has ushered in 2011 with a new mutual fund. The star manager today launched his third '40 Act product, Fairholme Allocation Fund
. [SEC filing
| Bruce Berkowitz|
Fairholme Capital Management
Founder and Portfolio Manager
The fund comes with an expense ratio of 75 basis points.
Berkowitz, whose stockpicking skills have earned him accolades including Morningstar's Domestic Stock Fund Manager of the Year for 2009 and U.S. Stock Manager of the Decade, has been branching out beyond his flagship Fairholme Fund, which now has $18.8 billion of AUM.
In January of last year, Fairholme Capital Management launched a bond fund called Fairholme Focused Income. That fund currently has $351.8 million of AUM, according to Morningstar.
Company Press Release
Fairholme Funds, Inc. Launches Fairholme Allocation Fund (FAAFX)
MIAMI, Jan. 3, 2011 -- On January 3, 2011, the Fairholme Allocation Fund (FAAFX) will be open to investors.
The Fairholme Allocation Fund seeks long-term total return from capital appreciation and income. The Fund attempts to achieve this investment objective by investing in a focused portfolio of investments in the equity, fixed-income and cash and cash-equivalent asset classes. The proportion of the Fund's portfolio invested in each asset class will vary from time to time based on Fairholme's assessment of relative fundamental values of securities and other investments in the class, the attractiveness of the investment opportunities within each asset class, general market and economic conditions, and expected future returns of investments.
The Fund seeks to capitalize on anticipated fluctuations in the financial markets by changing the mix of the Fund's holdings in the targeted asset classes. The Fund will use Fairholme's focused, multi-sector, multi-strategy, value-based approach.
The minimum investment to open a new account is $25,000. The minimum subsequent investment for regular accounts is $2,500 and $1,000 for retirement accounts. The annual fund operating expense is 0.75%.*
The Fund's investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the Fairholme Allocation Fund, and it may be obtained by calling Shareholder Services at 1-866-202-2263 or visiting our website www.fairholmefunds.com. Read it carefully before investing.
Investing in the Fund involves risk including loss of principal. The Fairholme Allocation Fund is a non-diversified mutual fund, which means that the Fund can invest in a smaller number of securities when compared to more diversified funds. The Fund may invest in lower-rated securities, which may have greater market risk. This strategy exposes the Fund and its shareholders to greater risk of loss from adverse developments affecting portfolio companies. The allocation of investments among the different asset classes, such as equity or fixed-income asset classes, may have a more significant effect on the Fund's net asset value when one of these classes is performing more poorly than others.
*The Manager has contractually agreed to waive a portion of its management fees and/or pay Fund expenses (excluding taxes, interest, brokerage commissions, acquired fund fees and expenses, expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation) in order to limit the net expenses of the Fund to 0.75% of the Fund's daily average net assets. The fee waiver/expense limitation shall become effective on the effective date of the Fund's registration statement and shall remain in effect for at least one year after the effective date of the Prospectus and until the effective date of the Fund's Prospectus incorporating the Fund's audited financial statements for the Fund's fiscal year ending 2011.
Shares of the Fairholme Allocation Fund are distributed by Fairholme Distributors, Inc. (1/2011)
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