| | | Hi Ken, Re: AIM based Mutual Fund.......................
Some years ago our company, SignalPoint Capital Management, did put together a mutual fund to hold the
ten business sectors of the S&P 500 and manage those holdings with AIM. While we did well with it as a
fund, we weren't prepared to market it properly. It slowly gained Assets Under Management until the first
market swoon and then, like other mutual funds, it lost AUM.
We had a good product. But, when the fund fell to where the AUM no longer covered the costs of operating
the fund we cut our losses and closed it. If we'd started the fund earlier or maybe even later it might have
survived. Owners of the fund didn't understand our M.O. so sold their shares when we were attempting to buy
more of the fund's components. So, the cash reserve intended for accumulation ended up being used to
satisfy "redemptions" by investors. We were too small a company and too inexperienced to get it built to
a "mass" large enough to make it self-sustaining.
I always thought AIM was a perfect adjunct to an Investment Club. One would use Twinvest on new "dues"
coming into the Club's kitty for accumulation and when positions were large enough, then switch to AIM to
manage those positions over the long term. Results: 1) rational starting average cost per new position,
2) AIM's great risk management going forward. This can be done without the massive overhead expenses of
attempting to build, market and maintain a registered traditional Mutual Fund.
Thanks for asking.
Best wishes,
OAG Tom |
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