Performance information quoted above represents past performance and
does not guarantee future results. The investment return and principal value
of an investment will fluctuate so that an investor’s shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be higher or lower than the performance quoted herein. The
fund imposes a 2.00% redemption fee on shares held less than 60 days.
Performance data does not reflect the redemption fee. If reflected, total
returns would be reduced. Current month end performance may be obtained by
calling Shareholder Services at 866-202-2263 or visiting our website
www.fairholmefunds.com.
Price
to earnings ratio is a common tool for comparing the prices of different
common stocks and is calculated by dividing the current market price of
a stock by the earnings per share. Book value is the net asset value of
a company, calculated by subtracting total liabilities from total
assets. The adviser defines free cash flow as the cash a company would
generate annually from operations after all cash outlays necessary to
maintain the business in its curent condition. Dividend Yield is the
yield a company pays out to its shareholder in the form of dividends.
While the fund is no-load, a management fee and other expenses still
apply. Please refer to the prospectus for further details.
The
opinions expressed are those of the author and/or Fairholme Capital
Management, L.L.C. and should not be considered a forecast of future
events, a guarantee of future results, nor investment advice.
Investing in the Fund involves risk including loss of
principal. The Fund is non-diversified, which means that the Fund
invests in a smaller number of securities when compared to more
diversified funds. Therefore, the Fund is exposed to greater individual
stock volatility than a diversified fund. The Fund also invests in
foreign securities which involve greater volatility and political,
economic and currency risks and differences in accounting methods. The
Fund may also invest in “special situations” to achieve its
objectives. These strategies may involve greater risks than other fund
strategies. Investments in debt securities typically decrease in value
when interest rates rise. This risk is usually greater for longer-term
debt securities. Lower-rated and non-rated securities present greater
loss to principal than higher-rated securities.
Fund
holdings and/or sector weighting are subject to change and should not be
considered recommendations to buy or sell any securities.
Current
and future portfolio holdings are subject to risk.
Top
Ten Holdings by Issuer as of February 28, 2010
(Holdings may include both equity and fixed income securities of certain issuers mentioned below. Top holdings exclude cash and equivalents**)
| General Growth Properties |
14.6% |
|
The St. Joe Co. |
5.0% |
| Sears Holdings Corp. |
10.0% |
|
Humana, Inc. |
4.8% |
| Berkshire Hathaway, Inc. |
6.0% |
|
Bank of America Corp. |
4.7% |
| AmeriCredit Corp. |
5.7% |
|
CIT Group, Inc. |
4.5% |
| Citigroup, Inc. |
5.2% |
|
Hertz Global Holdings, Inc. |
3.7% |
The
Overall Morningstar Rating for a fund is derived from a weighted average
of the performance figures associated with its three-, five- and
ten-year (if applicable) Morningstar Rating metrics.
Established
in 1988, the Morningstar Fund Manager of the Year award recognizes
portfolio managers who demonstrate excellent investment skill and the
courage to differ from the consensus to benefit investors. To qualify
for the award, managers’ funds must have not only posted impressive
returns for the year, but the managers also must have a record of
delivering outstanding long-term performance and of aligning their
interests with shareholders’. The Fund Manager of the Year award
winners are chosen based on Morningstar’s proprietary research and
in-depth evaluation by its fund analysts.
Since
2005, GuruFocus.com names its Investment Guru of the Year every year. It
is done in December of each year with a democratic process controlled by
GuruFocus users. The process involves two steps. In the first step,
GuruFocus.com asks users to nominate their choices for Investment Guru
of the Year. The top 5-6 nominees will be put into a poll, and GuruFocus
users will be able to vote for their Investment Guru of the Year. The
voting usually lasts a week and the nominee who receives the most votes
will be named Investment Guru of the Year.
The
S&P 500 Index is a broad based unmanaged index of 500 stocks, which
is widely recognized as representative of the equity market in general.
Investors cannot invest directly in an index or average. Each
Morningstar average represents a universe of funds with similar
investment objectives. References to other mutual funds does not
constitute an offer of these securities. Must be preceded or accompanied
by a prospectus.
The
Fund Manager of the Decade award, which was awarded for the first time
in 2010, recognizes fund managers who have achieved superior
riskadjusted results over the past 10 years and have an established
record of serving shareholders well. While the awards focus on
perfomance over the past decade, Morningstar takes into consideration
other factors, including the fund manager’s strategy, approach to
risk, size of the fund, and stewardship. Both individual fund managers
and management teams are eligible, and being a previous winner of the
Morningstar Fund Manager of the Year award isn’t a prerequisite.
Morningstar’s fund analysts select the Fund Manager of Decade award
winners based on Morningstar’s proprietary research and in-depth
evaluation.
*
Includes other expenses and acquired fund fees of .01%. Acquired fund fees and expenses
are those incurred indirectly by the Fund as a result of investments in
shares of one or more investment companies, including, but not limited
to, money market funds.
**
Cash and equivalents include commercial paper, U.S. Treasury Bills, money market funds and deposit accounts.
Fairholme
Distributors, Inc.
WWW.FAIRHOLMEFUNDS.COM