McElvaine Minutes
Why I call us the anti-mutual fund
We are a regulated mutual fund. Same rules, same filings, same protections as anything you could buy from a bank. We just try not to behave like one.
What it's about
Same rules, different habits
The structure is conventional on purpose. Being a regulated mutual fund means audited statements, an independent review committee, a prospectus, and a regulator who can ask us questions. We would not want it any other way, and neither should you.
What we try to do differently is everything the structure does not dictate. Most funds own a hundred positions or more; we own somewhere between 15 and 25, because we would rather know a few businesses properly than a great many vaguely. Most funds stay fully invested whatever the price; we hold cash when nothing meets our standards, which is uncomfortable but honest. And most funds grow over time, because under a flat fee on assets, growing is how the manager earns more.
That last one is the one worth understanding, because it quietly shapes how most funds behave. Our fees are built the other way around, so if the fund simply gets bigger we do not get richer.
The short version
Conventional structure, unconventional habits. We took the rules and the protections, and left behind the incentive to get as large as possible.
Keep going
Where this leads
The clearest place you can see all of this is in what we charge, and in who else is paying it.