"Trust me.
I created the Internet."
"Trust me.
I have a trillion dollars for everyone."
"Trust me.
We've closed our small cap fund to new investors."
Three election-season claims that should result in much blushing and averting of eyes|
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"Trust me. |
"Trust me. |
"Trust me. |
Well, yes . . . and no. Al didn't actually say he created the Internet (although he came mighty close). And Dubyah didn't exactly promise each of us a trillion (although he should probably cool his charges about Al's "fuzzy math").
But the folks at Turner Investment Partners do seem to have said, "we've closed our small cap fund":
"There are limits to the amount an investment adviser can effectively invest in certain asset classes. Too many advisers try to manage more and more money regardless of their capacity to find attractive investments. Turner Investment Partners will not do this. Turner will close a Fund to most new investors once assets under management reach certain specified levels. For the Small Cap Growth and Micro Cap Growth Styles, those specified levels have been reached, and the Small Cap Growth and Micro Cap Growth Funds are currently closed to new investors."
Source: Turner Combined Prospectus, June 30 2000
In fact, they've said it, and said it, and said it again:
"[W]e've established asset limits for most of our equity mutual funds. Once those funds reach a certain size, they are closed to new investors. We've set asset limits because we think we owe it to our shareholders to do our best in investment performance for them."
Melissa Redmond, Client Service Manager, Turner Investment Partners
"We believed that closing [Small Cap Growth] was the right thing to do for our shareholders."
Peter Moran, Chief Marketing Officer, Turner Investment Partners
"Our asset limitation policy has received a lot of media attention nationally, and we are proud to be regarded as a leader in that movement."
Peter Moran
"We practice what we preach. Turner Small Cap Growth was closed to new investors once its assets reached $123 million. . ."
Bob Turner, Chief Investment Officer, Turner Investment Partners, "Why More Funds Should Close," Mutual Funds, August 2000
"We have no desire to subadvise a small-cap growth fund for Vanguard or anyone else. Our Small Cap Growth Fund is already closed to new investors. If we took on more assets in small-cap stocks from new investors, it could conceivably jeopardize the performance of our Small Cap Growth Fund and our small-cap institutional portfolios."
Bob Turner, Morningstar.com news item, October 9, 2000
"At Turner, we keep our promises."
Mark Turner, Vice-President, Turner Investment Partners
Well, mostly, . . . I guess. Turner left a small, common, and pretty understandable loophole when they said, "most new investors." If you're a client of a favored investment adviser, you can still open a new account at the Turner Small Cap Growth Fund. That's a loophole you could drive a tiny, tiny car through.
But since most of us don't drive tiny, tiny cars, Turner was thoughtful enough to create another loophole, and this is one that you could comfortably drive your suburban assault vehicle through: The Preferred Small Cap fund. As of January 2000, Turner took over management of the Preferred fund – until then, a mediocre small-value fund - and created a clone of the Turner Small Cap Growth fund. The marketers of the Preferred Funds now promote Preferred Small Cap as an exact replica of Turner Small Cap Growth. And while there are some differences in performance between the two funds, Preferred explains that this is merely the residue of the transition period. The goal, Preferred claims, is two identical funds. Mr. Turner concurs. In answering a question recently posed by a Morningstar reader, Mr. Turner wrote:
"The only other small-cap fund that we manage besides our own Small Cap Growth Fund is the Preferred Small Cap Fund...We have no "clone" funds of any other existing fund."
Bob Turner, October 9 2000, italics added
In other words, Turner Small Cap Growth isn't really closed, since anyone who wants to can get in by a not-so-hidden back door. And the problems for the fund manager – of building and unwinding positions – are identical, whether Turner Small Cap Growth goes by one name or two. Which is directly at odds with Turner's very public, very pious stand.
If, on the other hand, Preferred and Mr. Turner are wrong, and Turner runs the funds differently, then the fund is being misrepresented, and the shareholders are being misserved. Which is also directly at odds with a very public, very pious stand.