May 2017 IssueLong scroll 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 organize Highland Opportunistic Credit Fund (HNRAX) into NexPoint Opportunistic Credit Fund has been scrapped for opaque reasons.


B. Riley Diversified Equity Fund (BRDR/BRDZX) will no longer impose investment minimums and minimum subsequent investments for purchases of the fund.

Effective May 1, 2017, the Board of Trustees reduced the investment advisory fee payable by the Gotham Total Return Fund (GTRFX) to Gotham Asset Management from 2.00% to 1.00%. That’s modestly less-impressive than it seems since an existing agreement limited the fee to 0.0%. Gotham estimates that the fund costs 5.07% to run but charges only the 3.52% attributable to the funds it invests in or shorts.

Jackson Square All-Cap Growth Fund, Jackson Square Global Growth Fund, Jackson Square Large-Cap Growth Fund, Jackson Square Select 20 Growth Fund and Jackson Square SMID-Cap Growth Fund have reduced their minimum initial investment for Institutional Class shares to $100,000. Woo-hoo!

Pear Tree Polaris Foreign Value Small Cap (QUSOX) has lowered its e.r. by 13 bps. It’s now capped at 1.43%. The fund remains a top-tier performer over all trailing periods and now has about a half billion in assets.

RiverPark High Yield Short Term Fund (RPHYX/RPHYX) has reopened to new investors who are willing to invest directly through RiverPark. It’s an outstanding cash-management fund with the highest 5-year Sharpe ratio of any fund in existence. We’ve published an updated profile of the fund in this month’s issue.

All classes of the Touchstone Sands Capital Select Growth Fund (TSNAX) have re-opened to investments by new and existing investors. Assets are down by about 75% from its peak in 2013 when all share classes and its separate accounts were closed to all investors. The fund is very concentrated and very aggressive, which has been working poorly for the past three to five years. Morningstar continues to express their confidence in the managers and have assigned it a “Bronze” rating.

CLOSINGS (and related inconveniences)

AQR will soft close two more funds in June. The roster of their closed offerings will be: 

Closed Fund Closing Date
AQR Diversified Arbitrage Fund June 29, 2012
AQR Multi-Strategy Alternative Fund September 30, 2013
AQR Style Premia Alternative Fund March 31, 2016
AQR Style Premia Alternative LV Fund March 31, 2016
AQR Long-Short Equity Fund (QLENX) June 30, 2017
AQR Equity Market Neutral Fund (QMMNX) June 30, 2017

Both of the new closures are excellent funds with $1 million minimums.

Harding, Loevner Emerging Markets Portfolio (HLEMX) closed to new investors on April 10, 2017.

Motley fool has decided to eliminate the institutional share class of Motley Fool Emerging Markets Fund (TMFEX and, oddly, FOEIX). The fund is tiny and, to be kind, “not stellar.”


361 Global Counter-Trend Fund (AGFQX) has been rechristened as 361 Global Managed Futures Strategy Fund.

American Beacon ARK Disruptive Innovation Fund has changed to American Beacon ARK Transformational Innovation Fund.

Century Small Cap Select Fund (CSMVX), a two-star small cap growth fund with a 17-year record is being reorganized as Congress Small Cap Growth Fund. The fund gains a co-manager, Gregg O’Keefe.

Effective June 1, 2017, Fidelity Global Bond Fund (FGBFX) will be renamed Fidelity Global Credit Fund. It will also get some (much-needed) fresh blood on the management team.

Goldman Sachs Fixed Income Macro Strategies Fund (GMMAX) is being rechristened as Goldman Sachs Strategic Macro Fund with a really substantial reduction in the fund’s management fee from 1.50% to 0.95%. Over the past three years the fund has trailed its peers by over 300 bps, so reducing the management fee by 55 bps is at least a start.

Goldman Sachs Growth and Income Fund (GSGRX) becomes Goldman Sachs Equity Income Fund on or about June 20, 2017.

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.

Rainier International Discovery Fund (RISAX) is getting adopted by Manning & Napier sometime in the fall of 2017. I’m guessing that the name will change and hoping that the sales load will evaporate; it is, otherwise, an entirely solid small fund.


Absolute Credit Opportunities Fund (AOFOX) will liquidate on May 26, 2017.

Facing “limited prospects for meaningful growth,” ATAC Beta Rotation Fund (BROTX) will liquidate on May 26, 2017. It’s a large cap with $4 million in assets, 1700% turnover and a record of substantial underperformance, which might well contribute to the aforementioned prospects.

Because Cloud Capital Strategic All Cap Fund (CCILX) “is economically feasible to continue managing the Fund because of the Fund’s small size and the difficulty encountered in attracting and maintaining assets,” it will liquidate at the end of May, 2017.

CMG Global Macro Strategy Fund (PEGAX) will redeem all outstanding shares on May 26, 2017.

Crow Point Global Dividend Plus Fund liquidated on April 17, 2017 on rather short notice.

On April 11, 2017, the DFA Board announced that DFA International Value Portfolio IV would, “based upon information provided by Dimensional Fund Advisors,” be liquidated the next day. Unless the information provided involved an Ebola outbreak, the haste seems curious.

Shareholders will meet in September to consider (and approve) the merger of Federated Prudent DollarBear Fund (PSAFX, formerly the Federated Prudent Global Income Fund and still more formerly David Tice’s Prudent Global Income Fund) into Federated Global Total Return Bond Fund (FTIIX). The move makes relatively little sense beyond the fact that the funds share a management team; FTIIX is small and a serious underperformer with a mission pretty much unrelated to PSAFX’s.

Goldman Sachs Focused Growth Fund (GFGAX) will merge into the Goldman Sachs Concentrated Growth Fund (GCGAX) during July 2017.

The Board of Trustees of Northern Lights Fund Trust (the “Board”) has determined based on the recommendation of the Fund’s Adviser that with respect to the GMG Defensive Beta Fund (the “Fund”), a series of the Northern Lights Fund Trust, that it is in the best interests of the Fund and its shareholders that the Fund cease operations. The Board has determined to close the Fund and redeem all outstanding shares on May 26, 2017.

Green Square Equity Income Fund was liquidated on April 13, 2017.

HSBC Emerging Markets Local Debt Fund has merged with and into the HSBC Emerging Markets Debt Fund (HCGAX). 

Kalmar “Growth-with-Value” Small Cap Fund (KGSCX) will cease its business, liquidate its assets and distribute liquidation proceeds on or about June 23, 2017.

Lord Abbett Value Opportunities (LVOAX) will be liquidated and dissolved by June 30, 2017.

“The liquidation of Nuveen Gresham Long/Short Commodity Strategy Fund is complete,” just in case you wondered. I’m sure there’s a legal reason for the fund adviser to announce the post-mortem, but I’m not sure what it is.

In more-timely news, Nuveen Core Dividend Fund (NCDAX) will merge into Nuveen Large Cap Value Fund (NNGAX), but not until July.  At a yet-to-be-determined date, Nuveen Large Cap Growth Opportunities Fund (FRGWX) will merge into Nuveen Large Cap Growth Fund (NLAGX). In a unilateral move, Nuveen Symphony Dynamic Equity Fund will be liquidated on or near June 22, 2017.

Oak Ridge Global Equity Fund (ORGEX) was liquidated on April 28, 2017.

State Street/Ramius Managed Futures Strategy Fund (RTSRX/RTSIX) liquidated on   April 28, 2017. 

Tortoise North American Energy Independence Fund (TNPTX) will merge into the Tortoise Select Opportunity Fund (TOPTX) on or about June 19, 2017.

Victory NewBridge Global Equity Fund (VPEGX) will liquidate on June 16, 2017.

Virtus Strategic Income Fund (VASBX) will liquidate on May 10, 2017. It’s a perfectly respectable fund that’s been around just shy of three years but that hasn’t drawn enough assets to remain viable.

Westwood Global Dividend Fund (WWGDX) will cease operations and liquidate on or about May 19, 2017.

William Blair Mid Cap Value Fund (WMVNX) will liquidate on or about June 15, 2017. It’s another case where being “good enough” is simply not good enough anymore; it’s a $3 million fund with a perfectly middling record, which won’t be enough to make it a $4 million fund much less a sustainable one.

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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.