1. Archive

Different investors, different access

Mutual funds seem like such egalitarian fare. Because people's investments are combined into one big portfolio, your stake of, say, $5,000 gets the same attention from the portfolio manager as someone else's $5-million.

But that doesn't mean that you get the same attention as the million-dollar shareholder. Chances are you don't. A key difference is access.

Many big fund investors _ particularly financial advisers who buy and sell funds for wealthy clients _ routinely demand and get personal meetings or phone conversations with managers before they plunk down money. And they expect to be able to check in with fund managers periodically, particularly when a manager's investing style or stock picks aren't doing well.

Talking directly with fund managers "gives us a sense of their personality, their passion for what they do, their commitment to their style," said adviser Andrew Mehalko, research director for DCA Global Investment Management in Fort Lauderdale.

Such meetings also boost the advisers' prestige with clients and prospects. Louis Stanasolovich of Legend Financial Advisors in Pittsburgh says he periodically relays comments made to him by managers such as Jean-Marie Eveillard of SoGen International Fund and Martin Cohen of Cohen & Steers Realty Shares. "A lot of my clients have come to expect that," he said. "The fact that I have that kind of access does impress people, no doubt about that."

So where does that leave ordinary Joes and Janes, who usually can't call up their fund managers to find out what they are thinking and doing? It's not always easy, but there are ways to get such insights. Technological advances including the World Wide Web and e-mail are playing an important and rapidly increasing role.

First, before we dismiss that old standby, the telephone, there are some smaller fund companies where ordinary investors stand a good chance of getting an actual portfolio manager on the line. For instance, Dennis Delafield and Vincent Sellecchia of New York's Delafield Fund provide their phone numbers in that fund's shareholder reports. Investors in the two FAM funds can call Tom Putnam, head of fund sponsor Fenimore Asset Management, of Cobleskill, N.Y.

Many fund companies and big fund distributor Charles Schwab Corp. exclude individual investors from periodic conference calls in which fund managers field questions from financial advisers. The Schwab calls are "an extra benefit for investment advisers working with Schwab," said Schwab spokesman Michael Van Dam. But here, too, there are exceptions. For instance, individual investors in the three Longleaf Partners funds are welcome to participate in that Memphis, Tenn., firm's quarterly conference calls.

Longleaf sponsor Southeastern Asset Management is also among the fund firms that hold regular annual meetings or investor conferences in their home cites. "People who come enjoy being able to hear directly and ask questions" of O. Mason Hawkins and the other Longleaf managers, said company executive vice president Lee Harper. In New York, there are annual gatherings for the Baron funds, of Baron Capital Group and Sequoia Fund.

There are a variety of investment conferences at which individuals can hear fund managers speak, including an annual conference run by fund-research firm Morningstar Inc. in Chicago.

In a less interactive vein, many fund companies have telephone hot lines investors can call for periodic updates by fund managers. At Founders Asset Management, a Denver unit of Mellon Bank Corp., for instance, there are new messages recorded every six weeks.

Then there is the whole new realm of fund-investor communications opened up by the spread of personal computers.

For instance, there are live, scheduled "chat" sessions during which a fund manager responds to questions that participants type in from their computers. The leading destination for such sessions, Sage Online, is available only on America Online, but Alan Cohn, Sage Online co-president, said he hopes to add a Web service this year.

Investors also can communicate with each other _ and sometimes with fund managers _ through "bulletin boards" such as those on Sage and on the Morningstar.Net site Cebra Graves of Morningstar edits. Right now, the dialogue of posted messages is mostly among investors.

Some fund managers clearly are watching the bulletin boards. In March, for instance, after reading some of the Morningstar.Net postings about his Fidelity Low-Priced Stock Fund, manager Joel Tillinghast sent an e-mail comment to a Morningstar analyst and gave him permission to post it.

A number of fund companies have added neat features _ including expanded fund-manager commentary, live or recorded audio presentations and e-mail communications _ to their own Web sites.

A particularly impressive site right now is that of BankAmerica Corp.'s Robertson Stephens Funds in San Francisco. Investors can use the Web site to listen in on the firm's fund-manager conference calls. They can catch up on past conference calls or chat-room appearances through recorded audio or transcripts. And they can request to be notified by e-mail of conference calls and updated market commentaries.

Fund-company Web sites are sure to improve over time. Pilgrim Baxter & Associates last month introduced an improved Web site for its PBHG funds with expanded commentaries, and e-mail communications are in the works. Later on, company chairman Harold Baxter said, he would like the Wayne, Pa., firm to be able to send quick commentary to investors on volatile, question-provoking days _ such as those when a PBHG fund is up strongly while the broad stock market is down, or vice versa.

In such ways, Baxter said, "I hope we can bring the shareholder closer to the portfolio manager."

While fund companies are improving their electronic communications, meanwhile, some are trying to gently wean financial advisers away from lots of personal contact with portfolio managers. The advisers are clearly trying to do the best job for their clients, said Chip Ridley, a Montgomery Funds marketing executive who works with advisers, but the expectation of unfettered access is "unhealthy" and unsustainable.