AR, I have two factors that make me disbelieve the concept. I have worked for three cos. that managed mutual funds and knew the managers very well. I was also privy to their trades, as they were to mine. I never saw anyone do any window dressing. I have also rarely seen tax selling except to realize a certain amount of capital gains in a fund that had a promise of income payouts.
The second point is that it makes absolutely no sense. The first and usually the only thing a potential or current client wants to know is how much did you make last month, quarter, year, decade or whatever. If you have performed like a champ, nobody cares what the picture of your fund's holdings look like at year or quarter end. And if you have performed like a chump, nobody cares what the picture of your fund's holdings look like at year or quarter end.
I have always imagined a marketing type pushing a fund that lost 5% last year. "But, look, we own Amazon and Dell and don't own oil stocks." BFD! If you owned those stocks during the year, why didn't you perform better? And if you didn't own them lower, why are you buying them now at the top?
Faced with that environment, the smart marketing guy uses another approach. It may be, "look at one of our other funds," or, "but we just hired a new manager," or whatever. But it is not "look at what we had in our portfolio at year end."
That's my opinion. I am not saying it has never been done. It probably has. But it is not a major phenomena with a lot of money changing hands.
MB |
