Author Archives: David Snowball

About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles. David lives in Davenport, Iowa, and spends an amazing amount of time ferrying his son, Will, to baseball tryouts, baseball lessons, baseball practices, baseball games … and social gatherings with young ladies who seem unnervingly interested in him.

July 1, 2022

By David Snowball

Dear friends,

As you read this, Chip and I will be on vacation in Door County, the idyllic peninsula just north of Green Bay, Wisconsin. While I’m sure there have been years when she and I more needed time away, I surely cannot remember when. I was introduced, this year, to the term “trauma-informed pedagogy” and to the realization that perhaps three-quarters of our young people have taken a few more hits than they’re currently capable of managing.

Having managed their mental health for the past year, we’re going to work on our own for Continue reading →

New Income: New Adventures, New Opportunities

By David Snowball

FPA New Income (FPNIX) is a remarkable fund, simultaneously conservative and aggressive. It is an absolute return-oriented fixed income fund that embodies FPA’s corporate discipline:  don’t buy it if you don’t have a margin of safety and the prospect of decent returns. The explanation of the fund’s investment strategy begins with a simple declaration: “We do not like to lose money.” It is simultaneously an unconstrained and a very constrained strategy. It is unconstrained in that it can invest pretty much wherever opportunities arise though at least 75% of the portfolio investments must earn the “High Quality securities” designation, with the remainder likely in cash or Credit Sensitive issues. It is very constrained, though, by a long-standing and non-negotiable absolute Continue reading →

Dirty sex, your spanked portfolio and planning for “the next market”

By David Snowball

Many and many a year ago, in the kingdom of ABC, Woody Allen was one of my very first guests. And we consented to take questions from an eager audience of mostly young people. Like ourselves.

The questioner looked like a high school girl and shouted to Woody from the balcony, “Do you think sex is dirty?”

Allen: “It is if you do it right.”

(Dick Cavett, “As the comics say, These kids today! I tell ya.” New York Times, 9/13/2013)

I’d rather hoped Continue reading →

June 1, 2022

By David Snowball

Dear friends,

Welcome to June and the unequivocal beginning of summer. I celebrated my 38th set of Augustana graduates.

Those of you who attend professional sports events think you’ve experienced “the roar of the crowd.” Pfah. Until you’ve been there on the moment when a young person becomes the first member of their family, ever, to earn a college degree, you’ve heard nothing.

I also bade farewell Continue reading →

Launch Alert: Artisan International Explorer Fund

By David Snowball

On 16 May 2022, Artisan Partners launched the Artisan International Explorer Fund (ARDBX / ARHBX). The fund is the public manifestation of their International Explorer strategy which launched in November 2020. Since inception, the IE strategy is up 41% annualized while its benchmark is up 31%. Currently, the fund is open only to advisors ($250,000 minimum) and institutions.

Artisan Partners is organized into autonomous management teams, each responsible for their own investment strategies and teams. This fund is overseen by the International Value team which is headed by David Samra and which advises the five-star Artisan International Value Fund. The IV team describes itself as Continue reading →

Conestoga Micro Cap Fund (CMCMX / CMIRX), June 2022

By David Snowball

Objective and strategy

The Fund seeks to provide long-term growth of capital. The plan is to invest in 25-40 microcap stocks that are attractively priced relative to their growth prospects. Across the firm, the managers favor companies which have sustainable earnings growth rates, high returns on equity, low debt levels, and capable management teams. The strategy aims to produce consistent returns with low volatility and reduced downside capture.

Adviser

Conestoga Capital Advisors, LLC. Headquartered outside of Philadelphia, Conestoga had its origins in the 1980s but Continue reading →

May 1, 2022

By David Snowball

Dear friends,

Welcome to May. May entered English in the 1050s from the Latin Maius, short for Maius mēnsis, “Maia’s month.” But who, you might ask, is Maia? She was a Greek god, eldest of the seven Pleiades, companion of Artemis, and mother of Hermes. The Romans, as was their habit, adopted and repurposed her as a goddess of the green and growing realm. Continue reading →

April 1, 2022

By David Snowball

Dear friends,

Spring is a time when we celebrate the small and uncertain signs of hope. Weighed down by the exhaustion of war and politics, pandemic and winter, we look happily at the first crocus to spring which shoulders its way through the autumnal leaf mold. We’re reluctant to invest too much in it, knowing that winter has not yet suffered its final defeat. (Here, anyway. Last Wednesday’s upper 60s was followed by Thursday’s measurable snow.) Continue reading →

Two cheers for active management!

By David Snowball

Devesh and I have an ongoing conversation about the value of active managers. He thoughtfully runs through the arguments – from consistency to tax efficiency – that led him to conclude, “not much value there.” Cool and sensible.

If you want to join the conversation but start with somewhat greater sympathy for the role of active managers, you might consider five arguments. Continue reading →

Elevator Talk: Jessica Jouning, First Sentier American Listed Infrastructure Fund (FLIAX)

By David Snowball

Since the number of funds we can cover in-depth is smaller than the number of funds worthy of in-depth coverage, we offer one or two managers each month the opportunity to make a 300-word pitch to you. That’s about the number of words a slightly manic elevator companion could share in a minute and a half. In each case, I’ve promised to offer a quick capsule of the fund and a link back to the fund’s site. Other than that, they’ve got 300 words and precisely as much of your time and attention as you’re willing to share. These aren’t endorsements; they’re opportunities to learn more. 

It’s someday. Continue reading →

February 1, 2022

By David Snowball

Dear friends,

Welcome to February. It’s a month frequently associated with the color red – as in Valentine’s Day hearts, chocolate boxes, and scandalous lingerie – but investors have started the year seeing a different kind of red.

Here’s a compendium of every Vanguard index mutual fund (one share class for each) but appearances by a handful of special guests. In one month, investors had YTD returns of … Continue reading →

Biggest Bang for your Buck

By David Snowball

Fresh from the MFO Archives! An update on a classic essay.

20 equity funds with the best capture ratios over the entire market cycle

Capture ratio is a sort of “bang for your buck” summary. It’s calculated by dividing a fund’s upside capture (a fund that typically rises 1.1% when the market rises 1% has an upside capture of 1.10) by its downside capture (a fund that typically falls 1.1% when the market falls 1% has a downside capture of 1.10). Capture ratios greater than 1.0 reflect funds that Continue reading →

Intrepid Income Fund (ICMUX)

By David Snowball

Objective and strategy

The fund’s goal is to generate current income. In particular, they want to offer an attractively higher yield than comparable maturity US Treasury securities without taking significant default or interest rate risk.

The managers invest primarily in shorter duration corporate bonds, both investment grade, and high yield. They might also own other income-producing securities such as securitized loans and convertible securities. Generally, the majority of securities in the portfolio are part of smaller issues of less than $500 million.

Comments

For investors, there is only one risk: Continue reading →

January 1, 2022

By David Snowball

Dear friends,

Merry Christmas and Happy New Year!

Let’s hope it’s a great one.

If you think I’m a bit late on the former, it’s because you think of Christmas as a day rather than as a season. Not so! In 567, the Council of Tours established that the twelve days between Christmas and Epiphany – also sometimes known as “Chip’s son’s birthday” – were to be treated as a single holiday. (Her sister was born on Christmas Day so it makes sense she waited to give David a reason to celebrate the other end of the holiday.) In England, in Continue reading →

Investing in 2022: The Indolent Portfolio

By David Snowball

Each year, usually in our February issue, I walk through my portfolio. It gives some folks the shivers, and others, a nice sense of superiority. On the whole, it seemed like a good idea to accelerate the schedule this year. I’ll walk through it using the same five-part process that we’ve urged on others.

Step One: Assess my goals and resources

My overarching goal is to have a portfolio that I don’t have Continue reading →

Terrific twos: Intriguing funds not yet on your radar

By David Snowball

Most funds don’t show up on investors’ radar until they have at least a three-year record, which is also the point at which they receive their inaugural Morningstar rating. That’s a generally sensible, sometimes silly constraint since many funds that have been operating for fewer than three years are actually long-tested strategies managed by highly experienced professionals, which are just coming to market in a new form. Relatively recent examples of such funds include Andrew Foster’s Seafarer Overseas Growth & Income (SFGIX), Rajiv Jain’s GQG Partners Emerging Markets Equity (GQGPX), Abhay Deshpande’s Centerstone Investors (CETAX), and Amit Wadhwaney’s Moerus Worldwide (MOWNX). Collectively, those four managers had overseen more than Continue reading →

Morningstar isn’t very good at mutual funds … and that’s a good thing

By David Snowball

Running them, not assessing them.

Morningstar runs a booming, global asset management business. They have $255 billion under management and advisement (as of 9/30/21).

Of that, $50.5 billion are assets under management, primarily through their Managed Portfolios and Institutional Asset Management services.

They also have 116,627 Morningstar.com Premium members and 17,182 Morningstar Direct licensees.

The managed portfolios traditionally used outside, actively managed funds. In 2018, Morningstar decided Continue reading →