes around again, the SEC is ready......The new rules require somewhat fresher performance data than current ads (via a Web site or telephone number), and the rules generally require fund companies to put performance data in better context.....Starting March 31, 2004, the effective date of the new rules, fund companies will also be able to "include more timely information in their advertisements," such as information about current economic conditions, which isn't currently allowed in ads because it doesn't appear in a fund's prospectus.....Call us cynical, but this last provision smells like something that fund marketers are already figuring out how to exploit.
The International Organization of Securities Commissions (IOSCO) helps develop standards for securities markets around the world, mostly in small and developing countries (the U.S. Securities and Exchange Commission is a member, and so are the securities commissions of Bangladesh, Mauritius, and the Kyrgyz Republic, among many others).....IOSCO recently produced a report that proposed worldwide "best practices" for mutual funds, and IOSCO asked the Investment Company Institute (ICI), the U.S. mutual fund trade association, to comment on the report.....The ICI generally supported IOSCO's proposed mutual fund standards, with one astonishing exception.....The ICI strongly opposed the use of performance benchmarks for mutual funds.....According to the ICI, "funds should not be required to compare their performance to an index because such a comparison is inappropriate and potentially misleading".....The ICI went on to say that index comparisons are "especially inappropriate in fund advertisements, given the limited space in such communications" .....Having failed to keep benchmarking information from U.S. investors, the ICI seems to view the rest of the world as a blank slate for its backward and misguided mutual fund practices.
Alchemists long ago stopped trying to turn lead into gold, but market-neutral mutual funds still continue to emerge from the laboratories of mutual fund companies.....The latest market-neutral fund is based on technical-chart analysis, and it's cleverly called The Technical Chart Fund.....The fund plans to use a "three-step, top down" approach to investing, with about 40 different charts to analyze market trends, which sounds like a lot of work to produce performance that will almost inevitably disappoint.
"Mutual fund travels 'uncharted' territory," David Hoffman, InvestmentNews, September 15, 2003
Wha' happened? Nobody is saying, and it's possible that nobody even knows for sure, but one thing is certain: The New England Securities Corporation division of Met Life is going to pay out a significant chunk of change (somewhere between $3 and $11 million).....The problem appears to have been caused by MetLife financial advisors who screwed up asset allocations in about 6,000 mutual fund accounts, by allowing risk tolerances to deviate from client-specified limits.....The most likely cause of the problem was advisors who weren't properly trained to use the company's asset allocation software.
"Portfolio Rebalancing Errors at MetLife Are Still a Mystery," Kristen French, financial-planning.com, August 19, 2003
The Investment Company Institute (ICI) is the leading fund industry trade association, and the ICI is funded by membership dues .....According to Forbes magazine, the ICI "uses the money to oppose virtually every pro-investor initiative to come out of the SEC or Congress".....And who pays the membership dues that keep the ICI going?.....Janus says that all of its ICI dues come directly from its funds, and Fidelity acknowledges that a portion of its dues were paid by fund investors.
"The Great Fund Failure" (sidebar), Neil Weinberg and Emily Lambert, Forbes, September 15, 2003
Honest, honey, that big-screen TV is an investment: MBNA Corp., the big credit card issuer, will soon have the ability to funnel credit card rebates into customers' mutual fund accounts.....Look for the first mutual fund company to issue an "affiliated investor loyalty credit card" within the next 18 months or so.
The Van Wagoner funds continue to get a lot of press coverage.....Unfortunately, almost all of it is bad.....The most recent Forbes mutual fund guide singles out Van Wagoner Emerging Growth for a booby prize, noting that its "loopy holdings, an SEC investigation and a dubious fee plan" make the fund one to avoid.....Absolutely no argument here.
Christopher Hellman, Forbes, September 15, 2003
SPARX Investment Research plans to launch the SPARX Japan Fund.....If this offering is successful, the company will reportedly introduce a super-aggressive fund, called SPARX Will Fly.
Conseco Capital Management has changed its name to 40/86 Advisors, and the new name represents the latitude and longitude of the firm's Indiana headquarters.....40/86 narrowly beat out the second-place name, 100/2/1, which represents the odds that Conseco will ever field a lineup of top-tier mutual funds.