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To: Knighty Tin who wrote (169555)	6/2/2002 4:30:03 AM
From: Night Trader	Read Replies (1) \| Respond to of 436258

Talking of dumb fund buyers, this from today's Barrons: Vanguard's bailout echoes CIBC World Markets' alternative-investment fiasco, a closed-end fund-of-hedge fund, the Advantage Advisers Multi-Sector Fund I. It raised only about $80 million in a first-round public offering this past spring. Just to be eligible, Advantage Advisers investors must boast a net worth of $1.5 million or more, and then plunk down a minimum of $25,000 to pass go. Beware mutual-fund companies selling "alternative investments" dressed up in mutual-fund clothing. They are often larded with fees. First, CIBC charges a 1.25%-management fee and 20% performance fee (the 20% applies to each of three underlying funds, so if one is up but the overall fund-of-funds is down, CIBC still gets an incentive fee on the gaining portfolio). A sales load of up to 5%, offering expenses of 24 basis points, plus one- year amortization of other offering expenses ($1 million) mean an investor will pay roughly 6.25% over the first year in sales load/offering costs. Add to that the 1.25% management fee, a shareholder servicing fee of 25 basis points (paid to brokers who hold for customers), and annual expenses estimated at 0.8%, and there's another 2.30%. Whew! Just in the first year, an investor pays an 8.55%, plus an incentive fee. No wonder investors stayed away. Quipped one observer on why CIBC raised just $80 million: "Guess the lumpenproletariat high-net-worth investor is not so stupid."