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W. P. Stewart Issued Comment On Market Activity
We do not know what caused the recent increase in trading volume -- or who the recent buyers and sellers have been -- and we do not think it would be appropriate for us to speculate about those issues. Based on the inquiries we have received from shareholders, we recognize however that there is some concern among investors about whether the resignation of two portfolio managers in early January has had a material impact on our AUM flows. At this time, I can report that our net flows, as of the close of business on February 21st, were negative approximately $40 million so far in the quarter. While we are not happy with the negative flows so far this quarter, that amount does not materially impact our business.
As a result of those recent departures, together with other changes in the balance of our portfolio management activities among various jurisdictions, the proportion of our activity based in high-tax countries has increased somewhat relative to the activity based in lower-tax jurisdictions. We believe this change will be temporary, and we are currently taking steps to restore our historical geographical mix. However, based on the facts in existence today and assuming that we are not successful in restoring our historical business mix, this change in our business could result in an effective tax rate for 2006 in the range of 17-20% of pre-tax income. We will continue to pursue efforts to restore our historic balance, and we should be able to report on our progress at the time of our release of results for the first quarter.
In the meantime, our investment team continues to focus on delivering consistently superior results for our clients. Our performance got off to a slow start in the early part of this year relative to the S&P 500, but it is solidly positive and we remain optimistic for the remainder of this year.
As many of you know, we do not usually disclose this kind of information about our business at any time other than the time of our quarterly earnings release and conference call. We intend in the future to continue to adhere to that policy of quarterly disclosure, but we thought that a review of these issues with you now, in mid-quarter, would be helpful in light of our increased trading volume and recent investor inquiries.
On behalf of all my colleagues at W.P. Stewart, I wish to thank our loyal clients and shareholders for your continued support. We are optimistic that we will succeed in growing our business, and we remain strongly committed to your best interests."
W.P. Stewart & Co., Ltd. is an asset management company that has provided research intensive equity management services to clients throughout the world since 1975. The Company is headquartered in Hamilton, Bermuda and has additional operations or affiliates in the United States, Europe and Asia.
The Company's shares are listed for trading on the New York Stock Exchange (NYSE: WPL) and on the Bermuda Stock Exchange (BSX: WPS).
For more information, please visit the Company's website at http://www.wpstewart.com, or call W.P. Stewart Investor Relations (Fred M. Ryan) at 1-888-695-4092 (toll-free within the United States) or +441-295-8585 (outside the United States) or e-mail to IRINFO@wpstewart.com.
SOURCE W.P. Stewart & Co., Ltd.
-0- 02/23/2006
/CONTACT: Fred Ryan, +1-441-295-8585, for W.P. Stewart & Co., Ltd./
/First Call Analyst: /
/FCMN Contact: denise@wpstewart.com /
/Web site: http://www.wpstewart.com /
(WPL)