Mutual Funds May Shift Prices To Fix Glitch
Some mutual-fund companies may make changes to year-end fund prices after a trading glitch caused several companies to publish inaccurate data in recent days.</br></br>Yesterday, the Nasdaq Stock Market, which provides the price listings used by newspapers for more than 10,000 mutual funds, sent a memo to U.S. mutual-fund companies asking them to make any necessary changes to their year-end prices. The move came after a number of fund companies, including giant Fidelity Investments, experienced problems publishing accurate share prices for funds that held the stock of America Online Inc., which experienced year-end price swings on the New York Stock Exchange on Thursday, the last trading day of 1998. The swings caused confusion among mutual funds over the closing price for AOL that day.</br></br>The problems affected several wellknown funds, including Fidelity's Magellan Fund. In pricing shares of funds that held stock of the Internet company, several fund outfits initially used an incorrect, lower closing price for AOL when distributing per-share fund data to outlets for publication in newspapers and other uses.</br></br>As a result, the price that mutual-fund buyers were charged to purchase funds that held AOL stock was actually higher than the too-low price that appeared in their newspaper fund listings.</br></br>In a memo to fund companies, Nasdaq called on fund groups that may have a problem to "correct the closing" net-asset value of funds for 1998. The problem, Nasdaq officials say, is that end-of-year information is important in determining mutual-fund rankings and even tax issues that affect small investors.