Eureka Correspondence

Shorting stocks, ISIS and investing in Magellan's exchange-traded managed fund.

A great point is made in Robert Gottliebsen's article Tough times for value investors (February 25) regarding the practice of managed funds and super funds lending shares knowing that they will be used to "short" the market. This practice is one of the reasons why I lost confidence in the superannuation managers and formed my own SMSF. To my simple mind this is like lending someone your new car, knowing that their intention is to bring it back trashed! It is my view that such activity is a breach of the superannuation manager's fundamental obligations to act in good faith and consistently in the best interest of their clients without any conflict of interests.

Merv

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