Investors in the $96 million Credit Suisse Small Cap Growth Fund may think the 32%, 12-month total return is good until they get a look at its sister fund, Credit Suisse Institutional Small Cap Growth. The $2 million institutional version is up 61% in the same period, even though the two funds have the same management team and virtually identical investment objectives and stocks.
One difference: The institutional fund owns preferred shares of Prescient Systems, which makes software for supply chain management. Since the stock is illiquid, the fund used "fair value" pricing -- essentially an estimate of its worth. On Apr. 30 the fund's directors increased Prescient's value almost thirtyfold. That caused the fund to jump 16.8% that day, while the retail fund lost 1% along with the broader market.
Why didn't the retail fund own Prescient, too? "The prospectuses may look very similar, but the funds are not required to own the same securities," says Steven Plump, managing director at Credit Suisse Asset Management. Maybe so, but why did the same managers with the same goals choose to favor one with Prescient shares and not the other? That's something shareholders may want to ask.
Instead of reaching for some forgettable potboiler for this summer's beach reading, consider choosing a book from the collection J.P. Morgan Private Bank recommends to its clients. On its eclectic list of 10 nonfiction titles compiled every summer is Eats, Shoots & Leaves: The Zero Tolerance Approach to Punctuation by Lynne Truss; Modern Glamour: The Art of Unexpected Style by Kelly Wearstler; George Plimpton on Sports; and Rambam's Ladder: A Meditation on Generosity and Why It Is Necessary to Give by Julie Salamon.
Wyoming gets a good chunk of income from taxes on oil and natural gas produced within its borders. As a result, its residents are so little taxed that Wyoming was named the wealth-friendliest state by Bloomberg Wealth Manager. The survey compares the impact of state taxes on salary, real estate, personal property, and retirement assets. Nowhere are state taxes more punitive than in Rhode Island. But tax cuts have caused Massachusetts to shoot up to 25th, from 35th in 2000, while Hawaii jumped to 14th from 39th.
Berthed at Navy Pier on San Diego's Embarcadero, the decommissioned USS Midway opens this month as the San Diego Aircraft Carrier Museum. For $13 you can take an audio tour of the mess and hangar decks, the flight deck with its eight vintage aircraft, and the "island," the ship's above-deck command center. It's open daily 10 to 5; plan on three hours.