Courtesy of the
Muscatine Journal,
copyright 2001
MUSCATINE, Iowa – A new name has been
added to Muscatine’s string of pearls. Culturing began 29 years ago.
Beginning July 2, Pearl Mutual Funds is
the name of a family of investment funds David Stanley seeded July 1,
1972, as Mutual Selection Fund Inc. Net assets are nearly $51 million.
Before July 2, shares were sold only
privately – and locally mostly, Stanley said.
Now the investment opportunity is open
to any U.S. resident (with a social security or tax identification
number) who lives in one of the 15 states where the funds are registered
so far, including Iowa and most adjacent states.
“It’s well over half the U.S.
population,” Stanley said. A highly developed Web site lets anybody in
the world see Pearl’s prospectus, application forms and other extensive
information. Now there are two funds.
Pearl Total Return Fund’s objective is
long-term total return. Limit risk – preserve capital.
Pearl Aggressive Growth Fund, by
contrast, seeks long-term aggressive growth of capital. Higher total
return – higher risk and volatility. Unlike funds trading in stocks
directly, both Pearl funds continue the traditions and track record of
Stanley’s “fund of funds” experiment by investing in other no- or
low-load mutual-fund portfolios. Both require a minimum investment of
$1,000 and allow any amount thereafter. The prospectus says the value of
an investment in Pearl Total Return grew 216 percent during the last 10
years and 77 percent during the last five years, an earnings history
comparing respectably with leading indexes. No claim is made for the
brand new growth fund.
Actually, no claim or prediction is
ventured at all except when couched in the careful legalese of
disclaimers and disclosures and reference to documents filed with the
U.S. Securities and Exchange Commission. Stanley is chairman, president
and CEO. Robert H. Solt is executive vice president, chief operating
officer, secretary and treasurer. Kevin J. Burns is vice president of
investment management and chief investment officer. Stanley is a lawyer
and former legislator. Burns and Solt have degrees in economics and
finance and background in other Stanley-led organizations. The three
officers share day-to-day portfolio-management responsibility and serve
as investment committee for both funds.
There is no network of sellers working
on commission. Marketing materials plays up small-and-local as an
assets.
“A small investor can call back and talk
to the same person you talked to last time,” Solt said. Big funds may
provide a personal representative, but only for large investors.
“You will know the full name of the
person you talk with,” Stanley said, adding that this can be a problem
for investors dealing with big funds “A real, live person will take your
call, promptly – we intend no waiting on hold, listening to bad music,”
he said.
Stanley said it is “certainly unusual”
to find a mutual fund based in a place like Muscatine.
“They are typically found in New York,
Los Angeles, Denver, Boston, Milwaukee or Chicago – in financial centers
driven by hot tips. “There may even be some advantage to being away from
Wall Street. Our long-term focus is easier out here on the banks of the
Mississippi,” he said.
Burns said the Internet has dispersed
the industry so there’s no disadvantage to living outside money centers.
The fund-of-funds concept attracted Stanley in 1972. His Mutual
Selection
Fund wasn’t the first to try, but he
said it was one of a half dozen.
“With more than a thousand mutual funds
then – more than 8,000 now – how do you pick? Selecting a group of funds
looked like a good service,” he said; a useful tool for people too busy
to do the research themselves.
Stanley said his seven-member board
pushed to go public after years of learning from mistakes, and the name
change was recommended by trademark lawyers to avoid a possible legal
fight with a richer fund with a similar name.
“The board went through a three-page
list of possible names and the lawyers knocked out about half,” he said.
Eventually, Pearl won a 5-2 vote. “We liked the (Muscatine) tie-in, and
our spouses liked it, too.”
Daniel G. Clark can be reached at
563-263-2331 or by e-mail at
dan.clark@muscatinejournal.com
Muscatine Journal Website:
www.muscatinejournal.com
Pearl Mutual
Funds SEC filings:
http://www.secinfo.com/$/SEC/Registrant.asp?CIK=1127352DETAILS
Shares of Pearl Total
Return Fund and Pearl Aggressive Growth Fund, each a series of Pearl
Mutual Funds, are registered for sale in 15 states (including Iowa) but
shares may not be sold in certain of those states until pending issuer
agent/dealer registrations have been declared effective. This reprint
is not an offer or a solicitation of an offer to buy any of the Pearl
Mutual Funds, nor shall any of the Pearl Mutual Funds be offered or sold
to any person, in any jurisdiction in which the offer, solicitation,
purchase or sale would be unlawful under the securities law of such
jurisdiction.
Pearl Mutual Funds and Pearl Management Company (the Funds’ investment
adviser) cannot guarantee the accuracy or completeness of any statement
or numerical data in this article. The discussion of investment
strategy, shareholder servicing capabilities and other items noted in
the article represents the views of the Funds’ portfolio managers and
Pearl Management Company at the time of this article, and are subject to
change without notice.
As
of June 30, 2001, Pearl Total Return Fund’s average annual returns for
the 1, 5 and 10 year periods were 8.82%, 11.57% and 11.55%,
respectively. From July 1, 1972 through July 1, 2001, Pearl
Total Return Fund’s shares were not registered under the Securities Act
of 1933 and sales were made only on a private basis. The Fund began
offering its shares to the public pursuant to an effective registration
statement on July 2, 2001. Pearl Management Company has contractually
undertaken to reimburse Pearl Total Return Fund until December 31, 2005
all ordinary operating expenses (including management and administrative
fees) exceeding the following expense ratios: 0.96% of average net
assets up to $30 million; 0.90% in excess of $30 million up to $100
million; and 0.78% in excess of $100 million.
Performance is
historical and does not guarantee future results. Investment return and principal value of an investment in
the Fund will fluctuate, so that an investor’s shares in the Fund, when
redeemed, may be worth more or less than their original cost. This
reprint is not authorized for distribution unless preceded or
accompanied by a Pearl Mutual Funds current prospectus.
All investments involve risks. Even though Pearl Total Return Fund and
Pearl Aggressive Growth Fund each invest in many mutual funds, that
investment strategy cannot eliminate risk.
This Website
provides general information about services provided by Pearl Mutual
Funds and
Pearl Management
Company. Nothing on this Website should be considered an offer
to provide any Pearl Mutual Funds service in any jurisdiction that
would be unlawful under the securities laws of that jurisdiction.
Pearl Mutual Funds, for which Pearl Management Company serves as the
Investment Manager, are offered only to residents of the United
States. Information on this Website is intended only for U.S.
residents.
