Beginning April 1, FPA, a leading value investing practitioner, will offer all of its FPA Funds as no-load funds. Now these will be available for direct purchase by the investing public without front-end sales charges.
“After careful consideration and analysis, we believe this decision is in the best interests of all FPA Fund shareholders by creating a better alignment of the Funds’ structure with their needs. Most significantly, this change combined with our low $1,500 minimum removes costly barriers for smaller investors who choose to manage their own investments,” Rich Atwood, Chief Operating Officer and one of FPA’s Managing Partners, said in press release
This change will affect the following funds as they’ve been structured as front-load mutual funds: FPA Capital Fund (MUTF:FPPTX), FPA New Income (MUTF:FPNIX), FPA Paramount (MUTF:FPRAX) and FPA Perennial (MUTF:FPPFX).
As for the FPA Capital Fund, it will stay closed to new investors while the shareholders of FPA Crescent (MUTF:FPACX) and FPA International Value (MUTF:FPIVX) will now have the opportunity to exchange between the other FPA Funds without having to pay a front-end sales charge.
This is good news for small investors as FPA has some great managers overseeing their funds and great fund rankings. The firms includes two 2008 Morningstar fixed-income managers of the year Bob Rodriguez and Thomas H. Atteberry, according to Barron’s Brendan Conway.
He notes that with the New Income fund’s manager, Rodriguez, FPA’s CEO, had been in the minority of those managers who had forecast the mortgage implosion in the financial sector and then took action.
Upon receiving his 2008 manager of the year honor, Morningstar’s Russell Kinnell wrote about Rodriguez saying: “From his perch in Los Angeles, Rodriguez had a good view of the insane housing speculation and the crazy mortgages behind them. As someone who places capital preservation above all else, Rodriguez works furiously to squeeze all forms of risk out of his portfolio. So, even before 2007, he steered clear of default risk, interest-rate risk, and any other kind of risk out there. True, it meant passing up the chance for big returns and, as has been the case before, he did miss out on some rallies. But when everything hit the fan in 2007 and 2008, the fund was on safe ground.”
As for the FPA Crescent Fund, it has a top 1 percent ranking in Morningstar, Inc. (NASDAQ:MORN)’s moderate-allocation category over the last 10 years. Its manager, Steven Romick, recently said of the fund via The Wall Street Journal, “I want to be able to invest all up and down the capitalization structure, wherever the best opportunity exists. He added that investing this way, it assists him to “provide an equity-like return with less risk” which is typically seen from stocks.
