Subject: S7-09-00

Date:    06/13/2000 1:46 PM
     
     
I am a finance professor in the Department of Finance in the College of 
Business Administration and Economics at New Mexico State University and 
I would like to support the adoption of S7-09-00 "Disclosure of Mutual 
Fund After-Tax Returns" that is currently under consideration.  This is 
an important piece of information that investors need in order to make 
an informed investment decision.  I have done some research in this
area (see Journal of Financial Planning April 1996 "What Mutual Funds 
Really Return After Taxes" pp. 60-66, Dr.Rich Fortin and Dr. Stuart 
Michelson) and we found that the average reduction in returns when taxes 
are considered averaged approximately 15% across all classes of mutual 
funds using relatively conservative assumptions.  I have long been 
perplexed that the mutual fund industry heavily advertises only pre-tax 
returns when investors (at least those in non-retirement accounts) are 
primarily concerned with after-tax returns.  Investors in high turnover 
funds pay a heavy tax penalty and this should be disclosed in the 
prospectus.  I strongly urge you to adopt this rule.
                                                 Sincerely,
                                                 Dr. Rich Fortin
                                                 Professor, Dept of Finance
                                                 CBAE
                                                 New Mexico State University
                                                 Las Cruces, NM 88003