We’ve scheduled our year-end review webinar for Tuesday, 6 January at 9 am Pacific (noon Eastern). We will use MultiSearch Screens and other site tools to highlight performance of funds across different market segments, as described in our latest post A Good Year. Please join us by registering here.
Welcome to the New Year’s issue of the Mutual Fund Observer. We’re glad you’re here.
Heraclitus, the famously elusive Greek philosopher, reminded his students that you cannot step into the same river twice. Both we and the river will have changed. According to legend, one of those students – snarky little barstid – replied: “I don’t think you can step into the same river once.” Even as we step, the river flows and changes.
As do we. Continue reading →
Sections: Climate and energy / Public health / Conservation & wildlife recovery / Social progress / Innovation & technology
For the first time in the industrial era, renewable energy generated Continue reading →
For most accounts, my primary investing objective is risk-adjusted return with dividends reinvested. I have set up automated withdrawals to transfer money from a conservative Traditional IRA (Core TIRA) in the Intermediate Investment Bucket to the Short-Term Investment Bucket. Having a steady income just took on a higher priority.
In this article, I look at how historical distributions fluctuate according to either the interest rate cycle or the stock market cycle, along with Continue reading →
Ninety years ago, emergent science and a self-assured entrepreneur came together to offer a quick and cheap solution to an intractable problem.
The press loved it. The public became enamored, and demanded more and more of it. The Nobel committee awarded a Prize for it.
It seemed like a good idea at the time.
It always does. Continue reading →
And what their answers tell you.
In mid-December 2025, I asked five AI systems – ChatGPT, Claude, DeepSeek, Grok, Perplexity – the same deliberately unfair question: “given current market condition and historic patterns, what is likely to be the highest returning asset class available to US investors in 2026?” The question is unfair because nobody can know that until 2027, and because it ignores all of the important stuff, information about the investor’s horizon, needs, and temperament, which is vastly more important than raw returns information.
Every system rushed to answer rather than Continue reading →
Since our January 2026 issue has two distinct, cautionary essays on the incursion of artificial intelligence chatbots into our lives, schools, and portfolios, it’s important for you to understand the role of AI at MFO.
Every single article is conceived and written by one of three human beings: Snowball, Lynn Bolin, or The Shadow. All of them are reviewed, cleaned, edited (and occasionally snickered at) by one of two human beings: Raychelle and Chip. Whether the argument or the writing is sublime or execrable, it’s human. Continue reading →
I recently automated withdrawals from one conservative Traditional IRA (Core TIRA) into my short-term investment bucket for basic spending needs and emergencies. Previously, I automated withdrawals from a more aggressive Traditional IRA for longer-term discretionary spending needs. This exercise increased my focus on income. I just added Janus Henderson AAA CLO ETF (JAAA) to my Core TIRA sub-portfolio as a lower-risk income fund rather than to pursue higher returns.
The Core TIRA is conservate Traditional IRA, within the Intermediate Investment Bucket, that is intended to have long-term returns of Continue reading →
Star manager Tiffany Hsiao returned to Matthews Asia in mid-November after a stint managing a private fund for Artisan Partners. In mid-December, she was joined by two members of her team from Artisan. It does not appear that she’ll be responsible for individual funds just now but will, instead, work with Mark Headley and the existing Matthews managers “to generate new perspectives and insights across portfolios.” This is unalloyedly good news for Matthews investors, and Continue reading →
Dear friends,
Welcome to the December Mutual Fund Observer, and to the holiday season.
The Christmas of the early American republic would be barely recognizable to us. In many colonies, it was a workday, ignored or mistrusted; only some immigrant communities treated it as a true festival. You’ll remember the Christmas of Continue reading →
Setting aside uncertainty this year over tariffs, affordability, a slowing economy, high stock market valuations, and government shutdowns, this article is focused on the long-term risk of the next financial crisis. I am not worried about a gloom and doom scenario. I do want to have a portion of my overall portfolio prepared for another financial crisis or currency devaluation, whether it is associated with the next bear market or one after that.
This Time Is Different – Eight Centuries of Financial Folly (2009) by Carmen M. Reinhart and Kenneth S. Rogoff covers debt cycles and financial crises: Continue reading →
MFO’s founding mission is to “write for the benefit of intellectually curious, serious investors— managers, advisers, and individuals—who need to go beyond marketing fluff, beyond computer-generated recommendations and beyond Morningstar’s coverage universe.” But one of our core precepts is “80% of all existing funds could disappear today with no loss to anyone, except possibly the managers who have to explain it to their spouses.” The goodriddance group includes two overlapping sorts of idiocy: (1) many are launched Continue reading →
On October 1, 2025, GMO launched the GMO Domestic Resilience ETF (DRES), bringing the firm’s time-tested quality-focused investment discipline to a distinctly contemporary challenge: identifying companies positioned to benefit as manufacturing, defense production, and critical supply chains return to U.S. soil. DRES represents GMO’s bet that reshoring and nearshoring—the movement of production capacity back onshore or to nearby allies—constitutes more than political theater or a temporary supply-chain correction. The fund targets sectors at the heart of this shift: Continue reading →
On September 24, 2025, MFS Investment Management launched the MFS Active Mid Cap ETF (MMID), bringing one of the firm’s most seasoned mid-cap strategies into the ETF wrapper. The fund represents a straightforward translation of MFS Mid Cap Value – a strategy portfolio manager Kevin Schmitz has managed since 2008 – into a more tax-efficient and accessible structure. What distinguishes MMID is not novelty but pedigree: a 17-year track record, a manager who joined MFS as an equity analyst in 2002 and has spent more than Continue reading →
I just finished reading Principles for Dealing with the Changing World Order – Why Nations Succeed and Fail by Ray Dalio. Mr. Dalio states:
“Dealing with the future is all about 1) perceiving and adapting to what is happening, even if it can’t be anticipated; 2) coming up with probabilities for what might happen; and 3) knowing enough about what might happen to protect oneself against the unacceptable, even if one can’t do that perfectly.”
I recently spent a weekend in the historic mining town Continue reading →
On November 10th, Tiffany Hsiao rejoined Matthews Asia after leaving the firm in August 2020 to join Artisan Partners to launch a China-focused private fund. Prior to her departure, Tiffany managed the firm’s China Small Companies, former Asia Small Companies (now Emerging Markets Small Companies), and Asia Innovators strategies.
The U.S. Securities and Exchange Commission cleared the way for Dimensional Fund Advisors to Continue reading →
Welcome, dear friends.
Welcome to autumn. The apples are in, the trees are changing, flurries threaten – four of my students have never seen snow except at the movies – and, at long last, summer’s wardrobe has been laid to its rest. The clocks “fell back” as I was writing this essay, offering me a bonus hour in my day. Hesitant, as ever, to be wasteful, I resolved to spend my gifted hour thinking Interesting Thoughts.
Warren Buffett has more Continue reading →
In the buttoned-down world of institutional asset management, T Rowe Price has long been the firm that makes boring look brilliant. While competitors chased hot trends and flashy returns, the Baltimore-based firm built its reputation as the quintessential “singles hitter,” compounding modest, steady gains into industry-leading long-term performance through disciplined, research-driven processes.
Which makes the 87-year-old firm’s October 2025 filing Continue reading →
In this topsy-turvy world, characterized by unprecedented tariffs, rapidly changing policies, spending cuts, geopolitical risk, high deficits, and elevated valuations, I tend to be more conservative. I have added toggles to my “Rate and Rank” spreadsheet, allowing me to evaluate funds through the lenses of “Risk Off” and “Yield” for a conservative, tax-advantaged account. Table #1 shows how I rank sector Lipper Categories from highest-ranked category to lowest, along with the highest-ranked five funds. Some sectors are in Continue reading →
Using historical data on funds to make assumptions about future performance involves correctly interpreting the trends. Over the past six years, the U.S. has experienced an extraordinarily unusual period:
