Ryan Jacob's new offering, the
fund, hasn't even opened yet and already the numbers are heading north.
Unfortunately, this time it's the expense ratio, and it has gone up to 2.12% from its original projection of 1.91%.
But there is a silver lining for investors who just can't wait -- and you know who you are -- to get into this fund. The fund's advisor,
Jacob Asset Management
, has agreed to cap expenses at a flat 2%, at least until August 2000.
Jacob, former manager of the
Internet fund who bolted to start his own shop, says the tick upward was a minor recalculation as the fund gets ready to launch.
"We decided to be a little more conservative in terms of the projections," Jacob says. "We're telling investors that if it's over 2%, not to worry, the fees will be capped."
Since the fund isn't even in existence yet, its expense ratio is a pure estimate. And of course, any fund's expense ratio is dependent on the assets in the fund. Generally, smaller funds have higher expense ratios than do large ones, which benefit from economies of scale.
But Jacob's fund has a good chance at skipping the small stage, as there seems to be a lot of pent-up demand for it. Guessing when the fund will open has been a hot topic on message boards across the Internet this summer. When Jacob Asset Management put its own message boards up on its
Web site in August, they were quickly swamped with "when-can-I buy-in?" queries. The firm took the boards down.
Jacob's record at the Internet fund is surely fueling investor interest. During his 18-month tenure, the fund ballooned from a few hundred thousand dollars in assets to more than $700 million. And its return was 512%.
Jacob won't put a number on how much money he expects the new fund to receive, citing its registration period. But other recent Net funds have gained cash quickly. The
fund, for instance,
grew to nearly $20 million during its first month of existence, even though
Fred Alger Management
, the fund's adviser, didn't have Jacob's Internet cache. (It did, however, have brokers pushing it and the accompanying 4.75% sales charge.) Jacob Internet will be a no-load fund, distributed directly by the firm.
Still, with the stock market -- and especially the
-- heading south lately, investors may not be as hot to pour money into the fund now as they once were, which could explain why Jacob raised his estimate on the expense ratio. But if that's true, he sure doesn't show it. Asked what he thought about the market's recent downward trend, he praised the
market-deflating remarks that
president Steve Ballmer made on Thursday.
"I should send Steve Ballmer a nice gift for what he did yesterday," Jacob said Friday. "I mean, I went into a meeting and when I came out, the screens were all red. The last thing in the world I would really want is the sector to come back with a vengeance right before the launch."
But sorry, when that launch will happen is still anybody's guess, and Jacob's not saying. The post-
date that had been batted around for its debut came and went without any shares being sold.