mutual funds a product on the edge of extinction? If so, FOLIOfn
, a Web-site specializing putting together custom portfolios for investors may be one of the mammals (although it is too early to say if it is man or mouse). Last week the company announced that it has raised an additional $15 million in a "mezzanine" investment round to help in its evolution.
meVC Draper Fisher Jurvetson Fund I
was the sole investor in the round. The meVC fund is itself controversial. It enables retail investors (those with as little as $50,000 in assets) to invest in private equity deals put together by Draper Fisher Jurvetson.
FOLIOfn is a Web-based cross between an advisory firm and fund company. Its idea is simple: let investors use the Internet to put together a basket of stocks that suit their individual needs. Then, let them buy and sell the stocks through the site at a low price. In the startup's own word's its goal is to let investors choose a custom portfolio rather than "trying to identify the 'perfect' mutual fund," according to the company. It claims that FOLIOs can be based on the investor's preferred risk levels, personal values, industry sectors and other factors.
The company calls the baskets of stocks chosen through the site "FOLIOs" (no surprise hear).
"Investors can choose from scores of Ready-to-Go FOLIOs, or create their own, using stock selector tools or even picking one stock at a time. Investors can always modify any FOLIOs to meet their preferences," says the company.
The site is also hoping to appeal to the more frugal investor who is self-reliant enough to balk at paying an advisor a one percent fee. Using the system investors can create and trade three FOLIOs - comprised of one to 50 stocks each - for a flat fee of $29.95 per month or $295 for a full year. There are no trading commissions or extra charges for twice-daily window trades, according to the company.
The site launched in March of this year and was founded by Steven M.H. Wallman
, a former commissioner of the SEC from 1994 to 1997. The firm also has some experience in the fund industry. Steven Cohen
, FOLIOfn's vice president of marketing held the same position for the Calvert Group
. Peter C. Henry
, vice president of product management, was president of CDA/Investnet
. James Rankin
, vice president of customer support was a vice president at both Founders Funds
and T. Rowe Price
. Don Butler
, vice president and controller, came to FOLIOfn from Deutsche Banc Alex. Brown
where he was vice president of finance and prior to that Legg Mason Wood Walker
were he acted as assistant vice president and assistant controller.
"Until now, technology has only been used to make trading faster and cheaper," said Wallman. "Our first product, FOLIO investing, offers investors a better and an easier choice. FOLIO investing symbolizes the changes FOLIOfn is going to launch in the investing world. meVC's support for what we're doing underscores the Fund's commitment to being at the forefront of technological change."
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