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YaleFunds Taking MacroTrends Fund private

MacroTrends Fund, a series of Questar Fund, is being taken PRIVATE by YaleFunds Management and Research Co. The Fund will become YaleFunds MacroTrends Series, Ltd., a private Nevada limited liability company, closely held by the existing Fund shareholders as Members of the new company.

Mutual funds used to be the best way for most people to invest. But now, many mutual funds no longer provide top value or maximum performance. While mutual funds provide convenience and portfolio diversity, they have a few drawbacks. As the mutual fund industry becomes more and more competitive to attract investors, largely by means of marketing campaign, their performance becomes duller and duller:

Each fund is governed by a Board of Directors who sets the investment rules that are usually limited to reflect certain IRS rules for certain tax qualifications. The fund manager has to follow the rules carefully and without much flexibility. One aspect of the rules is to require the fund to be "fully invested" at all time. Such a requirement could work greatly when the general market is uprising, a bull market. However, it will be devastating during a bear market, as the fund manager has to obey the rules set by other people and has all the money fully invested and watch them to go down along with the market. Meanwhile, buying put options for hedging is also greatly limited. This alone probably explains why the vast majorities of funds in the country under perform the general market for the last two decades.

Fund fees hurt returns. Nowadays, mutual funds are highly regulated and are mandated with an administrator, an underwriter, a transfer agent, a custodian bank, and a distributor besides its fund manager. Each one of those service companies will in turn charge the fund a fee.

All of these make the Mangers feel helpless.

When we managed The MacroTrends Fund, our goal was to bring to the public the same investment strategies and trading experience that I had provided to private clients. But mutual fund is no longer the best investment vehicle to achieve that goal under the current economic and market conditions. A private investment company will allow me the flexibility to apply the strategies that we had great success with during both bull and bear markets.

By taking the fund private and becoming a member-owned limited liability company, we can further eliminate all the unnecessary rule-mandated service companies that exist not to improve the fund's performance but just to be there and charge fees. We will maintain the custodian bank, Union Bank of California, for IRA and money handling and the brokers for trading. The only fee in the future will be the management fee, which I have decided that we will waive it until our performance improves.

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