Congressional Effect Fund Basics
What is SPY?SPY is the symbol for a SPDR “Exchange Traded Fund” or ETF. An ETF is an investment vehicle traded on stock exchanges, much like stocks are. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets. SPY holds shares of S&P 500 Index stocks and closely follows the overall Index’s value. When Congress is not in session, the Congressional Effect Fund utilizes SPY as an effective means of investing in the overall S&P 500 Index.
Management Information
Is the Congressional Effect Fund Actively Managed?Yes. An actively managed fund is not the same as an index fund. An index fund is passively managed, and seeks only to replicate the results of an underlying index. The Fund manager believes that active management allows the Congressional Effect Fund to offer investors the potential for above average returns.
Who is Matrix Fund Services? Matrix Fund Services is an operating division of Matrix Capital Group Inc., a third party that performs services for the Congressional Effect Fund. These include but are not limited to: accounting, administrative and back office support, recordkeeping, trade execution and regulatory compliance.
Who is the Fund Manager?The Congressional Effect Fund is managed by Eric Singer. Mr. Singer first published about the Congressional Effect in 1992 in Barron’s. He has over 25 years experience in finance, at such firms as Smith Barney, Paine Webber, and H.C. Wainwright, and ten years as head of Corporate Finance at Gerard Klauer Mattison & Co., Inc. He graduated from Cornell Law School, where he was on Law Review, and SUNY Stony Brook, where he was Phi Beta Kappa.
Purchasing Information
How can I buy the Congressional Effect Fund?There are several easy ways to invest in the Congressional Effect Fund. Investors can currently purchase the Congressional Effect Fund through Charles Schwab & Co, TD Ameritrade or E*Trade Financial. Please note, the Congressional Effect Fund no longer uses "Dummy symbols" at Schwab, E*Trade or Ameritrade. Please use the symbol CEFFX at the aformentioned brokerages. Individuals may also invest up to $50,000 directly through the Fund distributor, Matrix Capital Group, accessed via the Fund’s website by clicking here or by calling Matrix Capital Group shareholder services at 1.888.553.4233 between the hours of 9:00am – 5:00pm Monday through Friday.
Do you accept Institutional Investors in the Fund?The Congressional Effect Fund accepts institutional investors, such as investment companies, pension/endowment funds and foundations. In fact, a significant percentage of assets under management are held by institutions and foundations. To receive log in instructions to additional information and discussions geared to qualified institutional investors, contact us.
Charges and Expenses
Do all mutual funds charge fees? Yes. Mutual funds provide a variety of benefits that help make investing easy, more innovative and more liquid for the retail investor. These benefits and services, however, have a cost. Fees help cover the costs of managing the fund's portfolio of securities. They also are used to pay for producing account statements, computerized account services, auditing, recordkeeping, legal, printing and mailing.
What is an Expense Ratio? The expense ratio represents the Fund’s cost of doing business, disclosed in the prospectus and expressed as a percentage of its assets. The cost of doing business includes things such as investment advisory fee, the administrative costs, distribution fees, legal fees and other operating expenses.
Why does the Expense Ratio for the Congressional Effect Fund seem high? As a relatively young fund, the asset base of the Congressional Effect Fund is still smaller than many other funds. Under SEC rules, the prior year’s fees and assets comprise the reportable Expense Ratio, which, given a smaller fund may appear unusually high. Prospective investors can rest assured that, despite the actual Expense Ratio, the Fund manager has contractually agreed to waive fees and reimburse/cap expenses to maintain the Fund’s total operating ratio at 1.75%, excluding 12b-1 fees, through July 31, 2010. In addition, it is expected, although it is not for certain, that as the fund’s net assets grow, the 1.75% expense ratio will decline. Despite being a “No Load” Fund, some critics argue that even 1.75% is a “high” expense ratio. Remember that the expense ratio is only one of the many factors investors should consider before investing in a mutual fund. The Congressional Effect Fund launched on May 23, 2008 – and the remainder of 2008 was a “torture test” year for many financial investments. We welcome prospective investors to compare the Fund’s overall performance versus those of other Funds. Total performance, net of fees, is reported daily on the Congressional Effect website and our Morningstar ranking can be found here. Many mutual fund investors lost a considerable portion of their principle in 2008, as most mutual funds experienced large negative returns. Is it consolation to investors in these Funds to know that their Fund only carried a 1.25% Expense Ratio? We think not.
Fund Performance Information
Where can I track the Congressional Effect Fund’s performance? The Congressional Effect Fund performance is updated daily and reported on the Congressional Effect Fund website at www.CongressionalEffect.com or http://www.congressionaleffect.com/performance.php. In addition, Morningstar Ranking of all Funds categorized by Morningstar as “Balanced Moderately Allocated Funds” can be found by clicking here.
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