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No. of Recommendations: 9
I am not by any means an apologist for fools nor for The Motley Fool. However I am a stickler for research and accuracy, to the extent possible with a reasonable effort. And it's not happening in this thread.

Like, two people posted URLs for this fund company but neither one spelled it right. Jeez. Try http://www.foolfunds.com/

The first post said absolutely nothing about the fund except for the fees and expenses, and painted it in as negative a light as possible. Well, I do not believe in things like a $24 fee for "small" balances (under $10,000) so I won't defend that. It's just plain wrong. But the rest of those numbers are nothing extraordinary, so what's all the fuss?

1) A 90-day short-term redemption fee of 2% is well within industry norms, and 3 months is shorter than the 6-month period enforced by brokers like TDAmeritrade.

2) A total NET expense ratio of 1.35% is much higher than a typical Vanguard index fund but is nowhere near the top end of the range for an actively managed stock fund.

3) A minimum initial investment of $3000, and/or minimum automatic investment of $100 a pop, are both reasonable and make the fund affordable to the majority of small investors.

So my reaction to the first post is just one of curiosity. Again, I am not ready to pitch for these guys because I don't know that much, but how come nobody posted any other information here?

I looked around and found stuff that seems at least as pertinent as the collection of factoids cited above. Like:

"Guiding Principles
At Motley Fool Funds, we aim to get right what much of the fund industry gets wrong. Our approach all begins with a unique, shareholder-centric philosophy.

We are -- and will remain -- significant investors with you in Motley Fool Funds...

We will not impose loads or 12b-1 charges, and we will apply redemption fees only to discourage short-term trading...

We will be advocates on your behalf with company managers and boards, in the interest of enhancing the value of your shares.

We will communicate with our shareholders as clearly and candidly as possible..."


About the Independence Fund:

"The Independence Fund seeks great companies at value prices.

We look for well-managed companies, both in America and abroad, that boast strong financial positions and operate in industries that our management team truly understands. Performing rigorous, fundamental analysis, we dissect each company's strategy, competitive position, operations, and performance, and we review all pertinent public documents and official communications about the company.

Although we will invest with an intention to hold for the long term, we will also insist on keeping a solid margin of safety on all Fund holdings. As a result, we will sell any holding that we believe has appreciated beyond its intrinsic value."


The site's 1-day fund snapshot from the last trading day (last Thursday, 7/2/09) shows the fund losing 2.48%. For comparison, the DJ Wilshire 5000 total market index fund lost over 3% on that same day.

We'd all like to know what's in the portfolio. Well, IF you were to look around the site (like http://www.foolfunds.com/funds/independence/composition.aspx...) you would find what's up with that:

"The Independence Fund's investment portfolio is generally composed of at least 30 investment positions, with the 10 largest positions representing not more than 40% of the Fund's net assets. To limit the risks associated with highly concentrated holdings, the Fund will not invest more than 5% of its net assets in the securities of any one issuer.

Following the Fund's first quarter of performance, the composition of Independence Fund assets will be broken down by geographic region, major market sectors, and asset class, and the Fund's top 10 holdings and their percentages will be made available.

The Adviser's investment process focuses on issuers of all sizes, engaged in a broad range of industries in many countries..."


So: it's an All-cap Global Value Stock Fund. There is some bias (in the language on the site) toward small-caps so one might assume that the market cap will average out toward the Mid-cap range, and since they say they'll sell stocks after a lot of appreciation, it would most likely stay in the Value-Blend range.

With "at least 30" stocks (but no guarantee of a lot more) they make it sound like they're planning on a concentrated fund that will depend on stock-picking.

Will it be worth owning? Obviously it's too soon to tell, but in my very quick (5 minute) visit to the site I didn't see anything that merits so much derision. One would wish for lower expenses but these guys know darn well that people like us are reading those numbers and commenting negatively. So I assume there must be something about starting up a mutual fund that is expensive.

Maybe one of you ace reporters could write to them, find out, and report back here what they say about the expense ratio. And the $24 maintenance fee. Other than that I don't see anything so terrible.
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