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Trailblazing Mutual Fund Refuses To Invest In "Too Big To Fail" Banks Beginning July 1

Tyler Durden's picture


Some interesting developments in the mutual fund arena, where a trailblazer, the Appleseed Fund, has announced that beginning July 1 it will no longer invest in Too Big To Fail banks: "Given the failure of regulators to prevent the previous credit crisis
and the subsequent failure of legislators to break up the massive and
very much interconnected banks that helped to create the crisis, it is
incumbent on depositors and investors to vote with their wallets. Until
the financial system is truly restructured, the Appleseed Fund will
avoid investments in too-big-to-fail banks, choosing instead to invest
in regional banks, community banks, and credit unions which lend money
to families and businesses that operate in the productive sectors of our

We applaud this action and we hope that more major mutual fund managers realize that America's current course is one of certain disaster. Additionally, as has been the case for many months, we urge readers to move their deposits out of TBTF fails, and to cease trading in a grossly manipulated stock market. The only way to enforce a real version of "financial regulation" is to take away the capital of those who are untouchable to true reform instituted by a corrupt and captured congress and senate.

Full release:

Appleseed Fund Determines That "Too-Big-to-Fail" Banks Are Also
"Too-Big-to-Own" Banks

CHICAGO, IL--(Marketwire - July 8, 2010) -  Appleseed Fund, an
equity mutual fund which invests in sustainable, undervalued companies,
has amended its sustainability screening criteria to exclude
"too-big-to-fail" banks, effective July 1st, 2010. Appleseed,
the top performing mid-cap value fund over the three year period ending
June 30th, 2010, has generated total returns exceeding the
S&P 500 since inception by 12.2% per year. Appleseed is the first
mutual fund to create an explicit exclusion for too-big-to-fail banks in
its investment selection process. 

Adam Strauss, one of the Fund's co-portfolio managers,
explained the change: "The cost of bailing out Wall Street since 2008 is
over $3 trillion, or more than $20,000 per taxpayer, and that cost is
increasing daily. The financial burden of that bailout will be felt for a
generation and will be paid by children, some not yet born. Instead of
an industry structure where the largest banks are serving the economy by
lending capital, U.S. policies and regulations favor the largest banks,
which have proven themselves incapable of fiscal rectitude.

"The banking system's current industry incentives are
misaligned since employees keep a disproportionate amount of the profits
while taxpayers subsidize the losses; this unhealthy imbalance is
unsustainable and encourages excessive financial speculation. In the
financial reform bill which recently passed the House of
Representatives, Congress failed to break up or limit the size and scope
of the largest banks that have destabilized the financial system and
destroyed so much value over the past five years. We were disappointed
lawmakers did not stand up to the banking lobby in order to avoid future
bailouts. Without meaningful reform, we fear the next crisis will be
larger and more devastating than the last.

"Given the failure of regulators to prevent the previous
credit crisis and the subsequent failure of legislators to break up the
massive and very much interconnected banks that helped to create the
crisis, it is incumbent on depositors and investors to vote with their
wallets. Until the financial system is truly restructured, the Appleseed
Fund will avoid investments in too-big-to-fail banks, choosing instead
to invest in regional banks, community banks, and credit unions which
lend money to families and businesses that operate in the productive
sectors of our economy."

About the Appleseed Fund:

  • Appleseed Fund manages $133 million.
  • Appleseed Fund (NASDAQ:
    was ranked by Morningstar as the #1 returning U.S. midcap value fund
    among 329 funds for the three years ended June 30, 2010, and the #1
    returning socially responsible (SRI) domestic equity fund among 194
    funds for the same period.
  • Morningstar rates Appleseed as a five-star mutual fund
    as a result of Appleseed's risk-adjusted performance.
  • The Fund is managed by Pekin Singer Strauss, a
    Chicago-based value-oriented investment firm established in
    1990. Appleseed Fund's portfolio managers are also Appleseed Fund
  • More information can be found on the Appleseed Fund

Required Disclosures:

Through 6/30/2010, the Appleseed Fund
generated a one-year return of 20.3% and an annualized return of 5.7%
since the Fund's inception on 12/08/06. 
The Fund's
past performance does not guarantee future results. The investment
return and
principal value of an investment in the Fund will
fluctuate so that an investor's shares, when
redeemed, may be
worth more or less than their original cost. Current performance of the
may be lower or higher than the performance quoted. The
gross expense ratio of the Fund is 2.09%, and the net expense ratio
after contractual fee waivers is 1.31%. The advisor has contracted with
the Fund to waive fees to maintain a 1.24% expense ratio (excluding
indirect expenses) for shareholders of the Fund through January 31,

h/t Adam



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Thu, 07/08/2010 - 11:24 | 458363 jbc77
jbc77's picture

Got to give those guys some respect, they are saying fuck you to investing in psycho path banks.

Thu, 07/08/2010 - 14:54 | 458812 chet
chet's picture

Kudos to these guys, but much more of Wall Street should be out in front in calling out the TBTF system and Congress' unwillingness to do anything about it.

Wall Street has a lot more credibility making statements like this then capitalisms traditional critics.  Those Wall Streeters who are silent are actively contributing to the degradation of the capitalist system and its replacement by the government/financial complex.

Thu, 07/08/2010 - 11:30 | 458368 doublethink
doublethink's picture


Vote with your wallet.


Thu, 07/08/2010 - 11:31 | 458372 ratava
ratava's picture

since when is selling electrons to each other for rapidly increasing prices not a productive sector of the economy.

Thu, 07/08/2010 - 12:58 | 458548 aint no fortuna...
aint no fortunate son's picture

"selling electrons to each other" - PERFECT!


I've done business with community banks my entire life and will continue to do so until there are no more community banks left.

Thu, 07/08/2010 - 13:11 | 458576 ratava
ratava's picture

the question is what do we do about it. derivatives are nothing more than a way of creating counterfeit money. they are a way of winning money the loser never had in the first place. it is like some sort of sick multiplayer game where hackers found a way of creating fake gold indistinguishable form real gold and then paid the developers to not fix the bug with freshly created fake gold.

Thu, 07/08/2010 - 11:34 | 458378 jkruffin
jkruffin's picture

This is excellent, and one more step needed to be taken by many more funds.

Thu, 07/08/2010 - 11:35 | 458380 Jason T
Jason T's picture

Remember Blago?  "I've ordered my state agencies to NOT do business with Bank of America"


the next day, FBI raids his office.  


Good luck to this man who has decided to vote with his wallet.  



Thu, 07/08/2010 - 11:51 | 458406 Hdawg
Hdawg's picture

The Fed will rip that fund to shreds

Thu, 07/08/2010 - 12:51 | 458536 traderjoe
traderjoe's picture

They're too small. The sheeple are still trying to figure out how to hold their iPhone 4's. No one will notice but the same people who believe in the PPT. 

Thu, 07/08/2010 - 11:56 | 458413 Renfield
Renfield's picture

Waiting for the first negative MSM stories featuring Appleseed Fund. Can't wait to hear if: a) someone 'betted against' housing and got rich shorting; b) someone 'betted against' the USA and got rich shorting; or c) old tried-and-true honeytrap and marriage/family problems.

Thu, 07/08/2010 - 11:58 | 458416 walküre
walküre's picture

I'm actually considering an account with them.

Thu, 07/08/2010 - 12:18 | 458454 Jonas Parker
Jonas Parker's picture

Johnny "Appleseed" is now wearing a big target on his back. I can see Geithner and Bernake loading their muskets now...

Thu, 07/08/2010 - 12:29 | 458471 Cyan Lite
Cyan Lite's picture

According to their website, the fund has 16% in cash, and 8.8% in GLD.

Thu, 07/08/2010 - 17:51 | 459353 DosZap
DosZap's picture


Oh well,it SEEMED like a good firm, until you posted the holdings.......8.8% GLD.(fake as  Pam Andersons teats.)

I refuse to have any account that has an association that is continuosly screwing physical holders, and mkt playing, with shareholder funds, that continues to prop up the Squids.

Of course, most of these funds are clueless................

Thu, 07/08/2010 - 12:36 | 458491 jsehl
jsehl's picture

It's a shame that without the suspension of mark-to-market accounting, the regional banks would be insolvent, too.

Thu, 07/08/2010 - 12:52 | 458538 traderjoe
traderjoe's picture

True dat. 

Thu, 07/08/2010 - 13:15 | 458592 Lucky Guesst
Lucky Guesst's picture

Reminds me of a website I found a while back. The Free State Project

20,000 people are going to boycott losers and all move to the same area! "A new strategy for.... Liberty in our lifetime"

Thu, 07/08/2010 - 15:42 | 458944 faustian bargain
faustian bargain's picture

They're doing it in northeast Wyoming as well.

Thu, 07/08/2010 - 17:56 | 459367 DosZap
DosZap's picture

Poor schmucks, makes it so much easier to get picked up........gather together, then it's a lot easier.

Warsaw Ghetto...................Jr's.

Thu, 07/08/2010 - 13:18 | 458599 Blano
Blano's picture

FITB, PNC etc. etc. are just BAC/WFC/JPM Lite, so if they're willing to invest with the regionals, I don't see much to applaud about.

Thu, 07/08/2010 - 13:36 | 458640 Ripped Chunk
Ripped Chunk's picture

Wow! There is some common sense investing.

If We The People were to organize and withdraw all deposits from the TBTF tomorrow before noon, we would see the emperor naked with his pin dick visible for all to see.

Lets see Ben & Timmy cover that up.

Thu, 07/08/2010 - 18:00 | 459384 DosZap
DosZap's picture


Good luck, as they have no way near enough cash to take care of one person...........if it's over 15-20k.

Would take them at least a week advance notice per depositor, to get it, and I bet some folks would be stationed there on a daily basis, taking names.

Thu, 07/08/2010 - 13:46 | 458659 cowdiddly
cowdiddly's picture

I would like a Prospectus.

Thu, 07/08/2010 - 14:20 | 458718 JHCM
JHCM's picture

Not to be too cynical, but how many TBTF banks fall into the mid-cap value universe?

Thu, 07/08/2010 - 14:58 | 458823 tony bonn
tony bonn's picture

god bless appleseed!!

Thu, 07/08/2010 - 15:21 | 458882 Snidley Whipsnae
Snidley Whipsnae's picture

Meredity is at it again and making some waves with her downgrades...and loose the dogs of war...

"Ahead of Q2 Results, Meredith Whitney Slashes Estimates on Goldman (GS), Morgan Stanley (MS)"

"Meredith now sees Goldman reporting Q2 EPS of $1.70, down from her previous estimate of $4.75 and compared to the current Street consensus estimate of $2.34. Q3 EPS estimate moves from $4.24 to $3.77, which compares to the Street estimate of $4.10. For FY10, Meredith is now expecting Goldman to report $15.70, down from $20 previously. The Street is looking for FY10 EPS of $16.76."

...hat tip to Jesse's Cafe Americain

Thu, 07/08/2010 - 18:01 | 459387 DosZap
DosZap's picture

Kesse, has had TWO great pieces this week,,,,,,Kudo's Jesse'!!!!!!!!!

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herry's picture

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