The $126 Million Phone Call
That Went Unanswered for
The inside story of how a major league pitcher's record-breaking contract sparked an investment alternative that was 17 years in the making. It may be just the opportunity YOU are looking for...
In December 2006, the phone rang in a small office in Alexandria, Virginia.
On the other end of the line was a man whose son, a Cy Young-winning pitcher, had just signed a $126 million contract with the San Francisco Giants.
Terrific news, right? But the guy had a problem. All of a sudden, creepy characters were circling his family. And he didn't particularly like the financial advisors the players' union had recommended...
So he was calling to see if famed investor Tom Gardner would manage his son's fortune.
Tom felt compelled to decline his request, pointing out that he'd spent years arguing that the best person to look after your financial future is YOU — while criticizing Wall Street and the "professional money managers" unmercifully.
"That's the point," the man said. "I don't trust them. I trust you!"
You see, the question he was really asking Tom was… What are we supposed to do with all this money?
And this wasn't the first time Gardner had helped those who trusted him struggled with that problem. He'd heard similar requests from people who liked what he and his colleagues had to say about investing in the world's best companies for the long term, but didn't really have the time or energy to manage their own money...
For years, Tom Gardner had been dodging this call. But it always nagged at him. Because if such a thing were possible, a homegrown, Foolish mutual fund could help investors like you build their long-term wealth...
Well, at last we believe we've put together a fund that can do just that.
The Real Great American Pastime
Motley Fool Great America Fund (TMFGX) Performance and Fees
1 Month Performance
(as of 12/31/2012)
Great America Fund: 2.44%
Russell Midcap Index: 2.25%
Since Inception (11/01/2010-12/31/2012) Great America Fund: 13.16% Russell Midcap Index: 11.16%
1 Year Total Return
(as of 12/31/2012)
Great America Fund: 17.15%
Russell Midcap Index:17.28%
*The Fund's net expense ratios reflect fee waivers and expense reimbursements by the investment adviser. The Adviser has contractually agreed to pay, waive or absorb a portion of the Funds' expenses through the end of February 2013, or such later date as may be determined by the Funds and the Adviser. The Funds' performance would have been lower if the waivers/reimbursements had not been in effect.
1The Great America Fund Net Expense Ratio includes a Monthly Performance Adjustment of 0.02% (as of January 1, 2013).
2The gross ratio as stated in the Prospectus 2/28/2012
The performance data quoted represents past performance and does not guarantee future results. Current performance may be lower or higher. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
A redemption fee of 2.00% of the then-current value of shares redeemed is imposed on redemptions of shares made within 90 days of purchase, subject to certain exceptions.
Unlike a mutual fund, the performance of a market index is not affected by fees, expenses, and taxes.
Do you believe America's best days have passed? That investing in this country is a losing game from here on out, and that there's no hope for individual investors seeking market-beating returns?
Neither do we. Here at Motley Fool Funds, we're not buying the idea that all the best growth opportunities are abroad.
We believe in America. Just like you do. An America that is home to the world's great entrepreneurs — and offers real value opportunities for patient, long-term investors.
That's why our Motley Fool Great America Fund scours the market for small- and mid-cap American companies.
When you invest with us at Motley Fool Great America Fund, we won't just shovel your money into Apple or Ford. And if we do put your money there, it will be because we believe in those companies.
You see, we spend our time looking for opportunities – both in and out of the S&P 500. This is a conscious decision we made for a number of reasons.
First, we believe that most investors are already far too exposed to familiar large-cap names like Apple and even Ford (they're not called "widely held" for nothing, right?)...
After all, while the S&P 500 is referred to as "the market"... and while 500 companies does seem like a lot... every single one of those is a large company. In other words, investors who think they own "the market," often really don't.
Making matters worse, the S&P 500 is what's called "market-cap weighted" — which means, among other things, that investors who hold the index are even more HEAVILY exposed to a handful of the world's largest companies than they might suppose.
(Unfortunately, the exact same thing can be said of too many of the world's most popular mutual funds. We think that's a mistake.)
Another reason we look beyond the S&P 500
Let's face it: with dozens of Wall Street analysts watching their every move, the market is much more efficient at valuing widely held S&P stocks.
As a result, when you concentrate on these names, you not only risk missing out on the growth opportunities offered by smaller companies...
You are pitting your wits against the most educated, highly paid analysts in the world — thousands of them! We believe this explains why years of data compiled by Ibbotson Associates indicates that, as a group, small- and mid-cap companies have historically outperformed their large-cap peers.
But size is not our only criteria. We'll only invest in what we believe are well-managed companies with strong financial positions — operating in industries our investing team truly understands.
Our portfolio manager Bill Mann will dissect each company's strategy, competitive position, operations, and performance before investing... and carefully review all pertinent public documents and official communications.
A different kind of mutual fund company
Just as Motley Fool CEO and co-founder Tom Gardner intended, Motley Fool Funds isn't your typical mutual fund company.
Our entire staff occupies just one unassuming corner of the first floor of the old Time-Life building in Alexandria, Virginia — a world away from the massive Wall Street banks and huge financial-services conglomerates whose skyscrapers you see advertised on TV.
We don't have a bustling trading desk, or a seat on the exchange. Nor do we hobnob with investment bankers or hedge-funders.
Frankly, we're small. And we keep things simple. So be aware...
When you invest with us at Motley Fool Funds, you are investing in partnership with a small, dedicated team of stock analysts and a value-obsessed manager whose sole mission in life is to dig up the market's hidden opportunities.
A fee structure that truly serves shareholders
There's another way Motley Fool Great America Fund is a little bit different from your typical mutual fund...
For starters, Motley Fool Great America Fund is a no-load fund. That means you never pay an up-front sales charge or commission to invest with us. You aren't made to pay so-called 12b-1 fees to help us market the fund, either.
And did we mention that we get paid for beating the market?
If we underperform our benchmark, we make less. That's because we've opted for an unusual compensation model that allows our fees to increase or decrease depending on the fund's performance.
In the industry, this is called a "fulcrum fee" structure. You can learn more about how it works by reading the fund prospectus. (To see other fees associated with the fund, you may also consult the fund prospectus.)
This unusual component of our fee structure gives us the incentive to earn the highest possible return relative to the market, not merely pump up the fund's assets the way many other funds do.
Just as important, our award-winning portfolio manager, Bill Mann, and other members of the portfolio team, are meaningful shareholders in the fund... So they're investing right along with you.
So you see, our interests really are aligned with yours, in more ways than one.
A word about risk
Of course, any investment comes with risks. We don't promise that you'll make money with the fund. Over any given time period, no matter how hard or how long the fund's investment advisor works, the value of the fund could go down and you could lose money, including principal. We endeavor to find companies that are both great businesses and great investments, but there can be no guarantee that we will succeed. Keep in mind that Motley Fool Great America Fund is new, without a long-term track record.
And because the fund invests in small- and mid-cap companies, some extra risk may be involved. Small- and mid-cap companies may lack the management experience, financial resources, product diversification, and competitive strength of larger companies. These stocks tend to be more volatile and less liquid than their large-cap counterparts.
Also, "value style" investing entails its own risks. "Value stocks" can continue to be undervalued by the market for long periods of time, and the Fund could perform poorly if the investment advisor's assessment of a company's true value or prospects is inaccurate.
The fund is not for everyone. If you're seeking something other than long-term capital appreciation — for example, current income to live on — or if you're not comfortable with the risks, or if you expect to need your money back soon, this is not the fund for you. We strongly encourage you to read more about the fund's strategies and risks in its prospectus.
Are you ready to invest? Hold on! Don't send us a penny unless...
Frankly, we'd rather not take on investors who are tempted to pull out when stocks lose value — in other words, precisely when WE are most eager to go shopping for bargains.
Plus, unlike what we believe many U.S. mutual funds are doing, we intend to be long-term, buy-and-hold investors. And not just because it makes life easier for our portfolio manager.
We firmly believe — and the vast preponderance of evidence shows — that attempts at market timing put YOU at a grave disadvantage and greatly reduces your chances of out-performing the market over the long term.
For this reason, and to help keep the fund's expenses low, we discourage small accounts and short-term trading by assessing a $24 annual fee on accounts of less than $10,000 in value, as well as a 2% redemption fee on shares redeemed within 90 days of purchase. This fee goes directly into the fund for future stock purchases on behalf of shareholders.
So, while we hate to turn investors away, if you're not a patient, long-term investor, Motley Fool Great America Fund may not be for you.
After all, not only are you trusting us with your hard-earned money — an honor we take very seriously, I assure you — our friends and family will be investing right alongside you...
Get invested now!
If YOU believe in America as we do and if you are a patient, long-term investor, then Motley Fool Great America Fund may be right for you.
We hope you'll join us in this exciting venture! Taking the next step is easy...
Retail Funds Director
Motley Fool Asset Management, LLC
P.S.You can now invest in Motley Fool Great America Fund (TMFGX) directly through your broker! Including Charles Schwab, TD Ameritrade, Fidelity, Scottrade, USAA, and Vanguard -- making it even easier to take the first step toward achieving your financial goals. Please contact your brokerage firm to find out if it offers the Great America Fund.
Mutual fund investing involves risk, including possible loss of principal. There is no guarantee that the Fund will meet its stated objective. Please consider the charges, risks, expenses, and investment objectives carefully before you invest. Please consult the Motley Fool Great America Fund prospectus (www.foolfunds.com/forms/greatamericafund.aspx) for this and other information. Read it carefully before you invest or send money.
The investment adviser for Motley Fool Great America Fund is Motley Fool Asset Management, LLC, a wholly owned subsidiary of The Motley Fool Holdings, Inc., which is a multimedia financial-services holding company. Shares of the fund are distributed by Foreside Funds Distributors LLC, Berwyn, PA. a registered broker-dealer not affiliated with The Motley Fool.