What was the correct answer for the Value/Growth fund that changed style based on the status of the market. My thought was the investment strategy was not changing so it was appropriate for the fund manager to not disclose everytime they changed the investment style. So the key to the question was recognizing the subtle wording change from investment strategy to investment style? They disclosed the style shifts in the fund prospectus. No violation right?
i had disclosure had to be made quarterly
i had quarterly as well.
No idea on this one. Thought about it for a while…I put no violation.
i put no violation but the cfa text does clearly state that changes have to be made “well in advance”
Put quarterly…annual is a really long time to hold out to tell a client.
advance - this was a hot point in AMC code
Didn’t the fund state that’s what they actually do? If I state I use derivatives, and don’t for a while…then I do, Do I really have to inform quarterly. So confusing.
I agree with the advance notice, but the initial prospectus informed the investor that either strategy must be utilized, so the investor was aware that the strategy could waver. If it shifted to a new strategy all together, the need to notify investors would be imperative.
question is if the disclosure was material. that is straight from the AMC. i think prudent disclosure would be to say that assets went from all growth to all value asap, even if the long term strategy in the prospectus includes shifting strategies.
how come there are 4 options here? - no violation - disclose in advance - disclose quarterly - disclose annually something’s wrong with the list of answers.
btw, to add disclosure would not be difficult at all to do. i think no violation is = to disclose in advance by most folks. so, quartelry and annually were the other two answer choices
no violation = disclose annually cp0821 Wrote: ------------------------------------------------------- > how come there are 4 options here? > > - no violation > - disclose in advance > - disclose quarterly > - disclose annually > > something’s wrong with the list of answers.
It’s already diesclosed.
See CFAI vol 1 pg 207 under 5.a. Says that managers can take advantage of opportunities if the clients know and that the manager should disclose in the course of normal client reporting (i.e. quarterly)
are you guys serious? This is the fund style, the clients EXPECT and are AWARE that the style is switching from value to grwoth and vice versa. No disclosure necessary. IF the question said ( was going to switch to option strategy to exploit market inefficiencies) or any other strategy, than that would have to be disclosed since clients woudl have to determine if that is what they needed. I remember a practice question where the manager of a growth fund switched to value and his move greatly benefited clients, but even though it benefited clients he was still in violation since the clients hired him to be strictly a grwoth manager, they may have already had their own value managers which would have overweighted them in value.
IH8FSA Wrote: ------------------------------------------------------- > > No disclosure necessary. > I dont think this was an option. I remember there being in advance, quarterly, or annually
Sounds to me like they were asking two things: 1) Do they have to disclose each time? 2) If not, how often do they have to disclose? Answer: 1) They do not have to disclose each time as long as it is in accordance with the fund’s strategy as stated in the prospectus. 2) Clients should receive a quarterly newsletter, and I would expect fund developments to be disclosed in this. I have not looked at this stuff in a while, but that is how we do it where I work.
right on eureka… Look, even if the clients know in advance that things MAY change…they should be told QUARTERLY (according to the text) what actually changed… This is so they can know if there is any total exposure they need to rebalance Simple as…
fabib Wrote: ------------------------------------------------------- > right on eureka… > > Look, even if the clients know in advance that > things MAY change…they should be told QUARTERLY > (according to the text) what actually changed… > > This is so they can know if there is any total > exposure they need to rebalance > > Simple as… Can you please quote the text?