Reported Exchange Offers to Holders of Fixed Trust Shares, 1927-35 [Trusts with distribution of $500,000 or over] These 6 sponsors made 33 offers of exchange, either from one fixed trust into another, or from a fixed trust into an open-end management investment company. The dollar value of these exchanges was over $90,000,000 to the end of 1935, for which investors paid gross loading charges of about $5,000,000. Of the $90,000,000 of shares exchanged, $67,000,000 represented exchanges from one fixed trust into another and $23,000,000 represented exchanges into open-end companies. If these figures be made to include exchange offers by competitors, and projected to the total fixed trust sales it may be estimated that about $120,000,000 of fixed trust shares were exchanged either for other fixed trusts or open-end companies at a cost (gross loading charges) to applicable investors of at least $6,700,000. Since these investors had already been subjected to at least one previous loading charge, they had already paid at least $12,000,000, on their investment or a total contribution to sponsors, for which they received nothing but the privilege of making these successive investments, of $18,700,000. A graph showing the recurrent promotions-the "new model system"-of Calvin Bullock is shown on page 958. Further figures may be cited as to the fixed trusts. Of the total sales of about $760,000,000 by the 6 sponsors, the value of the shares outstanding at the end of 1938 was about $44,000,000-less than 6 percent of the total sold. This difference, while it reflects the effect of general market decline and of redemptions by holders, also reflects the effect of exchanges, loading charges, disadvantageous sales by holders through over-the-counter dealers and the like. The detail of various exchange offers by leading sponsors will be found in the Fixed Trust Report, pages 212–227. The following tables indicate that the practice of multiple sponsorship was not confined to the open-end and fixed-trust fields. |