October 1, 2016

By David Snowball

Dear friends,

Welcome to autumn. It’s a season of such russet-gold glory that even Albert Camus (remember him from The Stranger and The Plague?) was forced to surrender: “Autumn is a second spring when every leaf is a flower.” It’s the time of apples and cinnamon, of drives through the Wisconsin countryside, and of gardens turning slowly to their rest.

Open the windows, unpack the flannel, raise high the cup of cider. Summon the children, light the bonfires, deploy the marshmallows! Continue reading →

Emerging markets deserve reconsideration: the case for lollipops

By David Snowball

“I’m not saying it’s lollipops and marshmallows in emerging markets but …”

Andrew Foster, 9/5/2016

Twelve months ago, the headlines were apocalyptic:

Investors pull $1 trillion from emerging markets in a year” (CNN, 8/24/2105)

Emerging Market rout gathers speed” (Which Investment Trust, 8/25/2015)

“Investors Race to Escape Risk in Once-Booming Emerging-Market Bonds” (New York Times , 8/22/2015)

“The Bubble of Emerging Markets Pops” (History News Network, 8/27/2015) Continue reading →

Morningstar’s ETF Conference – Chicago 2016

By Charles Boccadoro

The good folks at Morningstar hosted the seventh annual ETF conference in Chicago, its global headquarters, this past month. More than 650 total attendees, including more than 500 registered attendees (mostly advisors), more than 80 sponsor attendees, nearly 40 speakers, and more than 30 members of the press. An increase from last year.

moetf16_1 Continue reading →

Turning Over the Data

By Leigh Walzer

This month the index fund turned 40. Bloomberg wrote a story suggesting this remarkable bit of financial engineering has benefited investors by close to a trillion dollars. While we think there is an important role for active managers, we noted in this column last month that investors continue to overpay by at least $70 billion per year.

But we take exception to one facet of this otherwise excellent story. The author notes that Continue reading →

Fund Profile: City National Rochdale Emerging Markets Fund, (RIMIX, CNRYX)

By Dennis Baran

Objective and strategy

The fund seeks to provide long-term capital appreciation primarily by investing in locally listed large, medium, and small quality companies broadly accessible to U.S. investors within Asian Emerging Markets. The Adviser conducts on-the-ground research to provide direct insight into these companies using its domain expertise in the region, and while it may invest in companies from any emerging market country, it expects to focus its investments in Asia.

The fund is intended for long-term investors who have a time horizon of at least 5 years but preferably 7-10. It was first mentioned in the April 2015 edition of MFO as Continue reading →

Launch Alert 1: RiverNorth Marketplace Lending Corporation (RMPLX)

By David Snowball

RiverNorth Capital Management launched RiverNorth Marketplace Lending Corporation (RMPLX), a closed-end interval fund dedicated to marketplace lending (a/k/a “online lending”) asset class. They’re in pursuit of high current income.

“Marketplace lending” are all of those companies that allow small borrowers to get quick access to loans for unconventional (that is, non-bank) lenders. Lending Club would be a familiar example for most of us. The volume of lending has increased 700% in four years to about $17 billion a year. Continue reading →

Launch Alert 2: RiverPark Commercial Real Estate Fund (RCRIX)

By David Snowball

On Monday, October 3, RiverPark Funds launched RiverPark Commercial Real Estate Fund (RCRIX). Like several of RiverPark’s funds, RCRIX began life as a hedge fund. Unlike any of its predecessors, though, it is being structured as an interval fund.

What does that mean? Morty Schaja explains the investment case:

The Fund’s objective is to seek current income and capital appreciation consistent with the preservation of capital by investing predominantly in the approximately $600 billion commercial mortgage backed securities (“CMBS”) market that is secured by income-producing commercial real estate assets predominantly in the United States.

Continue reading →

Funds in Registration

By David Snowball

Ten new funds are in the queue, ready to launch somewhere between Thanksgiving and New Years. Several high-profile firms are launching new funds, including DoubleLine, Northern, Osterweis and TIAA-CREF. (We also snuck in a small handful of institutional launches from AMG and AQR.)

U.S. Quality ESG strikes me as particularly interesting. Northern Trust has made a major commitment to responsible investing.  This fund will be the latest in a series of launches by Northern Trust, which has offered a global ESG index fund, Global Sustainability Index Fund (NSRIX) and added FlexShares STOXX US ESG Impact Index Fund (ESG) and FlexShares STOXX Global ESG Impact Index Fund (ESGG) on July 14, 2016. Northern’s passive products are consistently Continue reading →

Manager Changes

By Chip

DoubleLine picks up the pieces after Bonnie Baha’s tragic death, Scott Satterwhite retires at Artisan, some turnover at Osterweis, Miller/Howard resigns for the Miller/Howard fund, Giralda steps away from the Giralda Fund and 60 other changes.

Because bond fund managers, traditionally, had made relatively modest impacts of their funds’ absolute returns, Manager Changes typically highlights changes in equity and hybrid funds. Continue reading →

Briefly Noted . . .

By David Snowball

Herewith are notes about the month’s announced changes in the fund industry: closings, openings, name changes, liquidations and more.

Thanks, as ever, to the anonymous and indefatigable Shadow for his yeoman’s work in keeping me, and the members of MFO’s discussion board, current on a swarm of comings and goings.

Effective mid-January, 2017, the AB Wealth Appreciation Strategy (AWAAX) and AB Balanced Wealth Strategy (ABWAX) will no longer invest in other AllianceBernstein funds. Instead, they’ll invest directly in equities. Color me “confused.” The funds currently seem to hold shares of just one AB fund (Multi-manager Alternative Strategies) along with a ton of individual equities. Continue reading →