In David's profile of MFLDX this month, he mentions that MFLDX has been sold to New York Life and will almost certainly get a sales load in October 2012. Couple of questions relevant to a potential investor:
1. If I buy no-load shares of MFLDX now, will I be able to continue buying no-load shares after October? Or is it likely that after October, only shares with load will be offered?
2. MFLDX is "no transaction fee" (NTF) at my brokerage now, but New York Life's MainStay funds are not. Is it likely that MFLDX will similarly lose NTF status after October?
Comments
2. Double check if Mainstay funds are TF funds at your broker. I see them as load funds, but not load + TF.
I'm very surprised that the fund has been sold - one of the bigger independent fund success stories in recent years, as people flee mutual funds - certainly no trouble attracting AUM. Why sell?
Edited to add: some answers here - http://www.mfwire.com/article.asp?template=article&storyID=40485&wire=MFWire&wireID=2
To be honest, I was surprised by the decision, since the fund has grown substantially in assets, simply because it has provided shareholders with terrific results. Perhaps it is just the success of growing assets that has caused this change. When a fund with a very small total management team grows from less than $50 million (when we first started using it in early 2009) to more than $2 billion in only 3 years, there must be some real growing pains.
For me, this is absolutely not a reason to liquidate. In fact, if I was an individual investor and did not already own MFLDX, I would certainly open a minimum position prior to the merger. It's hard to imagine that Aronstein & co will suddenly take dumb pills the minute NYL absorbs the fund. Are there concerns? Yep. I am always concerned.
Re: 1 Why do you say, "probably not, ... and that seems doubtful"? z-class shares are pretty common.
NYL/Mainstay took over the ICAP funds (e.g., ICSLX, ICEUX) a few years ago. Existing shareholders were grandfathered in to the NL institutional class. NYL committed to keeping the expense ratio the same for a certain period of time. After that period, they did raise the ER.
GLTA,
BWG
http://www.sec.gov/Archives/edgar/data/1141819/000089418912003675/mrktfld-tpm_pre14a.htm
(middle to bottom of page 20)
...Shareholders of the Fund (Marketfield fund) will receive Class I shares of the Acquiring Fund in connection with the Reorganization. Following the Reorganization, you will be eligible to purchase Class I shares, to the extent available, in any other fund that is part of the Mainstay Group of Funds, provided you continue to hold Class I shares in your account, including current accounts maintained at financial intermediaries. Because of the Class I eligibility requirements, Class I shares are not available for all financial intermediary firms, investment platforms or investment accounts. Therefore, if you move to a different financial intermediary, or the policies of your current financial intermediary change you may not be able to hold and/or purchase Class I shares of any fund in the MainStay Group of Funds or you may be subject to certain investment minimums or other restrictions, in addition to those found in the Acquiring Fund’s prospectus. Alternatively, you may maintain your account directly with the Acquiring Fund in order to continue to hold and purchase Class I shares. Please see the Acquiring Fund’s prospectus and SAI for additional information regarding Class I eligibility.
MFLDX was my substitute for SARIX (which used to be NARFX). Where do I go from here? Any suggestions? I don't see myself holding MFLDX beyond end of this year.
Personally I am not convinced by this asset class, due to the high fees and inconsistent performance. I am putting some money in PAUIX instead since I think these kinds of multi-asset, tactical allocation funds are a better vehicle for making bets on sweeping macro generalizations.
Royce Special Equity was an interesting fund that closed earlier this year, but even that manager is now running a separate Royce Special Equity Multi-Cap Fund. And once that fund closes I expect we'll see a new Royce Special Equity Global Fund and so on.
And then there's the Royce benchmarking scam: many of Royce's funds can hold up to 20% (or more) of international equities -- yet the benchmark is still the Russell 2000.
Based on Royce, I am very distrustful of fund buyouts, and will not be looking at MFLDX. Frankly, the only holding company that I think does a "good enough" job is Affiliated Manager's Group (wife holds Tweedy, Browne funds; which were bought out by AMG a while ago). If Tweedy's offerings start getting too clever for their own good, she's out. We're actively looking for replacements for our Royce holdings (will probably keep the micro cap fund since it is -- by necessity, sadly for LM -- closed to new investors.