Subject: File No. S7-11-04
From: Doug Moore

April 20, 2004

Investors should pay the cost of the transactions they cause. If I invest a lump sum in a fund for 10 years, I should pay for twice only - the purchase and the sale. If I buy and sell monthly, I should pay for lots of transactions. Making up arbitrary numbers like 5 days or 2 percent makes this seem like a scheme to train investors to be dormant.

So, every day that the fund has a change in total fund shares, figure out the cost of trading the stocks and bonds that must be bought or sold to match the change in fund shares. Divide that cost among the new investors. Dont make buy-and-hold investors pay for these transactions, and dont subsidize them by penalizing these transactions.

Report the average transaction cost along with other measures of fund performance, so that I can choose to do business with funds that can manage transaction costs.

Dont make this a scheme to reward buy-and-holders, and to punish rapid traders. Just have people pay for the costs they generate.