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.

June 1, 2017

By David Snowball

Dear friends,

“And they’re off!” signals both the start of a horse race and the end of a class’s years at college.

Augustana just launched 485 more grads in your direction. It’s our 157th assault on adult life, and one of our largest. I’m pleased that Mike Daniels was the student selected to speak at commencement but he’s so durn Augie. Mike’s a defensive lineman, but also a jazz musician. He’s an accountant, but also a first team NCAA Academic All-American. He’s been to Italy (with the football team), but also managed to sneak in three internships on his way to working for Deloitte & Touche. He’s a good man who overtly rejects “good enough” as a goal; that is not, he said, Continue reading →

The Dry Powder Gang, updated

By David Snowball

“Put your trust in God but keep your powder dry.”

Oliver Cromwell, 1650, to the soldiers of the New Model Army as they prepared to forge an Irish river and head into battle.

Cromwell was a dour, humorless (or “humourless”) religious fanatic charged with squashing every Catholic and every independent thought in the British Isles because, well, that’s what God demanded. Famine, plague, deportations, mass death and deportations followed.

But even Cromwell knew that the key to victory was Continue reading →

Time to put on your big-boy pants and check your investments

By David Snowball

As I noted in my publishers letter this month, this article, originally published in May, contained a substantial and utterly boneheaded mathematical error. After we published it, two things happened: first, readers took the article seriously enough to find the error and report it; second, our colleague Charles, substantially revised the method for calculating the maximum drawdown for funds in my portfolio which haven’t been around for a full market cycle. Because those changes were material, we decided to re-present this article as a public service.

Sorry, I don’t have a really gender-neutral alternatives to “big-boy pants.”

In all likelihood, you might expect to experience considerable ugliness in financial markets in the months ahead. That’s not a timing call, it’s a statement of the obvious.

What’s behind it?

The bull market in stocks is Continue reading →

Funds in Registration

By David Snowball

Before fund companies are allowed to offer mutual funds to the public, they need to submit them to SEC review. The SEC has 75 days to ponder the fate of the newly-registered funds before allowing them to proceed. The registration period is also called “the quiet period” because fund companies are not allowed to talk about their funds in registration. Happily, we are! The once-steady flow of 20-30 new funds a month has dwindled to a half dozen, many of which are simply converted versions of hedge funds or separately managed accounts. The former are more common this month, with five hedge funds morphing into two new mutual funds, including an unprecedented four-for-one merger and conversion offered up by Driehaus. Continue reading →

Briefly noted

By David Snowball

It’s been an unusually busy month in the industry, with nearly three dozen funds liquidated or slated for liquidation, as well as a surprising number of open funds closing to new investors and closed funds opening to them. And, as ever, the “smoke and marketing” crowd has re-branded a bunch of funds; most, not surprisingly, aren’t very good. Continue reading →

May 1, 2017

By David Snowball

Dear friends,

The theory says that our academic year ends in two weeks. As I gazed this morning across rows of slightly-stunned faces, I realized that the college’s schedule and the students’ don’t always align.

With the weather turning toward summer, the lawn calling and the campus in bloom, I’m intensely sympathetic. Continue reading →

Morningstar Investment Conference 2017: Six smart guys

By David Snowball

I’ll tell you about the six smart guys. They represent a bit over half of the interviews and discussions I participated in during Morningstar’s annual Fest at the McCormick. My normal schedule mixed one-on-one interactions with sitting in on panels and keynote presentations; the changing emphasis of the conference, rather away from hearing from mutual fund managers and strategists, and toward the business concerns of the advisors, led me to focus exclusively on talking with interesting folks.

Many of these interviews will serve as the seedbeds for upcoming fund profiles. In particular, we hope to celebrate Continue reading →

RiverPark Short Term High Yield Fund (RPHYX/RPHIX)

By David Snowball

This is an update of a profile first published in July 2011.

Objective

The fund seeks high current income and capital appreciation consistent with the preservation of capital, and is looking for yields that are better than those available via traditional money market funds. They invest primarily in high yield bonds with an effective maturity of less than three years but can also have money in short term debt, preferred stock, convertible bonds, and fixed- or floating-rate bank loans. 

Adviser

RiverPark Advisers. Executives from Baron Asset Management, including Continue reading →

Elevator Talk: Adam Strauss, Appleseed Fund (APPLX/APPIX)

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’ve decided to offer one or two managers each month the opportunity to make a 200 or 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 200 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.

Adam Strauss is, along with his brother Joshua, one of the three managers of Appleseed Fund. Both joined the firm in 2004 after careers outside the financial services sector. The third manager, Bill Pekin, has been Continue reading →

Launch Alert: Rondure Overseas Fund and Rondure New World Fund

By David Snowball

On May 1, 2017, Rondure Global Advisors, headquartered in Salt Lake City and one of the nation’s few woman-owned fund advisers, launched Rondure New World Fund (RNWIX/RNWOX) and Rondure Overseas Fund (ROSIX/ROSOX ). Rondure Global operates in partnership with Grandeur Peak Global, which offers back office and trading support, as well as the opportunity for collegial investment discussions. Rondure’s founder, CEO and lead portfolio manager is Laura Geritz, who describes this partnership as “one of our key competitive advantages” since it will give her the opportunity, rare for a manager launching a new firm, to focus on investment rather than management.

Both funds will follow the same Continue reading →

Funds in registration, May 2017

By David Snowball

A couple of this month’s nominally “new” funds are actually repackaged versions of existing products.  Congress Small Cap Growth Fund is just the reorganized version of Century Small Cap Select Fund (CSMVX), a two-star small cap growth fund with a 17-year record. Long-time manager Alexander Thorndike gains a co-manager, Gregg O’Keefe. Similarly, Oak Ridge Global Resources & Infrastructure Fund is a new name for Ridgeworth Capital Innovations Global Resources and Infrastructure Fund (INNAX), a solid but tiny fund. Sadly, that might be the most interesting stuff going on this month. Continue reading →

Briefly Noted . . .

By David Snowball

On April 20, 2017, UMB announced that it signed an agreement to sell Scout Investments and Reams Asset Management to Carillon Tower Adviser, a wholly owned subsidiary of Raymond James. In announcing its 2016 creation, James described Carillon as “new company to provide transparency and create efficiencies among its asset management firms.” As I note in our story on the Morningstar interviews, Carillon wasn’t particularly transparent and the guy representing Scout was curt to the point of being rude.

Sentinel Asset Management has agreed to sell its mutual funds to Touchstone. Details aren’t yet available.

The previously announced plan to Continue reading →

April 1, 2017

By David Snowball

Dear friends,

Welcome to spring!

The weather’s getting better. It’s not clear that the quality of writing about mutual funds is.

“This couple followed the 11 tips to picking good mutual funds and now they’re rich!”

Ummm … they’re lying on a bed of British pounds so unless they made a Continue reading →

Morningstar to the industry: Move over. We can do it better ourselves.

By David Snowball

On March 6, 2017, Morningstar announced their intention to displace 50 existing mutual funds from their $30 billion Morningstar Managed Portfolio program and replace them with nine brand-new Morningstar-branded funds. Understandably, there’s been a bit of interest in the financial media, though much of it is behind paywalls. (I’m not complaining, by the way. Journalists need to be compensated.) The most notable “free” articles are:

Advisers split on Morningstar’s new mutual funds

Morningstar makes bid to offer mutual funds for exclusive use of advisers

Like everyone else, Morningstar expands its advisory business

By far the most thorough and balanced piece was How and why Morningstar sliced 16 bps for RIAs by dumping third-party mutual funds and stamping its Switzerland brand on its own mutual funds, written by Janice Kirkel of RIABiz. Continue reading →

Northern Global Tactical Asset Allocation (BBALX)

By David Snowball

Objective

The fund seeks a combination of growth and income. Northern Trust’s Investment Policy Committee develops tactical asset allocation recommendations based on economic factors such as GDP and inflation; fixed-income market factors such as sovereign yields, credit spreads and currency trends; and stock market factors such as domestic and foreign earnings growth and valuations. The managers execute that allocation by investing in other Northern funds and ETFs. As of 12/31/2016, the fund held two Northern funds and nine ETFs.

Adviser

Northern Trust Investments is part of Northern Trust Corp., a bank founded in 1889. The parent company provides Continue reading →

Launch Alert: 361 US Small Cap Equity ASFQX

By David Snowball

On December 30, 2016, 361 Capital Management launched 361 US Small Cap Equity (ASFQX). This fund is the newest embodiment of an investment strategy initiated by John Riddle and Mark Jaeger of BRC Investment Management. Messrs. Riddle and Jaeger co-founded BRC in 2005, then merged with 361 Capital in October 2016. BRC was managing about $800 million in assets at the time of the merger, 361 had about $1.3 billion.

What do you need to know? Continue reading →

Funds in Registration

By David Snowball

Some months, fund registrations are just weird. Perhaps that’s “the new normal,” a phrase that we’re allowed to use again now that former PIMCO chief Bill Gross and current PIMCO management have hugged, made up and announced that they can’t even remember what the silly fight was all about. PIMCO wrote a check of $81 million to Mr. Gross, which Mr. Gross rounded up to $100 million … and gave it to his own charitable foundation.  Beyond that, a fund about childhood, one with a $350 million minimum investment, nine Morningstar funds that you can’t have (and might not want), three inexplicable ones and a couple that are reasonably promising. Continue reading →

Briefly Noted

By David Snowball

Updates

Third Avenue Management, Marty Whitman and former president David Barse have agreed to a $14.25 million cash settlement of a lawsuit brought on behalf of investors in Third Avenue Focused Credit. The fund, if you recall, made headlines first through huge losses in the completely illiquid positions that dominated the portfolio, then by moving all of its assets into a locked trust which kept investors from reclaiming their money. The plan was to liquidate the illiquid when “rational” prices prevailed; after about 18 months, that process is still not complete. The whole mess has cost Third Avenue over $3 billion in assets and threatened its Continue reading →

March 1, 2017

By David Snowball

Dear friends,

 It’s spring! Could you tell the difference where you are? March 1 is the beginning of “meteorological spring” and I’m indisputably in the middle of Augustana’s Spring Break. (It always looked better on MTV.) Spring training has begun for major leaguers while Augie’s baseball team is currently 5-1 on their swing through Florida. I’ve just placed my order for a flat of native prairie plants (the “Happy Hummer” collection plus a few extra Jack in the Pulpit, Chip’s favorites) and have been paging through the Burpee’s catalog.

The announcement of spring does seem a bit tardy. Our February saw more 70 degree days than days with snow. Coming into this month, the Quad Cities had seen three 70 degree February days ever. We had five 70 degree days in the last 10 days of February, including the warmest February day in Continue reading →

Snowball’s potato portfolio

By David Snowball

I like gardening rather more than I like investing. I garden because it’s joyful, healthy and engaging. Most recently, I planted my first potato patch with four artisanal varieties of tubers, one each of russet, gold, red and blue. That meant adding a considerable quantity of organics and a bit of sand to a 4×4 south-facing patch that had been mostly weeds. You’re also supposed to “hill up” potatoes as they grow but I couldn’t, for the life of me, figure out quite what that meant in the context of an open patch of earth. Instead, I collected grass clippings (a safe practice since I don’t chem my lawn) and kept everything but the leaves buried.  I’m stunned and delighted to report that it actually worked. I dug around in October and there was, like, food in the ground! Continue reading →