Thanks for the Sept. 1 Editorial Page column on the manuscript of "The Excellent Pension Fund: Creating Value for Stakeholders."
I wonder if you would mind printing one small correction. While it is true that KPA Advisory Services has been involved in designing the cost-effectiveness measurement studies cited in the book, it is in fact a sister company - Cost Effectiveness Measurement Inc. - which gathers the data, and which performed the actual analytical work on using its database.
I co-founded CEM in 1992 with John McLaughlin here in Toronto. John and I continue to be very much involved with CEM, but it is now being run by two other principals, Sandy Halim and Tom Scheibelhut. The firm has grown since 1992, and now has data on 275 U.S., Canadian and Dutch funds aggregating to $1.5 trillion.
KPA Advisory Services Ltd.
Oldest mutual fund
In the Aug. 4 edition of Pensions & Investments, several MFS mutual funds are referred to on page 21 in an article titled "Index funds dominate performance rankings." I happened to notice Massachusetts Investors Trust is referred to as "one of the oldest mutual funds in America" in the fifth paragraph.
Please note Massachusetts Investors Trust is in fact the oldest mutual fund in America, rather than "one of the oldest." For several decades, MFS has frequently and consistently maintained that it launched the first mutual fund in the United States (i.e. Massachusetts Investors Trust) in 1924 in numerous prospectuses, advertisements, sales material and other documents. No other firm has ever successfully, or even seriously, challenged this. Indeed, MFS' company logo, which appears on all of our literature, letterhead and business cards, contains the phrase, "We invented the mutual fund."
Enclosed for your reference is a copy of the current prospectus of Massachusetts Investors Trust, which indicates on the cover page that MIT is "America's First Open-end Investment Company" (i.e., mutual fund), and a copy of the Statement of Additional Information of MIT, which indicates on page 19 that MIT was "established as the first open-end mutual fund in America" in 1924. Please note these statements have been included in MIT's Prospectus and Additional Information for many years, and that each of these documents has been filed with the Securities and Exchange Commission and the state securities commissions of all 50 states.
Over the years, vast quantities of sales brochures, advertisements and other marketing materials incorporating references to MIT as the first mutual fund have been filed with and approved by NASD Regulation Inc. As recently as 1996, when MFS began using its new logo with the tagline, "We invented the mutual fund," the NASD formally reviewed the matter again and concluded that MFS could continue to state to the public that it established the first mutual fund.
In addition, please note numerous financial and other publications have long acknowledged MIT is in fact America's first mutual fund. For example, in its June 1, 1959, cover story on MIT, Time magazine noted "(t)he fund that has done more than any other to put shares in the household sugar bowl is Massachusetts Investors Trust, oldest and biggest of the mutual funds and the one that set the pattern for all the rest."
MFS has gone to great lengths over the past decades to support and protect this "claim to fame."
Senior vice president
and associate general counsel
Editor's note: A check of Morningstar's Principia Plus database showed the Philadelphia Fund, an open-end fund, was established in 1923. The story used the conditional wording to give each company the benefit of the doubt in terms of which is oldest.