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Frontier Equity Mutual Fund Charges High Costs (and Long-Term Losses)
Given its small size ($1.8 million in assets), one would expect that the fund would need to charge more than the average 1.54% that the average small cap growth fund charges. But Frontier Equity charges an 8% upfront sales charge, bringing total expenses to a whopping 14.14%.
While performance this year (and for the last 12 months) has been enviable – beating all but one of the nation’s 10,871 mutual funds, its long-term record has lagged substantially. The fund lost nearly 30% and nearly 40% in 1997 and 1998, respectively.
One potential problem moving forward is the fund’s making concentrated bets on relatively small companies. For example, the fund has 25% of its assets in Mitek Systems, a software developer with only $90 million in market capitalization.
Source: Investment News, April 17, 2000
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