Would an average daily net flow measure provide useful information to investors?
Additional disclosure of shareholder flows could be useful to investors in identifying funds that have welcomed or have been targeted by active traders. Our preferred figure is a shareholder turnover rate calculated in the same fashion as portfolio turnover (the lesser of gross purchases or redemptions, divided by average net assets). Any figure based on gross activity has some drawbacks. Notably, the calculation of gross shareholder activity may differ because of variations in the amount of netting undertaken by fund transfer agents or omnibus account providers. Nonetheless, we have found shareholder turnover rates to be useful in identifying funds with unusually high or low shareholder activity relative to other funds with similar customer bases. The ability to compare shareholder turnover rates and portfolio turnover rates also provides this figure with an advantage over other calculations. 21. Should the Commission consider policies to encourage funds to charge purchasers and redee
