Category Archives: Funds

Funds in Registration

By David Snowball

Relatively few funds enter registration in November or December. Advisers really want to go live by December 30th, so that they will be able to show full-year results for 2018. As a result, lots of funds go into registration in October so that they can emerge from the SEC’s “quiet period” by the end of December. As a result, this month’s filings are limited to a handful of institutional funds that might offer retail shares, and a pack of high-visibility active ETFs from Vanguard. Continue reading →

Elevator Talk: Sean Stannard-Stockton, Ensemble Fund (ENSBX)

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 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.

The conventional wisdom is that passive investing, particularly Continue reading →

Fuller & Thaler Behavioral Small-Cap Equity (FTHNX)

By David Snowball

Objective and strategy

FTHNX pursues long-term capital appreciation. The managers invest in a diversified US small cap equity portfolio. The managers seek out stocks where other investors are likely to make behavioral mistakes. If they conclude that an investor mistake is likely and the company has solid fundamentals, the portfolio managers generally buy the stock. They sell when the misbehavior has run its course, which tends to lead to a high turnover portfolio. That said, they do not automatically buy or sell based on a single security’s characteristics; they impose a risk management overlay that helps control exposures to sectors, size, and other characteristics. The fund currently holds Continue reading →

Funds in Registration

By David Snowball

A great month, especially if you’re rich. AQR has two new bonds funds tagged for $1,000,000 and $5,000,000 minimums. DFA has registered to launch Emerging Markets Sustainability Core 1 Portfolio and Global Core Plus Fixed Income Portfolio, kept so far from the hoi polloi that they don’t even list investment minimums. Rather, we suppose, like the restaurants that don’t list prices on the menu. Likewise, the Martin Currie Emerging Markets SMA Shares Fund will only be available to Legg Mason’s SMA customers. Joel Greenblatt has filed his latest fund, Gotham 500 Plus Fund, with a quarter million dollar minimum. It’ll invest long in large caps and long/short in small- to mid-caps. 17 of his 19 other funds have peer-beating returns since inception. RMB International Small Cap Fund has a $100,000 minimum for now, though an Investor class might come along one day. The advisor has no other international funds; remember, these used to be the Burnham Funds. The RQSI GAA Systematic Global Macro Fund will set you back 2.48% and $5,000,000. Continue reading →

Funds in registration

By David Snowball

It’s been a quiet month in the land of new fund registrations. There are ten new (mostly) no-load retail funds in the pipeline, as well as a half dozen loaded funds (which I’m mostly ignoring) and a slew of ETFs. The most intriguing development is the question, who’s offering the most pointless ETF? Candidates are the ProShares Decline of Bricks and Mortar Retail ETF which will surely compete with the ProShares Long Clicks/Short Bricks Retail ETF while the USCF Contango-Killer Natural Gas Fund (No K-1) takes on Continue reading →

Centerstone Investors (CETAX/CENTX)

By David Snowball

Objective and strategy

Investors Fund seeks long-term growth by investing, primarily, in an all-cap global equity value portfolio though there’s no formal limit on its ability to hold fixed-income securities, including private placements. The manager’s value discipline leads him to higher-quality firms whose stocks are selling at a discount to his assessment of their intrinsic value. As the stresses on the firm rise, so does the size of the discount he demands. The goal is to also invest with a margin of safety, which might also lead the fund to hold substantial amounts of cash when attractive and attractively-priced opportunities are not available. As of June 30, 2017, cash and cash surrogates comprise 26% of the portfolio. The manager expects to keep at least Continue reading →

Funds in Registration

By David Snowball

Wow. Finally, a lot of intriguing new investment opportunities. David Sherman, whose RiverPark Short-Term High Yield (RPHYX) fund has both a one-star rating and the universe’s best Sharpe ratio (by a lot) over the past five years, is launching a CrossingBridge Low Duration. Polen Capital, which runs three splendid funds – large growth, global and international – is adding a small cap offering. Thrivent, which has very solid, low-profile funds, offers up a no-load, no-minimum international fund with 0.09% expenses. And Mark Wynegar, whose Tributary Small Company Fund (FOSCX) has a great record for low risk, low turnover, low drama performance, adds a small-to-midcap fund to his portfolio.

And, oh yeah, you can also track Continue reading →

Evermore Global Value (EVGBX/EVGIX), August 2017

By David Snowball

Objective and Strategy

Evermore Global Value Fund seeks capital appreciation by investing in a global portfolio of 30-40 securities. The Fund’s special situations strategy is to identify companies trading at substantial discounts to their estimates of intrinsic value, and where catalysts exist to close these gaps.  Although they are opportunistic investors and can buy securities of any market capitalization, their sweet spot has been in micro to mid-cap opportunities.  They also have the ability to invest beyond the equity market in “less liquid” investments, such as distressed debt, can hold short positions in merger/arbitrage situations or to hedge market risk, and are willing to hold a up to 15% in cash.

Adviser

Evermore Global Advisors, LLC. Evermore was founded Continue reading →

Moerus Worldwide Value (MOWNX / MOWIX)

By David Snowball

Objective and strategy

Moerus Worldwide Value pursues long term capital appreciation, primarily by investing in foreign and domestic common stocks that it believes are deeply undervalued. The portfolio is constructed from the bottom-up through fundamental analysis; which is to say the manager cares about finding 15-50 great stocks with no particular interest in paralleling some indexes sector, size or country weightings. As of May 31, 2017, the fund is invested in 37 stocks.

Adviser

Moerus Capital Management, LLC. Moerus is a Continue reading →

Funds in Registration

By David Snowball

It’s rare that I encounter the term “quantamental” twice in the same set of filings. Okay, it’s unheard of. I think they just made it up to irk me.

It’s also rare that Vanguard launches two new funds, much less the global version of two of their most legendary funds: Wellesley and Wellington. It’s hard to imagine why these won’t be $10 billion funds in, oh, about a year.

Calvert Ultra-Short Income NextShares

Calvert Ultra-Short Income NextShares will seek to maximize income, to the extent consistent with preservation of capital, through investment in short-term bonds and Continue reading →

Matthews Asia Credit Opportunities (MCRDX / MICPX)

By David Snowball

Objective and strategy

The managers seek total return over the long term. They invest in debt issued by Asian corporations, governments and supranatural institutions. The managers invest, primarily, in high-yield, dollar-denominated debt though they define that term broadly enough to incorporate both high-yield bonds and debt-related instruments such as convertible bonds, hybrids and derivatives with fixed income characteristics.  Around 20-25% of the portfolio has been in convertible bonds since inception, and that percentage is been pretty stable from year to year. 

Adviser

Matthews International Capital Management, LLC, the Investment Advisor to the Matthews Asia Funds, was founded 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. This month’s good news is that most of the mutual funds in registration are sensible strategies from respected shops: Artisan, AQR, Brown Advisory, T. Rowe Price and others. The other part of the news is that the ETF industry continues to crank out a freakish mishmash. That includes the Quincy Jones Streaming Music, Media & Entertainment ETF, the Republican Policies Fund (GOP), the Democratic Policies Fund (DEMS) and the European Union Breakup Fund (EUXT). 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 →

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 →

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 →

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 →

Litman Gregory Masters Alternative Strategies Fund (MASFX/MASNX), April 2017

By Charles Boccadoro

Objective and Strategy

The Litman Gregory Masters Alternative Strategies Fund seeks to provide attractive “all-weather” returns relative to conservative benchmarks, but with lower volatility than the stock market. It seeks this objective through a combination of skilled active managers, high conviction “best ideas,” hedge fund strategies, low beta, and low correlation to stock and bond market indices.

The fund’s risk-averse managers, asset allocations, and hedging strategies position it as an alternative to traditional 80/20% or 60/40% bond/stock portfolios for conservative or Continue reading →

Grandeur Peak Global Stalwarts/Grandeur Peak International Stalwarts (GGSYX/GISYX)

By Samuel Lee

Objective and strategy

Grandeur Peak calls fast-growing, high-quality stocks with market capitalizations above $1.5 billion “stalwarts”. They are too big for Grandeur Peak’s small- and micro-cap funds, but too good to let go, so Grandeur Peak rolled out two funds to hold them.

It is a little appreciated fact that most of the gains in the stock market are driven by a handful of runaway winners; most stocks earn sub-par returns. Grandeur Peak’s strategy is to try to find them when they’re small—the tinier, the better—and ride them up. Founder Robert T. Gardiner made an ungodly sum of money applying this strategy for the lucky shareholders of Wasatch Micro Cap (WMICX) from 1995 to 2006. 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 →

Homestead Growth (HNASX)

By David Snowball

Objective and strategy

The fund seeks long-term capital appreciation by investing, primarily, in domestic large cap growth stocks. The portfolio is diversified (typically 60-75 names) but not sprawling. Direct foreign investment is currently about 5.6%, which is modest but also above-average for its Morningstar peer group.

In general, the fund’s subadvisor T. Rowe Price targets:

  • companies with characteristics that support sustainable double-digit earnings growth and
  • high-quality earnings, strong free cash flow growth, shareholder-oriented management, and rational competitive environments

Their preference is for firms with a lucrative and defensible niche which allows them to Continue reading →