Looks like Monument Funds is preparing a new genomics fund, but take a close look at its DNA before you break out your check book.
The Bethesda, Md.-based fund shop has filed paperwork with regulators for the
fund. Since the filing is dated Wednesday, the firm could launch the fund soon if regulators approve its prospectus.
Genomics is the scientific study of human genes and a buzzword in recent years thanks to the Human Genome Project -- a public/private effort to map human DNA, in part to find the roots of disease. The firm already offers the
Monument Medical Sciences fund, which has a generally solid if brief track record. The Genomics fund and the Medical Sciences fund will share manager Alidad Mireskandari, a former consultant in the biotech industry. He took the reins of the Medical Sciences fund back in March when manager
Alexander Cheung left the firm.
While it may be intriguing to focus on a seemingly hot sliver of a hot sector -- health care funds are this year's top-performing category -- doing so comes with a slew of risk. Internet funds, for instance, were among the industry's highest fliers in recent years, but they're suffering
titanic losses this year. Monument is part of this troubling pattern -- three of the firm's four funds are sector funds -- because its
Monument Internet fund (now called the
Monument Digital Technology fund) was 1999's top Net fund with a 273% return, but it's down more than 45% this year.
There's only one other "genomics" fund out there. It's the no-load
GenomicsFund.com, which launched back in March and sports the catchy ticker GENEX. Over the last three months the fund is down 7.7%, trailing 98% of its peers, according to
Beyond its significant risks, the Monument Genomics fund won't be the cheapest on the shelf. The Fund's Class A shares will levy a maximum 5.75% front-end load or sales charge, while its Class B shares will carry a maximum 5% back-end load. Class C shares will carry a maximum 1% front- and back-end sales charge.
The average health care fund's annual expenses are 1.71%, but this fund will top that by a wide margin. Class A shares' annual expenses are estimated to be 2.75% and 3.25% on Class B and Class C shares.