Two changes are afoot at Bruce Berkowitz's Fairholme.
First, the well-regarded value-oriented investment company plans to start a new bond fund called Fairholme Focused Income. That's Fairholme's second fund, with the $10 billion flagship Fairholme Fund (FAIRX) being the other.
Fairholme discussed the possibility of the new fund during a conference call last month. Berkowitz has been buying high-yielding bonds for the stock-focused flagship fund, and on the conference call mentioned that the firm might start the second fund.
The Boston Herald recently ran an article about the planned new offering. It noted that Fairholme Focused Income will invest in government bonds, corporates, preferred shares and more. It has a $25,000 minimum initial investment. It will charge a 0.5 percent expense ratio at first, but that could increase to 1 percent after a year. The Fairholme Fund also has a 1 percent expense ratio.
The Fairholme Fund itself also made a change recently, as this SEC filing shows. On Oct. 20 the Board of Directors changed the minimum investment to open an account to $10,000. It had been $2,500. The change takes effect Dec. 1.
The filing includes an asterisk saying that "depending upon the type of account, the minimum investment amount may be reduced to the maximum investment amount permitted by law for the account." Presumably that would mainly apply to people starting an IRA with Fairholme and only able to contribute $5,000 or $6,000 the first year under U.S. tax law.
Disclosure: I own shares in The Fairholme Fund.Also check out:
First, the well-regarded value-oriented investment company plans to start a new bond fund called Fairholme Focused Income. That's Fairholme's second fund, with the $10 billion flagship Fairholme Fund (FAIRX) being the other.
Fairholme discussed the possibility of the new fund during a conference call last month. Berkowitz has been buying high-yielding bonds for the stock-focused flagship fund, and on the conference call mentioned that the firm might start the second fund.
The Boston Herald recently ran an article about the planned new offering. It noted that Fairholme Focused Income will invest in government bonds, corporates, preferred shares and more. It has a $25,000 minimum initial investment. It will charge a 0.5 percent expense ratio at first, but that could increase to 1 percent after a year. The Fairholme Fund also has a 1 percent expense ratio.
The Fairholme Fund itself also made a change recently, as this SEC filing shows. On Oct. 20 the Board of Directors changed the minimum investment to open an account to $10,000. It had been $2,500. The change takes effect Dec. 1.
The filing includes an asterisk saying that "depending upon the type of account, the minimum investment amount may be reduced to the maximum investment amount permitted by law for the account." Presumably that would mainly apply to people starting an IRA with Fairholme and only able to contribute $5,000 or $6,000 the first year under U.S. tax law.
Disclosure: I own shares in The Fairholme Fund.Also check out:
