Newspaper article THE JOURNAL RECORD

Top Mutual-Fund Manager Plans Stock Split

Newspaper article THE JOURNAL RECORD

Top Mutual-Fund Manager Plans Stock Split

Article excerpt

SHORT HILLS, N.J. -- Veteran portfolio manager Michael Price is making a push to attract even more assets to three of his top- performing mutual funds.

Price is proposing to reduce the share price of his Mutual Shares, Mutual Beacon and Mutual Qualified funds, which manage a combined $15.9 billion in assets, by issuing new shares to existing shareholders.

In Price's plan, holders of Mutual Shares Fund, for instance, will receive five new shares for each share they hold on Jan. 31. This means investors will own five shares of Mutual Shares Fund, each worth about $18.68 at Tuesday's close, instead of one share worth $93.42. The value of shareholders' accounts won't change as a result of the stock split. Still, Price said a larger number of prospective investors may direct assets to his funds since their share prices will be lower. "John Q. Public likes to buy funds that are lower in price than $100 a share," said Price, who works in Short Hills. "Most funds are at $10 to $30 a share, not $100." In a letter to shareholders, Price's fund group, Franklin Mutual Series Fund Inc., said the proposal to issue more shares was made "in response to concerns expressed by various existing shareholders, prospective shareholders and members of management that the funds' share prices were higher than the norm in the mutual fund industry." That's hyperbole, said Joseph Tigue, managing editor of Standard & Poor's Corp.'s Outlook, a weekly investment advisory publication. "This is more a marketing move than anything else because Price must be hoping the lower share price will attract more investors," Tigue said. Stock splits are rare in the $3.5 trillion mutual fund business. The directors of 11 mutual funds approved stock splits in 1996, compared with just three fund splits in 1995, according to the research group Lipper Analytical Services Inc. In contrast, the New York Stock Exchange said about 200 listed companies split their stocks in 1996. Stock splits are uncommon for mutual funds because, with mutual funds, the minimum investment is always in dollar terms so the price of the shares is secondary. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.