Mutual Fund Ratings Are They Deceiving

Post on: 16 Март, 2015 No Comment

Mutual Fund Ratings Are They Deceiving

By Catey Hill

Some food and vitamin labels are not just misleading, but downright wrong. And the government is partly to blame.

From frozen dinners to vitamins, the labels on our foods are sometimes incorrect. On Monday, the attorney general of New York accused GNC (GNC). Target (TGT). Walgreens and Wal-Mart (WMT) of selling herbal supplements that claimed to contain ingredients they didn’t actually contain; indeed, DNA tests of some of these stores’ supplements found that just 21% contained DNA from the herbs and plants listed on the label.

The New York review wasn’t the first to reach such conclusions. A study released in 2013 in the journal BMC Medicine — in which 44 bottles of herbal supplements from 12 companies were tested — found that one-third of the supplements tested didn’t contain the supplement advertised (so, for example, a bottle of St. John’s wort didn’t actually have any St. John’s wort herb in it). Many other supplements contained ingredients like wheat and rice that weren’t even listed on the label—even though they can cause allergic reactions in some consumers.

www.marketwatch.com/story/your-herbal-supplements-might-be-a-sham-2015-02-03.)

When it comes to food labels, there are problems too. A study published in the Journal of the American Dietetic Association found that the calorie content on frozen food labels was on average 8% higher than the label claimed — and on restaurant menus an average of 18% higher. What’s more, the author of the study, Susan B. Roberts, director of the Energy Metabolism Laboratory at the USDA Human Nutrition Research Center on Aging at Tufts University, says she suspects that those kinds of inaccuracies are common on other items on the nutritional food label as well.

Indeed, our food and vitamins aren’t always what they seem. Many times, of course, it’s the fault of the manufacturer. But advocates say sometimes lax government rules are partly to blame. Calorie counts on food labels, for example, can be off by 20% in some cases and still be in compliance with FDA regulations. With naturally occurring vitamins, minerals, protein, carbohydrates, dietary fiber, polyunsaturated and monounsaturated fat, and potassium, the FDA requires that the item must be present at 80% or more of the value declared on the label. So a label that states that an item has 6 mg of vitamin C in it is only required to have 4.8 mg or more of vitamin C in it. The FDA has said that if those nutrients are added to the food—rather than naturally occurring—they have to meet 100% of the label claim.

www.marketwatch.com/story/new-york-orders-retailers-to-stop-selling-store-brand-supplements-2015-02-03.)

Similar rules apply to calories, sugars, total fat, saturated fat, cholesterol, and sodium. With these items, the ratio between the amount obtained by laboratory analysis and the amount declared on the product label in the Nutrition Facts panel must be 120% or less, according to regulations. So, if an analysis found that the product had 21 grams of fat in it even though the label stated that it had 18, the product would still be in compliance with FDA regulations because that ratio is below the 120% threshold.

These regulations, combined with the fact that packages have to contain at least 99% of the weight declared on the box, basically mean that for food manufacturers to stay within the law they almost have to put more food in a package than they state on the label, says Roberts. She says these regulations are probably a vestige of when we were more concerned that consumers weren’t being sold short measures. But now, they may be making Americans fat.

While that might sound troubling to some, food labels — especially if you’re aware of the margin of error — can generally be trusted. There are, of course, exceptions, says Andrea Giancoli, a registered dietitian spokesperson for the Academy of Nutrition and Dietetics. While the FDA doesn’t check the accuracy of each food label before it hits the market, a large portion of the packaged goods in the U.S. are manufactured by a few corporations who have thorough internal processes for checking label accuracy and a lot of incentive to make them accurate for fear of consumer backlash or legal issues, says Christina Munsell, a research associate at Yale’s Rudd Center for Food Policy and Obesity. In fact, Jayne Hurley, a scientist at the Center for Science in the Public Interest, says most of the issues with food labels she’s come across were from smaller companies, though she adds that they were typically very willing to correct them.

Supplements are a bigger — and more alarming — problem, says Tamara Duker Freuman, a New York City-based registered dietitian. Supplements, though regulated by the FDA, aren’t regulated like food and drugs, says Giancoli. Supplements are definitely less regulated, says Christina Munsell, a research associate at Yale’s Rudd Center for Food Policy and Obesity. It’s more like the wild west. Mostly, the FDA regulates supplements after they’re being sold to consumers by keeping tabs on reports of adverse effects.

In addition, there are supply chain issues and a lack of internal regulations, experts say. Some supplement manufacturers buy their ingredients in other countries or online and then don’t test the ingredients’ purity or efficacy once they arrive in the plant, says Freuman. There are also a lot of small players in the space, who may be less able to do the necessary checks on the purity of their ingredients and final products. That can harm consumers: when ingredients aren’t listed, it can be deadly to those with certain allergies and sensitivities, says Freuman. A spokesperson for the Council for Responsible Nutrition, a supplement industry trade group, has said that issues with the purity of supplements are overblown.

For consumers — especially those of supplements — none of this is particularly good news. And there isn’t a lot you can do about it except be aware of the problem. I think you can trust food labels — especially those of large companies, says Marlene Schwartz, the director of Yale’s Rudd Center for Food Policy and Obesity. They have the resources to make sure their labels are accurate and they also have a lot to lose should it come out that they were misrepresenting the facts on their labels. With supplements, the picture is more murky: Freuman recommends clients get a subscription to ConsumerLab.com, which independently tests products for purity and labeling accuracy, and also to generally go with larger supplement companies like GNC that can afford to invest in internal quality control processes and have a lot to lose if there’s a lawsuit.

This story was updated on Feb. 3, 2015 from an original version published in November 2013.

-Catey Hill; 415-439-6400; AskNewswires@dowjones.com

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02-03-15 1300ET


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