January 2017 IssueLong scroll reading


By David Snowball

PIMCO pays up

PIMCO has agreed to write to $19.8 million check to resolve a long-running enforcement action initiated by the SEC. The short version: PIMCO launched PIMCO Total Return ETF (BOND), one of the earliest actively-managed ETFs, in 2012. Early performance was eye-opening, since the ETF outperformed PIMCO’s $175 billion flagship Total Return Fund (PTTRX). It turns out that the outperformance was achieved by mispricing 43 of the fund’s 156 holdings and was supported by “other, misleading reasons” offered for the fund’s success.  PIMCO’s description speaks of “43 smaller-sized positions of non-agency mortgage-backed securities using third-party vendor prices, as well as PIMCO’s policies and procedures related to these matters.”

Jaffe on the move

Chuck Jaffe has announced his imminent departure from MarketWatch. He wrote last week that “I will be leaving MarketWatch at some point in January, although I expect the site to continue originating my column for the foreseeable future. It’s all about the state of journalism and Dow Jones … but it is also a good time for me to consider my options. My radio show (MoneyLife with Chuck Jaffe) will continue.”

Chuck is assuredly the most widely-read mutual fund reporter left standing. His departure is part of the larger unwinding of professional journalism triggered by the moronic insistence that people should receive their news for free, as if serious reporting simply appeared, without cost or effort. In consequence, paid readership is down and advertising revenue is down, so news organizations go into a period of managed decline. MarketWatch had already laid off all of their other senior correspondents and the Wall Street Journal, the most prestigious Dow-Jones brand, “as part of the cost cutting, offered all of its news employees the option to take a buyout.”

Every journalist at the country’s premier financial publication was deemed expendable.

We’ll follow Chuck as best we can!

Morningstar on the move

For those who missed the announcement, the 2017 Morningstar Investment Conference has been forced to surrender its traditional June date. The conference remains at the vast McCormick Place but will now take place Wednesday, April 26 through Friday, April 28. The explanation from one of the folks at Morningstar was “we’re a big conference by mutual fund industry standards, but we’re simply not big enough to command premier dates and premium space at the McCormick Place.”

We’ll try to be there for you.

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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.