Five Star Fund Company Launches Double Asterisk Fund

Investments · New Fund Launch

Five Star Fund Company Launches Double Asterisk Fund

Projected returns are off the chart.

By Staff Fabricator · Investments Desk

Double Asterisk Fund advertisement: double-digit performance of minus 14 percent, losses in all four quarters, a projected minus 8 percent return and lower dollar fees on a smaller balance. A red performance line falls below the chart. — Five Star’s new fund meets every requirement identified in its investor focus groups.Fictional fund advertisement · Satire

BOSTON — Five Star Fund Company unveiled its Double Asterisk Fund Monday after twelve months of testing confirmed that it met every requirement identified in the firm’s investor focus groups.

“Clients wanted double-digit performance, consistent results and lower management fees,” said chief executive Alan Whitcombe. “We weren’t prepared to launch until we could check all three boxes.”

Whitcombe said the fund’s discipline sets it apart. “Everybody in this business talks about buying low and selling high,” he said. “Our shareholders have bought lower every single quarter. Show me another fund that can say that.”

Asked when investors could expect to sell high, Whitcombe said Five Star encourages a long-term perspective.

In Scottsdale, Ariz., financial advisor Brent Kessling said he added the fund to every client lineup within an hour of the announcement.

“Double-digit performance, consistent results, lower fees and five stars,” Kessling said. “I don’t know what else you want from a fund.”

Whitcombe said that, based on the fund’s performance and current holdings, he has never been more confident in its ability to extend its outperformance streak next year.

“Double-digit performance, consistent results, lower fees and five stars. I don’t know what else you want from a fund.”— Brent Kessling, financial advisor, Scottsdale

Around the Industry

Advisor Communications

Advisor Avoids Email by Leaving Four Voicemails Saying “Don’t Email Me”

By Staff Fabricator

SCOTTSDALE, ARIZ. — An advisor seeking to discuss a client matter “off the record” left four voicemails Monday on a Lockridge Retirement Services regional vice president’s company phone, each asking him not to put anything in writing.

“Let’s be smart about this,” the first message began.

In the second, the advisor clarified which client he meant. In the third, he corrected a detail from the second that he said could look bad without context.

The advisor, who asked not to be identified, had opened all four messages with his full name and firm. He followed up with six texts. The last read “delete this.”

Lockridge, which records, transcribes, and archives all calls and messages on company devices, said the advisor had been helpful.

“Most people make us search for it,” said Marian Holt, chief compliance officer. “He labeled it.”

Retirement Planning

Advisor Helps Client Retire Seven Years Earlier

By Staff Fabricator

COLUMBUS, OHIO — Retirement advisor Bill Moore helped a client move her projected retirement date forward seven years Monday by increasing the annual return assumption from 5% to 9%.

“Someone else might have told Susan she needed to work another seven years,” Moore said. “That’s seven years of her life. I wasn’t willing to accept that.”

Client Susan Bell, 58, said she had expected to discuss working longer or saving more. Moore asked her to wait while he tried something.

“He went quiet for maybe forty seconds,” Bell said. “You could tell how much he cared.”

“The first plan didn’t reflect what Susan wanted,” Moore said. “You have to listen to your client.”

Moore saved the new version as “Optimized” and turned the monitor toward Bell so she could see the difference his advice had made.

At the end of the meeting, Bell asked whether there was anything she needed to do.

“Just stay the course,” he said.

Quick Takes

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The One True Thing

A smaller fee bill is not necessarily a lower fee rate. A fund’s expense ratio expresses its annual operating expenses as a percentage of its average net assets. Those expenses are paid from fund assets and reduce investors’ returns.

If the percentage stays the same while the assets shrink, the dollar amount can fall. That does not mean the fund cut its rate.

Compare the expense ratio and other charges in the prospectus—not just a dollar amount.

Source: SEC investor education bulletin, Mutual Fund and ETF Fees and Expenses.

Reader Poll

Which part of a fund’s performance do you read first?

The number12%

The stars31%

My advisor’s summary49%

The minus sign8%

Invented results. The minus sign has requested larger type.

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Corrections

An earlier version of this newspaper described a fund’s return as “14%.” The fund company has asked us to leave it that way.