Monthly Archives: February 2017

February 1, 2017

By David Snowball

Dear friends,

I’m sorry we were late to the party, but glad that you’re here. We had a rough start to February. Our estimable technical director Chip had a bad fall at work which took her out for three days. Just as we were preparing for launch, our site was vandalized by what appears to be an Indonesian hacking collaborative. Then as we thought we’d undone the damage and settled back to work, they slipped in again. (To be clear: you’re safe. We collect neither personal nor tracking information. Any financial stuff goes through Amazon and PayPal, groups that can pay for security obsessiveness. Mostly they seemed interested in vandalism for the sake of “bragging rights.”)

And then, to top it off, Mr. Trump was president. Yikes.

Investing in the time of Trump

“If they had learned anything together, it was that wisdom comes to us when it can no longer do any good” (I. 26). Gabriel García Márquez, Love in the Time of Cholera

If you think it’s time to be bold, you presumably know something that the rest of us don’t. If you are indeed part of “the smart money crowd,” congratulations and thanks for stopping by! Also, you can go now.

The Dow Jones Industrials average famously breached 20,000 on January 25, rising 1,800 points since the election.  Vanguard Total Stock Market Index (VTSMX) is up 16% in 10 weeks. That advance is without basis in reality; that is, economic conditions are not 16% better than 10 weeks ago nor are the prospects ahead.

So why the rally? Mostly, I suspect, because people have become unhinged by the circus in D.C.  Peggy Noonan, Reagan’s best speech-writer and doyen of the country-club Republicans, frets “we are living through big history and no one here knows where it’s going or how this period ends… Mr. Trump has overloaded all circuits. Everything is too charged, nothing feels stable. ‘Nothing is stable,’ [a prominent friend] replied” (“In Trump’s Washington, Nothing Feels Stable,” WSJ, 2/4-5/17).  In such moments of great uncertainty, crowds surge. (I think about the news reports of people crushed to death against the doors of a burning theater as the crowd behind them rushes without thought or perception.)

In reality, nothing good has happened.  The estimable Dan Wiener, he of the Independent Adviser for Vanguard Investors, writes:

You’ve heard me say it before and I’ll say it again: This has been a “Rumor Rally” not a “Trump Rally.” Investors have been buying on the rumor and, as of yet, we don’t really know what the news is. But a sell-off is in the cards just about any time, ratcheted higher by the rising levels of uncertainty now facing the country. “The Rumor Rally” (2/1/17)

People are buying because people are buying.  Last summer’s “pessimism has been replaced by optimism,” a change that John Rekenthaler describes as “stark” (“Is the Contrarian Bell Clanging for Stocks?”1/27/17). That’s not generally a reason for you to buy. “[T]he confidence of professional and individuals investors,” Jason Zweig writes, “has a perverse quality … most of the time what the market does next has nothing to do with how optimistic investors are about it; the results are disconcertingly random. So you could visualize the stock market as a poltergeist or hobgoblin who takes a twisted delight in playing pranks on the expectations of the investing public” (“Don’t Let Other Investors Make Up your Mind,” 1/20/17).

Will investors continue finding reasons to bid stocks unrelentingly higher? How great is the supply of “greater fools”? Ummm … “maybe” and “substantial.”  Cullen Roche of Pragmatic Capitalist asks the right questions:

And here’s the interesting part about Trump’s Presidency – how much room is left in this balloon?  … how much higher can consumer confidence go? … how much more employment can you pull out of an economy plumbing very low levels of unemployment? This looks like a balloon that is much closer to its max capacity than vice versa. “Are Expectations Too High For Trump?” (1/23/17)

Mr. Rekenthaler echoes those questions:

Last year carried the danger that recession would occur … [but] the bad news did not come true, stocks [rallied] on relief. What relief will come now? The market has already celebrated twice … Something unexpected will be required for a third celebration. Unexpected positives do happen–but that’s not generally the way to bet. All this comes as rumination, not advice … [I have] a sense of foreboding … it is a bit worrisome. I feel as if I have been here before.

Mr. Zweig agrees:

This bull market for stocks is 94 months old, making it the second-longest in modern history … Now more than ever, you should take extra risk only because your own rigorous analysis leads you to conclude that it’s a good idea, not because other folks think it is.

Panicked crowds turn quickly, driven by their most panicked members and don’t much notice who is crushed underfoot. On whole we’d prefer that you neither join them nor getting trampled by them.

So what am I doing with my portfolio? Same as always: nothing. Mr. Rekenthaler  likewise. That reflects the fact that my portfolio allocation is aligned with my goals and my need to enjoy the day and sleep through the night.

What might you do? Step one is to figure out if you even have a plan. For many of us, our investments are like barnacles on a ship’s hull, accumulating bit by bit without plan or a sense of how they affect our overall well-being. If you don’t have a plan, I’d make one that answered two questions: how would I handle a short-term financial crisis? And then, what pattern of investment allows me to balance my longer-term goals with my desire to have a fulfilling life, now and then? If you do have a plan, double-check your comfort with the following prospect: you might lose 30% this year and not see that money again until well into the 2020s. That’s the reality of a stock heavy portfolio riding a very old bull market.

My preference runs toward experienced, risk-conscious managers who have both the mandate and the flexibility to save you from yourself and from the market. For me, that translates to funds willing to hold cash when the market is giddy and to aggressively invest cash when the market feels suicidal, to managers who are able to move between asset classes but who typically don’t, and those who I trust endure “the slings and arrows of outrageous fortune” with calm determination.

Except in a very long-term retirement fund that I look at only once every year, it doesn’t mean hitching my fortunes to funds (active or passive) that blindly follow the crowd.

I would normally review my own portfolio choices in our February issue, but given the extraordinary challenges of getting this month’s issue to you, I’ll save that treat for March.

Citizenship in the time of Trump

After its nearly century and a half run, Ringling Bros. and Barnum & Bailey Circus plans to shut down “The Greatest Show On Earth.” (

Three quick thoughts. (1) Donald Trump is our president, for the next four years he qualifies as “a fact on the ground.” (2) Mr. Trump is a “a prancing, prattling mountebank” (my phrase from last November) and he’s not going to change. (3) You can’t afford to be.

Our message isn’t going to change: you need to skip the circus and focus on the policies. That means Get Off Facebook, except for cat videos and gloating about your kids’ or grandkids’ excellence. 60% of Americans get some or much of their news, especially political news and especially but not exclusively folks under 50, from social media. There are three problems with that strategy:

  • Facebook is not designed to provide reliable intelligence.
  • Facebook is designed to tell you what you want to hear; Facebook simply gives you more and more of whatever it is you and your friends like. That might be the National Knitting Night results or updates on the Steelers prospects for 2017. When you rely on it for political news, it’s toxic since conservatives hear the liberals love Satan and hate America while liberals hear that conservatives are Satan and hate everyone. Neither is true but both are seductive. It’s called “the echo chamber effect” and it leads conservatives to rage and liberals to weep. As Ms. Noonan reports, “at parties, dinners and gatherings the decibel level hits the ceiling right away and stays there. No one can hear anything.”
  • The delusion that reliable journalism is free is starving reliable journalism. At base, you refuse to pay for a newspaper subscription or NPR membership because you don’t think you need to; just look on the web and it’s all there, free!

Get Off Facebook then choose whatever social media outlet you most love and get off it, too. The ones we love are the ones that tell us it’s all so simple and we’re all so right. Geoffrey Fowler of The Wall Street Journal wrote two well-done pieces which might help you: “Take your brain back from social media” and “Am I really addicted to Facebook?” (You can and you are, by the way.) If you don’t subscribe to the Journal, try Googling the titles. The New York Times has run comparable articles, which would help you understand the challenge.

Having done so, steel yourself to act like a grown-up. It’s hard, but we need to rise to the challenge.

  • Support policies that are good for us; oppose policies that are bad for us. In my case, that translates to setting up a monthly contribution to the ACLU and hopes that they might help slow the mad rush. I’ve managed to avoid them for 60 years but now even the anguished conservative inside me recognizes that its time. In your case, it might as easily be supporting the American Conservative Union or the Environmental Defense Fund. Regardless, focus on policy.
  • Pay for real journalism. We need people who are professionally obliged to start with facts rather than those who start with conclusions. Both sorts of articles appear to offer facts; the difference is that the latter filter for “convenient facts” and “alt-facts” to prove what they knew all along. In my case, that translates to adding a subscription to the New York Times (.com!) as a way of helping to pay for the essential work of reporting reality rather than preference.

    That complements my paper subscriptions to The Wall Street Journal, The Economist and the Quad City Times.

    Patent attorney Vanessa Otero created a widely-discussed infographic that attempts to answer the question, “who should you turn to?”

    While I’m much more skeptical of The Washington Post than she is (their daily news summary is a pained and painful liberal howl), I think she’s more right than wrong.

  • Have dinner with someone you disagree with. At a table. With food you enjoy and a drink you savor. Without anything electronic. Give thanks for food and good health, for family and friends and for the wit to appreciate them. And if you must talk about the wider world, begin your conversation with these words: “Help me understand.”
  • Remind your representatives that you did not hire them to join a mob, either pro- or anti -. In my case, that meant writing to senators Ernst and Grassley with a reminder that the sobriquet “the greatest deliberative body on earth” was not lightly bestowed and that it must be earned, and earned again, by acting as the grown-ups at the picnic. I included a reminder of the words of senate Margaret Chase Smith, whose 1950 “Declaration of Conscience” wasn’t the country’s bravest statement against its worst elected official:

I would like to speak briefly and simply about a serious national condition.  It is a national feeling of fear and frustration that could result in national suicide and the end of everything that we Americans hold dear.  It is a condition that comes from the lack of effective leadership in either the Legislative Branch or the Executive Branch of our Government.

I speak as briefly as possible because too much harm has already been done with irresponsible words of bitterness and selfish political opportunism.  I speak as briefly as possible because the issue is too great to be obscured by eloquence.  I speak simply and briefly in the hope that my words will be taken to heart.

I speak as a Republican.  I speak as a woman.  I speak as a United States Senator.  I speak as an American.

Her statement concludes with the formal declaration of conscience:

It is with these thoughts that I have drafted what I call a “Declaration of Conscience.”  I am gratified that [other senators] have concurred in that declaration and have authorized me to announce their concurrence.

The declaration reads as follows:

1. We are Republicans. But we are Americans first. It is as Americans that we express our concern with the growing confusion that threatens the security and stability of our country. Democrats and Republicans alike have contributed to that confusion.

2. The Democratic administration has initially created the confusion by its lack of effective leadership, by its contradictory grave warnings and optimistic assurances, by its complacency to the threat of communism here at home, by its oversensitiveness to rightful criticism, by its petty bitterness against its critics.

3. Certain elements of the Republican Party have materially added to this confusion in the hopes of riding the Republican party to victory through the selfish political exploitation of fear, bigotry, ignorance, and intolerance. There are enough mistakes of the Democrats for Republicans to criticize constructively without resorting to political smears.

4. To this extent, Democrats and Republicans alike have unwittingly, but undeniably, played directly into [our enemy’s] design of “confuse, divide and conquer.”

5. It is high time that we stopped thinking politically as Republicans and Democrats about elections and started thinking patriotically as Americans about national security based on individual freedom. It is high time that we all stopped being tools and victims of totalitarian techniques — techniques that, if continued here unchecked, will surely end what we have come to cherish as the American way of life.

If you think that your vision is clearer than senator Smith’s, please do share it. If you hear your conscience in her voice, perhaps it’s time to share that fact, too.


To the good folks at Gardey Financial, for their years of support. We’re grateful, too, to those that have renewed or initiated a subscription to MFO Premium. And, we can’t forget to thank our stalwart supporters who’ve chosen to set up monthly PayPal contributions: Deb, Greg, Jonathan and Brian. Thanks so much!

Apologies especially to Leah W and mhkappgoda; we tried to extend thanks to you both but somehow ended up with incorrect surface and email addresses that led to a returned letter and rejected email messages. Neither of which diminishes the following: Thanks!

A different sort of thanks!

In our January issue, we asked if you might take a moment to help a child. A Florida reader’s autistic child was heartbroken that his Munder Funds LED wand had died after years of use and our reader, Doug, was looking for help in finding one. We asked if you would help, and you did.

Of course you did. You’re good!

Four readers (Charles, Jason, Leah, and Toby) tracked down very similar wands that are still on the market. Two (Mark and Marvin) offered suggestions for how to get the wand working or for other toys that might make a difference. And one (Graham!) actually tracked down the former Munder marketing executive for us.

Thanks to you all. You really do make a difference.

In closing …

The members of Albuquerque’s chapter of the AAII have been kind enough to invite me to drop by on March 15th. I propose to talk about how to survive despite bad journalism and bad impulses, though I seem forever to be wandering just a bit off-topic. If you happen to be around the city that day, I’m sure you’d be welcome.

We’ll be back on-schedule and in full voice just three short weeks from now with our March 1st issue. We hope to see you there!

As ever,

Survival of the Flushest?

By Edward A. Studzinski

“Cynic, n. A blackguard whose faulty vision sees things as they are, not as they ought to be.”

Ambrose Bierce

A question I have been pondering with increasing frequency is, of the mutual funds around today, how many of them will still be around in ten years? This grew out of a year-end luncheon with a friend of mine who heads up the strategic planning effort for a large financial services firm out of Chicago that has gone global and now has its fingers in many pies. Our discussion started around the problem with the mutual fund model – an investment vehicle of infinite duration that must provide daily liquidity. Add to that the fact that the definition of long-term investor has now morphed into about three months, if you are lucky, as a portfolio manager. Then, if you are part of one of the large for-profit fund complexes, there is the fact that the parent is allocating capital and skimming forty to fifty basis points off the top. So the senior managers at the subsidiary of the parent (the individual fund companies) start under-investing in the business in terms of hiring and retention compensation so that they can pad their own paychecks (another Maserati bonus). The end result was a convincing argument that many well-known firms in Chicago will probably not survive the next ten years.

All things being equal (which they usually are not), it might have been easy to find flaws in the thesis. But based on many conversations with individuals running very scared in this world, it seems to me that it will have legs. And, as we have commented in this publication over the last few years, we are not living in a static world. Fund flows out of high-priced actively managed funds to passive index funds or alternatively, exchange traded funds, have stood the mutual fund investment management business on its head. Funds that have started in the last five years and made their way through the $60M break-even level in terms of assets under management (at least with a 1% fee), now find themselves hovering on the brink of financial extinction, especially if their performance relative to the indices or germane benchmarks has been middling to poor. And we see the pressures mounting on other firms which had been successful. With recent performance issues, GMO in Boston laid off staff in 2016 (and allegedly has been trying to sell itself for some time now, with no takers). We also have the example of the Harvard Investment Management Company, which is charged with running the Harvard University Endowment. Last week, it was announced that 50% of the staff will be let go. With the exception of the certain specialty areas, such as real estate, many of the functions will be outsourced. We have Pioneer in Boston being sold from an Italian financial services firm to a French one, much to the surprise of many. These examples are but a few indications of the sea change occurring as the perfect storm of fee pressures, poor relative performance, and the approaching implementation of the new Department of Labor fiduciary standards as they apply to ERISA accounts come clashing together.

Now I recognize the black humor in the fact that I and my strategic planning friend, having both done well from our time in the mutual fund business are skeptics of its longevity. And I also recognize that David and Charles both are still committed to finding a pony somewhere in the room full of manure. But, much of investment management these days is a commodity business. This is especially true in the area of large capitalization active managers. And while you may think you are getting two heads looking at a portfolio rather one, or two for the price of one, in reality you are getting two for the price of two. Except one co-manager is usually playing the role of Leporello to the lead co-manager’s Don Giovanni.

Which brings me to the question of what is the actionable advice here? First, determine what your time horizon and investment goals are, and then set your asset allocation in such a fashion as to give you a comfortable shot at meeting those goals. The long-term Ibbotson return numbers for various asset classes should be your reference in making those allocation decisions. Then, for large cap and mid cap stocks, find the lowest cost passive funds that you are comfortable with, and determine what amount of assets you want to allocate to them. Focus on firms that have the financial wherewithal to survive, such as Vanguard, T. Rowe Price, and Fidelity. For small cap and microcap securities, look for active managers with at least five year track records, and again allocate assets to them in terms of your overall asset allocation model. Here, a somewhat counter-intuitive approach is appropriate, as you don’t want managers who have too much in the way of assets that they end up style-drifting out of the category. Follow the same advice for large cap and mid cap international securities. For small cap international securities and emerging markets, look for active managers who are not engaged in asset gathering for large firms and have long-term track records

Alternatively, what my friend is doing rather than investing in mutual funds, is to put together a concentrated portfolio (twelve to fifteen) of equities that are long-term compounders of wealth and where you get some degree of investment exposure through their internal portfolios (both Berkshire Hathaway and Markel Corporation would be examples of same). But, and this is crucial, decide upon an approach, implement it, and then leave it alone. An annual review should suffice (not necessarily tied to year-end, so as to avoid the artificiality that often creeps into calendar year-end market valuations).


Planning a Rewarding Retirement

By Robert Cochran

This is the first in a series of articles on preparing for retirement. The next few will deal with what retirement looks like – what I will do as I enter another stage of my life, Social Security planning, cash flow expectations, investments, planning for health care, eventual downsizing and/or re-locating, and other topics I am finding important.

In my 36 years of helping clients plan for their retirements, there have been a number of things I now refer to as truisms that ring consistently for most of those clients. These are not retirement planning items, but they will smooth the path toward retirement. Readers of my commentary know most of them by heart, but I am personally more aware of them as I prepare for my own retirement later this year. Here they are in no particular order.

  1. Pay yourself first. Put money aside from every paycheck into some kind of retirement or savings plan. First establish an emergency fund that will cover 3-6 months of cash flow needs. Then, if you have a company 401k plan with an employer matching feature, strive to at least put enough of your own dollars in the plan every year to take advantage of the match. Otherwise you are leaving money on the table, and that is a mistake.
  2. Live within your means. This can be difficult, given our society’s penchant for having the fastest, newest, most beautiful (and often expensive) possessions now. The concept of starter home has unfortunately been cast aside, as young people living in nice apartments want those same upscale amenities in the homes they buy. Our first home, bought the winter after we were married in 1979, cost $40,000, equivalent to $132,000 in 2016 factoring inflation, and it was about the same monthly payment as our rent had been. We were thrilled to lock in a 30-year rate of 10.25%. Yes, we refinanced several times as rates dropped. It is easy to see why fewer millennials are buying. Those who do are often mortgage poor in their search for their “dream home”. The same goes for cars and other big-ticket items, where immediate prestige is short-lived.
  3. Pay off credit cards each month. This is another one that may be hard for young families, people struggling with employment problems, and those with medical issues. I can tell you that very few people start a successful retirement laden with credit card debt. From a financial planning perspective, there is only one solution to consumer debt: quit spending. Do you really need a 24th pair of shoes, new furniture, a birthday cruise, or any of those things you are unable to pay off at the end of the month? Lean to say no.
  4. Complete the basic estate planning documents you need. For everyone, this includes the following:
    • Durable Power of Attorney should you be unable to handle financial decisions and pay bills.
    • Health Care Power of Attorney (some states call this a Health Care Surrogate) to make decisions should you become incapacitated and unable to make the decisions yourself. Only trusted relatives or friends should be named for these two POA documents, and preferably they should reside in the same area of the state as you.
    • Advance Care Directive or Living Will is optional. It is a written statement of the kind of medical care you wish to receive should you be in a terminal condition, an end-stage condition, or in a persistent vegetative state.
    • Last Will and Testament that designates how you want your personal property divided at your death, who will act as the executor, who will act as a guardian for your minor child, who will have control of your digital property, among many items.
  5. Purchase life insurance to replace income needed in the event of your death. If you are single, you probably do not need life insurance. If you are married, consider what your death would mean to your spouse financially. If you have children, think about what will be needed to handle all the expenses, including day care and education for the long term. Buy the amount of insurance you need, and purchase an inexpensive, 15 or 20-year level-term policy. Keep the insurance only as long as it is needed.
  6. Strive to have your mortgage paid before you retire.
  7. Understand the importance of your credit score, and monitor it at least once a year.

I wish I had followed all of these truisms when I was young, but alas I did not. The sooner folks take them to heart, the quicker their financial success can happen. I readily admit that not everyone can accomplish all seven of them quickly. Some may take a long time, but they should be goals. Numbers 1 and 4 are absolutely crucial and are both easily accomplished. If you are just getting started on your own, are newly married, or changing relationships, understand how vital it is that you have current wills and POAs. And remember to change the beneficiaries of your financial accounts, unless you want your ex, and not your current spouse or partner, to get your 401k when you die.

There may be other things that individuals believe are vital to a successful financial life and retirement. This list, and future comments, are not meant to be exclusive.

AMG GW&K Global Allocation Fund (formerly AMG Chicago Equity Partners Balanced), (MBEAX), February 2017

By David Snowball

At the time of publication, this fund was named AMG Chicago Equity Partners Balanced.

Objective and strategy

The managers aim to provide “high total investment return, consistent with the preservation of capital and prudent economic risk.” The fund normally holds 50-75% in equities with the remainder in bonds and cash. The equity sleeve is mostly mid- to large-cap US stocks; direct foreign investment is minimal. The income sleeve is mostly high quality, intermediate-term bonds. The managers have the freedom to invest up to 25% in high-yield securities or in longer maturity bonds but, mostly, don’t.


AMG (Affiliated Managers Group) advises the fund. AMG partners with forty small, distinctive investment management firms which then offer funds or separately managed accounts through the AMG umbrella. Its partner firms include River Road, Yacktman and SouthernSun. AMG has about $730 billion in assets under management.

Chicago Equity Partners manages the fund. CEP is a Chicago-based (duh) firm founded in 1989 to provide “bespoke equity offerings” to institutional clients. They have more than 100 institutional clients and about $10 billion in assets under management. AMG holds a 60% stake in CEP.


A team composed of Daniel Miller, William Sterling, Aaron Clark, Thomas A. Masi, and Mary Kane. Messrs Miller and Sterling are responsible for the portfolio’s asset allocation. Messrs. Clark and Masi are responsible for equity investments and Ms. Kane is responsible for fixed income. All are members of GW&K’s investment committee and all joined the fund in April 2020. With the exception of Masi and Clark, they are also responsible for co-managing other GW&K funds.

Strategy capacity and closure

The managers anticipate no meaningful constraints in the foreseeable future since they have a small fund trading in with highly-liquid asset classes.

Management’s stake in the fund

None of the managers has chosen to invest any of their money in the fund (as of June 2023). 

Opening date

January 2, 1997.

Minimum investment

$2,000 on the “N” (formerly “Investor”) shares, reduced to $1,000 for IRAs. The lower-cost “I” and “Z” share classes have minimums of $100,000 and $5,000,000, respectively.

Expense ratio

1.06%, after waivers, on assets of $23 million as of June 2023. 


The evidence is indisputable: we’re cowards. All investors talk about “investing for the long term” and “short-term volatility is just noise, just a part of the game,” which are nice sentiments. Unfortunately, they’re not descriptions of investor behavior: investors undercut their gains by trading too much, buying too late and selling too early. That’s particularly pronounced with ETFs, which are destructively easy to trade, and high-volatility strategies, which are terrifying to hold.

That often means that funds which balance equities, bonds and cash in their portfolios are an investor’s least exciting and most profitable choice. The best might offer 80% of the stock market’s gains with just 60% of its risks. That’s called an “asymmetrical risk-reward profile.”

The Observer recognizes that fact and our fund screener is calibrated to be much more risk-aware than most. Each month we screen decades’ worth of data to answer the question, which managers are earning their keep? That is, which managers consistently offer positive absolute return with the least risk? In assessing balanced funds, we don’t just compare those funds against an anonymous peer group, but also against two excellent, low-cost alternatives from Vanguard: the utterly passive Balanced Index (VBINX) which is always and only 60% CRSP U.S. Total Stock Market Index and 40% Bloomberg Barclays U.S. Aggregate Float Adjusted Bond Index and Vanguard STAR (VGSTX), a fund of actively-managed Vanguard funds.

If you don’t glance at a Martin Ratio of 0.82 and think “cool! Excellent score on the most risk-sensitive measure, I’m feeling good,” we’ve prepared a simple translation for you in the table below. We tell you what each metric, above, actually measures and then how MBEAX’s performance over this particular 10-year-period compares to the others.

A quick example: APR %/yr translates to “annual percentage return, for the period measured, expressed in percents.” In the table below we describe those as the raw (i.e., not risk-adjusted) returns and let you know that MBEAX had higher raw returns than its peers or STAR.

How do you measure success?

CEP Balanced vs its peer group vs Balanced Index vs STAR
Raw returns APR CEP wins Tie! CEP wins
Worst-case loss MaxDD CEP wins CEP wins CEP wins
Time it takes to recover from the worst case Recvry CEP wins CEP wins CEP wins
Normal volatility Std Dev CEP wins CEP wins CEP wins
Bad volatility DS Dev CEP wins CEP wins CEP wins
Combined effect of big losses and small recovery Ulcer CEP wins CEP wins CEP wins
Losses during months when the market is falling a lot Bear market dev CEP wins CEP wins CEP wins
Standard balance of risk and return Sharpe CEP wins CEP wins CEP wins
A more risk-sensitive balance of risk and return Sortino CEP wins CEP wins CEP wins
A very risk-sensitive balance of risk and return Martin CEP wins CEP wins CEP wins

That comparison measures a meaningful period, we think: the span of time since the current management team fully settled in-place until now. If you do the same calculations for two other meaningful periods – the full market cycle that includes the 2007-09 crash and the current bull market plus the down market cycle that covers the 2007-09 crash – you see the exact same pattern. By every measure of reward, risk and risk-reward balance that we employed, CEP outperformed its peers (by a lot) and two entirely-excellent competitors.

Readers with MFO Premium access are able to look at the data for themselves by entering “MBEAX” into the multi-screener. We default to including the comparisons above. For those just interested in the data on the full- and down-market cycles I just mentioned, there’s a “Commentary” post with the tables for you at MFO Premium. Here is link to full Risk Profile.

The picture changes over shorter time periods, and that’s important to you.

The fund’s 1-, 3- and 5-year data show some wins and some losses, particularly against a purely-passive competitor. That makes perfect sense: a steadily rising, some say irrationally rising, market always punishes risk-conscious strategies and rewards maximum exposure to risk assets. Our ten-year and full-cycle comparisons take into account the reality of markets that rise and fall; shorter, arbitrary periods reflect just the upside performance.

And MBEAX is risk conscious. Manager Patricia Halper notes that “we ‘re very focused on risk control, which is reflected in the fact that our downside capture ratios are consistently in the top decile.” She describes the fund as “a pretty straightforward balanced fund, the sort of fund an investor would use as a core holding.” As we’ve researched the fund, we’ve come to agree that its strength is in a risk-conscious discipline and consistently strong execution of the strategy. There are no bells or whistles. The equity sleeve offers broadly diversified exposure to the domestic market, which noticeably more mid- and small-cap exposure but noticeably less direct international exposure than its peers. The fixed income sleeve targets mostly intermediate-term, high quality bonds. The asset allocation overlay allows for substantial changes in equity exposure, but significant tilts are infrequent. “We’re pretty slow moving on that,” Ms. Halper allows. “We’ve had 12 shifts since 2006, but exposure typically stays around 60-65%.”

That’s reflected in the fund’s high correlation to a 60/40 index; over the full market cycle, the correlation is .99.

Are there reasons for caution? Two occur to us.

First, long-term lead equity manager David C. Coughenour, a founding partner of CEP, resigned in January 2017. The equity team is now led by Robert Kramer, who has also managed the fund since 2000 and is also a founding partner at CEP. Given the fund’s reliance on quantitative screens and the team’s tenure, that risk seems manageable.

Second, the retail shares call an above-average expense ratio (1.09%) and expenses, as CEP itself notes in a white paper, matter. Expenses are, in part, a function of asset base: larger funds enjoy economies of scale which the best of them actively pass along to their investors. The picture is better when we compare MBEAX to other flexible funds with under a billion in assets; against that group, MBEAX is in the lowest-cost third. And, they might reasonably argue, “we’ve been earning our keep for a long time now.”

We agree.

Bottom Line

If you are willing to wager your financial security on the bet that the long bull markets in stocks and bonds, abetted by sensible and far-sighted actions being pushed by the president, will continue into the foreseeable future, you’re best served by a passive product that gives you naked exposure to those conditions. If you are increasingly dubious about how markets and economies will react to those same forces, you need to strongly consider entrusting a larger share of your assets to experienced, risk-conscious managers who’ve gotten it right in the past. The Chicago Equity Partners are one such set of managers.

Fund website

AMG Chicago Equity Partners Balanced

T. Rowe Price Global Multi-Sector Bond (PRSNX), February 2017

By David Snowball

Objective and strategy

The fund seeks “high income with the potential for some capital appreciation.” Their target is to maximize total return on a risk adjusted basis through a blend of high yield and global fixed income securities. They hope to achieve that end by investing primarily in income-producing instruments including:

  • US, international and emerging country sovereign debt
  • US, international and emerging market corporate debt
  • Mortgage- and asset-backed securities
  • Bank loans
  • Convertible securities and preferred stocks.

The fund may invest entirely in dollar-denominated foreign securities; other than that, the restrictions in the prospectus come down to “we may invest in risky parts of the bond market but we’re not going to go crazy.” The manager will actively allocate the portfolio based on market conditions.


T. Rowe Price. Price was founded in 1937 by Thomas Rowe Price, widely acknowledged as “the father of growth investing.” The firm now serves 11 million retail and institutional clients through more than 450 separate and commingled institutional accounts and more than 150 stock, bond, and money market funds. Price had $810 billion under management at mid-year. It’s generally regarded as one of the industry’s best firms for its combination of a healthy corporate culture, risk sensitivity, thoughtful design and strong performance.


The lead manager, Steven Huber, is responsible for the fund’s critical asset allocation decisions. Before joining Price in 2006, he managed the State of Maryland’s $34 billion retirement fund for three years. From 1987 – 2003, he was the director of asset allocation and quantitative strategies for Aeltus Investment Management. Aeltus is an institutional money manager, once part of Aetna (hence the funky spelling) and now part of ING. He has managed this fund since inception.

Strategy capacity and closure

Huge: Price has substantial analytic resources and the manager has considerable freedom to move around inside the $100 trillion global bond market.

Management’s stake in the fund

Mr. Huber has between $500,000 – 1,000,000 invested in the strategy, a portion of which is invested in the retail fund.

Opening date

The fund launched December 15, 2008 under the name T. Rowe Price Strategic Income, which changed in July 2015.

Minimum investment

$2,500 for regular accounts, $1000 for IRAs.

Expense ratio

0.65% on assets of $1.3 Billion, as of July 2023.


T. Rowe Price Global Multi-Sector Bond has been left behind by Morningstar. That’s a common fate, even for outstanding funds, as Morningstar commits itself to “covering those investments that are most relevant to investors and that hold a significant portion of industry assets.” That makes perfect sense given their business model. Our “left behind” series looks at outstanding funds which Morningstar once covered but has now ignored for five or more years.

We’re following-up on Morningstar’s last analyst review, from December 2011, which made two points: really promising fund but we’ll need to see a longer record before we get excited.

Kathryn Young who until lately was an analyst for Morningstar – Australia, wrote on December 11, 2011:

Though promising, T. Rowe Price Strategic Income still needs to make its case.

This multisector-bond fund starts out on the right foot. It’s got a sensible, if standard, strategy and the tools to execute it successfully…

The problem is that Huber’s public track record is much shorter than those of the managers backing him up. He has plenty of experience–having spent nearly 20 years managing institutional assets before joining T. Rowe Price in 2006–but this fund is just three years old, and its record thus far is uninspiring.

The quality of resources backing Huber here and his tendency to keep a close eye on risk make the fund worth monitoring, but it’s difficult to have greater conviction in it until Huber’s proved he can be right more often than not.

Two quick notes. First, uhhh … it’s been five years since you wrote that, guys. Second, the record is clear: Mr. Huber has been right far more often than not.

What does the fund do?

The fund invests broadly and globally, tapping into a variety of income-producing assets. About 40% of its portfolio is invested in the US, with Brazil, Serbia, Mexico and Malaysia rounding out the top five. Sovereign bonds make up 40% of the portfolio, which is their largest slice but which is also a lot lower than the average global bond fund. They offer substantially more exposure to corporate and asset-backed securities than their peers. They offer more exposure to high-yield bonds than do their peers, but we’re hesitant to cite percentages because global ratings are often hard to compare. The upper limit is 65% high yield and 50% non-dollar-denominated. The manager tries to add value by altering sector allocation, credit selection, interest rate management, and currency exposures in response to evolving market environments.

How well does it do it?

By any measure, quite well.

The fund has whomped its Lipper global income group. From inception through 12/31/2016, the fund returned 6.6% annually while its peers made 4.4% – a difference of 200 bps. And it’s whomped its Morningstar world bond peer group. From inception through the end of 2016, a $10,000 initial investment here would have grown to $17, 264 versus $13,841 for its Morningstar peers. And it’s whomped its benchmark Bloomberg Barclays Global Aggregate ex Treasury Bond USD Hedged Index by more than 200 bps/year (704 to 494), which would have translated to a $17,264 to $14,735 margin to victory.

Are you detecting a pattern yet?

Over the same period, it also outperformed Morningstar’s only Gold rated global bond fund. Of five Silver-rated global bond funds, two substantially outperformed PRSNX, one of those at the cost of far higher volatility.

It’s also much less volatile than its peer group.

Across our array of risk, return and risk-return metrics, it’s consistently a top ten fund.

Had we mentioned it’s also a useful diversifier for a portfolio rich in US bonds? Its correlation to the total US bond market, which it has also outperformed, is 0.45. Even its correlation to two top-rated global bonds funds is only about 0.55.

For our MFO Premium subscribers, here is link to latest Risk Profile.

Bottom Line

The argument T. Rowe Price makes for such funds is straightforward: as the bond market, in the US and globally, becomes increasingly unsettled, you want to be able to actively adjust your exposure to keep an asymmetrical balance between risk and reward. Passive fixed-income products have a series of design flaws that don’t occur in passive equity ones and they have embedded risks that are masked when markets are steadily appreciating and that are painfully apparent when the tide turns. Unless you’re very good or very lucky, you are likely better served now by a manager who has the opportunity to move in the face of changing conditions and the experience to move well. You shouldn’t repeat Morningstar’s mistake in ignoring this singularly strong fund.

Fund website

T. Rowe Price Global Multi-Sector Bond

Elevator Talk: Rajiv Jain, GQG Partners Emerging Markets Equity (GQGPX/GQGIX)

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.

Rajiv Jain, with the assistance of a seven-person team, has managed GQG Partners since the fund’s launch on December 28, 2016. While it’s technically accurate to say that Mr. Jain has been managing the fund for six weeks, it would be akin to a 2009 newspaper report noting that Brett Favre has been the Minnesota Vikings quarterback for the past six weeks. Mr. Jain is celebrating his 20th year as an emerging markets investor, the last ten of those years as manager of Virtus Emerging Markets Opportunities Fund (HEMZX / HIEMX).

Mr. Jain joined Vontobel Asset Management as an equity analyst in 1994. By the time he left in May 2016, he’d risen to become their chief investment officer, co-CEO and manager on 15 funds available to American and European investors. He was responsible for portfolios valued at $50 billion, including $30 billion in emerging markets investments and built their Quality Growth boutique. His new firm builds on that tradition: GQG Partners stand for Global Quality Growth Partners, a name which simultaneously reflects his investment style and his interest in creating a partnership with his investors.

It is fair to describe his career to-date as “spectacularly successful.”

From the perspective of American investors, the most visible manifestation of his work in the emerging markets was leadership of the Virtus Emerging Markets Opportunities Fund. During that time, he posted the best record of any emerging markets manager available to US investors.

MFO calculated the return, risk, and risk-return measures for Mr. Jain’s fund from June 2006 – his first full month on the fund – until the month he left the fund, March 2016, then compared them with the other 67 EM funds in operation over the same period. The results are startling.

  Annual returns Maximum drawdown Standard deviation Downside deviation Sharpe ratio
HIEMX 6.8% 53.3% 19.1% 13.5% 0.33
Rank out of 67 3rd 1st 2nd 1st (tie) 2nd

Here’s the translation: over a 10 year period, Mr. Jain posted his category’s third highest returns and the highest among diversified EM equity funds, behind only two niche funds. His fund suffered the smallest maximum drawdown, had the second lowest volatility, and tied for the lowest downside volatility (a variation of standard deviation focusing on “bad” volatility) which led to the group’s second-highest Sharpe ratio (the industry’s most widely-used measure of risk-adjusted returns).

Analysts have noticed. He was recognized as Morningstar’s International Fund Manager of the Year for 2012 (“Jain’s approach has produced attractive risk-adjusted returns over his tenure”) and won Morningstar Europe’s Global Equity Manager of the Year (“Performance metrics … confirm Jain’s ability to limit risk during market downturns, while driving strong returns across a market cycle to offset the inherent weakness in his approach during low-quality rallies. Risk-averse investors who look for global equity exposure are in very good hands here”) nod in 2013. London’s CityWire, looking back over a decade, concluded “Jain has stuck by many of his convictions and has the numbers to back him up.” Investors’ short term reaction to Mr. Jain’s departure from Vontobel was swift and negative: Vontobel stock dropped 11% and nearly $11 billion left the firm.

We asked Mr. Jain about his decision to strike out on his own and his discipline. Here are Mr. Jain’s 200 words on why you should add GQGPX to your due-diligence list:

Make no mistake, I have great respect and affection for my former colleagues but I wanted to create a vehicle that better expressed my own core commitments. I believe GQG Partners will be that vehicle.

Our first commitment to investors is alignment. Managing another person’s wealth is a privilege, an honor. I never forget that it is somebody’s life and retirement at stake. Respecting that means you have to have true and appropriate alignment. That plays out in a few different ways. I like to have the majority of my personal net worth in the same product as my clients; I invest with no other managers and in no hedge funds. It’s meaningful money. We accept no soft dollar commissions. No one at the firm is allowed personal trading; all of us will have a meaningful part of our net worth – including bonuses – in the fund.

We also want our fees to be below the median and we fully expect they will drop over time as our asset base grows.

The second commitment is to a particular culture. It should be very competitive with an intense focus on performance. The average manager has no reason to exist since he can’t outperform a simple index. And if we can’t deliver, we have no reason to exist. Tim Carver, who has overseen a dozen start-ups, is our CEO because I want my focus to be on my portfolio.

This is my 20th anniversary as an EM sole manager. I’ve been through 10 bear markets marked by 20% declines and three bear markets that saw 50%-plus declines. I am not forecasting future performance, but I can honestly report that I outperformed in all of them. That required evolution to match changing markets and a consciousness about taking less risk because, ultimately, absolute returns matter.

If I can forecast anything, it is that we will have years in which we underperform and years where we over perform. Across all those years and all those markets, we will strive to eliminate the noise, keep our focus, maintain a long-term view, trade lightly, dig deep, and cover the ground.

GQG Emerging Markets Equity has a $2500 minimum initial investment which is reduced to $100 for IRAs and other types of tax-advantaged accounts. Expenses are capped at 1.33% through November, 2018. The institutional share class has a $ minimum and expenses capped at 1.08%. Morningstar reports assets of $37 million (1/30/17), though that number is apt to be very fluid. Here’s the fund’s homepage. There’s a nice presentation of the fund’s strategy and distinctions in the inelegantly-named “pitch book.” It’s worth reading.

Launch Alert: Osterweis Emerging Opportunity Fund (OSTGX)

By David Snowball

On October 1, 2012, Callinan Asset Management launched Emerging Growth Partners, L.P. On November 30, 2016, Osterweis Capital Management re-launched the adopted hedge fund as Osterweis Emerging Opportunity Fund.

Manager James Callinan screens the growth universe, including both IPOs and mature growth companies, for companies and stocks that meet his criteria. He says, in general, that

We want to find an undiscovered or misunderstood company that should have sustainable and open-ended revenue growth of at least 20% for three to five years. Finally, we’re looking for rising margins which may include companies that are losing money and then will break into profitability.

That generates a watch-list of about 150 names from which he selects about 30 for the portfolio. The largest weighting for a single stock might be 5%, while a lot will occupy 2-3% of the portfolio.

Without question, the chief attraction of the fund is manager James Callinan. Mr. Callinan was one of the great growth managers of the 1990s and is one of the few growth managers left from that era. He managed Putnam OTC Emerging Growth Fund from 1994 to 1996 and RS Emerging Growth Fund (RSEGX) from 1996 until 2010. His stint with RS Emerging Growth coincided with his founding of the RS Growth Group LLC at Robertson Stephens Investment Management. Mr. Callinan closed the fund to new investors in 2000 after posting 183% returns in 1999 and drawing $1.6 billion in new money over three months. While the fund, like all its growth peers, was crushed in the 2000-02 bear market, unlike most of its peers it rebounded and remained a competitive offering through the first decade of the 21st century.

After leaving RS, Mr. Callinan managed the Emerging Growth Partners hedge fund, whose record is now incorporated into OSTGX’s. The fund far outperformed the average small-growth fund in 2013 with a gain of 54% to its peers’ 40%. In the following three years it was mostly a bit above average, but not stunningly so.

Mr. Callinan claims to have learned a lot about managing in the challenging markets that followed the 1990s. He professes to be more value conscious and to be running a more concentrated portfolio than he did in the 90s. He’s also go over half of his own net worth invested in the $40 million fund.

Investor shares of the fund carry 1.50% expense ratio, after waivers. The minimum initial investment is $5,000.

The fund’s website is Osterweis Funds.


Launch Alert: Symons Concentrated Small Cap Value Institutional Fund (SCSVX)

By David Snowball

On December 5, 2016, Symons Capital launched Symons Concentrated Small Cap Value Fund. It is, so far, available only as an institutional offering with a $1 million minimum.

The fund is an extension of the Symons Concentrated Small Cap Value composite.  As of 12/30/2016, that composite reflected quite healthy investment performance.

It’s particularly interesting that the fund’s 2:1 outperformance compared to its benchmark came without heightened volatility.  Symons Concentrated SCV composite had a standard deviation of 11.15% while the Russell 2000 Value, its benchmark, clocked-in at 15.5%.

It goes beyond “interesting” to “impressive” when you add in the fact that the separate account composite holds only 18 stocks and the fund intends to hold about the same. This makes Symons Concentrated SCV the most concentrated small cap fund in existence; the only small cap funds with fewer listed holdings are funds-of-funds and, effectively, hold hundreds of stocks. The plan is to purchase fewer than 20 stocks with market capitalizations of less than $3 billion across a broad sector allocation.

They describe themselves as ‘traditional deep value manager with a risk management focus.” Their target universe is “sad stocks,” that is, the temporarily depressed stocks of firms with good products and services.  Given the managers preference for companies with long-term sustainable competitive advantages, the description might be: systematically searching for the best and saddest small-cap blue chips.

The fund is managed Colin Symons. In our December Elevator Talk with Mr. Symons, we described him as “a serial over-achiever. Mr. Symons graduated from Williams College, arguably the best liberal arts college in America, in only three years. He started his career as a software developer, working with and writing code for both the IRS and major financial services firms such as Chase Manhattan Bank. He eventually earned recognition as a Microsoft Certified Solution Developer, a globally recognized designation. His interests grew beyond financial software into financials; he learned security analysis and earned his CFA. At Symons Capital he manages $483 million in their Value, Small Cap Value and Concentrated Small Cap Value strategies and funds.”

Institutional shares of the fund carry 1.61% expense ratio, after waivers. The minimum initial investment is $1 million.

The fund’s website is Symons Funds, but you might find a somewhat richer discussion and details about the SMA composite at the adviser’s main site, Symons Capital. In both cases there’s an iconic picture of Pittsburgh which makes me happily nostalgic.

Funds in registration

By David Snowball

An “arabesque” is either a graceful move in ballet or a graceful and intricate design in art and architecture. I’ll be fascinated to see how it plays out as a fund.

American Beacon TwentyFour Strategic Income

American Beacon Twenty Four Strategic Income will seek high current income with some hope of capital appreciation. The plan is to buy income-producing … uhh, stuff. Almost any conceivable stuff, globally and non-diversifiedly. The fund will be managed by a team from TwentyFour Asset Management, a London-based fixed-income specialist with nearly £8 billion in AUM. The opening e.r. will be 1.10% and the minimum initial investment is $2,500 for the Investor share class.

Arabesque Systematic USA Fund

Arabesque Systematic USA Fund will seek capital appreciation over the full market cycle with below benchmark levels of risk. The plan is to confuse me, apparently. They’re going to allocate 0-100% in stocks and the remainder in cash. They’re going to assess the appropriate equity exposure daily, which implies the prospect of daily rebalancing. The equity portfolio is biased toward momentum, moderate growth and ESG-screened equities. The fund will be managed by Dr. Hans-Robert Arndt and Philipp Müller of Arabesque Asset Management which is based in London and Frankfurt. The opening e.r. will be 1.20% and the minimum initial investment is $2,500.

Arabesque Systematic International Fund

Arabesque Systematic International Fund will seek capital appreciation over the full market cycle with below benchmark levels of risk. They’re going to allocate 0-100% in non-US stocks and the remainder in dollars. They’re going to assess the appropriate equity exposure daily, which implies the prospect of daily rebalancing. The equity portfolio is biased toward momentum, moderate growth and ESG-screened equities. The fund will be managed by Dr. Hans-Robert Arndt and Philipp Müller of Arabesque Asset Management which is based in London and Frankfurt. The opening e.r. will be 1.20% and the minimum initial investment is $2,500.

Clearbridge All Cap Growth ETF

Clearbridge All Cap Growth ETF will seek long-term capital appreciation. The plan is to invest in a diversified portfolio of large, medium and small capitalization stocks that have the potential for above-average long-term earnings and/or cash flow growth. The fund will be managed by Evan Bauman, Peter Bourbeau, Richard A. Freeman and Margaret Vitrano of ClearBridge Investments, LLC. The opening e.r. will be 0.59%. Since it’s an ETF, albeit an actively-managed one, there is no minimum initial investment.

Ivy Crossover Credit Fund

Ivy Crossover Credit Fund will seek to provide total return through a combination of high current income and capital appreciation. The plan is to invest in bonds on the razor’s edge between investment grade and junk; such instruments can … wait for it! crossover from one category to the next. Some of those bonds will also fall into the “rising star” and “fallen angel” categories, though it’s not explained why this presents a compelling investment opportunity. The fund will be managed by Rick Perry of Ivy Investment Management. The opening e.r. hasn’t been released for any of the seven projected share classes and the minimum initial investment for the no-load “N” shares appears to be set by folks like Schwab.

Manager changes, January 2017

By Chip

The good folks at Grandeur Peak worked hard in January to realign and rationalize the manager line-ups across all their funds, then Stewart Spencer left Emerging Opportunities (GPEOX) at month’s end to pursue other paths and an additional shuffle was in order. It’s worth watching. Meanwhile, founders Robert Gardiner and Blake Walker have resumed joint management of Global Opps and International Opp.

T. Rowe Price and Fidelity both had changes sufficiently consequential to trigger Morningstar reviews of their analyst ratings.

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.

Ticker Fund Out with the old In with the new Dt
TNYAX 1290 Global Talents Fund William Howard is no longer listed as a portfolio manager for the fund. Anne Tolmunen joins Mark Beveridge, Alwi Chan and Kenneth Kozlowski in managing the fund. 1/17
AEEAX Aberdeen Asia Bond Fund Victor Rodriguez is no longer listed as a portfolio manager for the fund. Adam McCabe, Kenneth Akintewe, Thomas Drissner and Gareth Nicholson will continue to manage the fund. 1/17
IIESX AI International Fund (formerly American Independence Multi-Manager International Fund) Navellier has resigned as a subadviser to the fund, therefore Louis Navellierwill no longer serve as a portfolio manager for the fund. James Creighton and Nic Wherry will be joined by Charles McNally on the management team. 1/17
ABALX American Balanced Fund Dina Perry is no longer listed as a portfolio manager for the fund. John Smet, Hilda Applbaum, Gregory Johnson, Alan Berro, James Mulally, Jeffrey Lager, Michael Kerr, Alan Wilson and John Queen are continuing to manage the fund. 1/17
LGNAX American Independence Large Cap Growth Fund Navellier has resinged as a subadviser to the fund, therefore Louis Navellier and Michael Garaventa will no longer serve as portfolio managers for the fund. Charles McNally is now managing the fund. 1/17
MBESX AMG Chicago Equity Partners Balanced Fund Effectively immediately, David Coughenour will no longer serve as a portfolio manager for the fund. The fund will continue to managed by Robert Kramer, Patricia Halper, Curt Mitchell and Michael Budd. Check out our profile! 1/17
CESVX AMG Chicago Equity Partners Small Cap Value Fund Effectively immediately, David Coughenour will no longer serve as a portfolio manager for the fund. Patricia Halper, Robert Kramer and William Murray will continue to manage the fund. 1/17
MPAFX AMG Managers Cadence Capital Appreciation Fund William Bannick is no longer listed as a portfolio manager for the fund. Robert Fitzpatrick, Michael Skillman, Robert Ginsberg and Stephen Demirjian will continue to manage the fund. 1/17
MECIX AMG Managers Cadence Emerging Companies Fund William Bannick is no longer listed as a portfolio manager for the fund. Robert Fitzpatrick, Michael Skillman, Robert Ginsberg and Stephen Demirjian will continue to manage the fund. 1/17
MCMAX AMG Managers Cadence Mid Cap Fund William Bannick is no longer listed as a portfolio manager for the fund. Robert Fitzpatrick, Michael Skillman, Robert Ginsberg and Stephen Demirjian will continue to manage the fund. 1/17
BXMIX  Blackstone Alternative Multi-Strategy Fund Effective January 25, 2017, Wellington Management Company LLP no longer serves as a sub-adviser to the fund. The fund’s assets managed by Wellington have been re-allocated to the Fund’s other sub-advisers. 1/17
BPEAX BP Capital TwinLine Energy Fund Mark Laskin will no longer serve as a portfolio manager for the fund. William Woodson “Trip” Rodgers joins David Meaney, Brian Bradshaw, Toby Loftin and Brian Olsen in managing the fund. 1/17
BUFHX Buffalo High Yield Fund Alexander Hancock will no longer serve as a portfolio manager for the fund. Paul Dlugosch and Jeffrey Sitzman will continue to manage the fund. 1/17
BUFMX Buffalo Mid Cap Fund No one, but . . . Robert Male and Dave Carlsen are joined by Scott Moore on the management team. 1/17
BUFSX Buffalo Small Cap Fund No one, but . . . Robert Male and Jamie Cuellar are joined by Alexander Hancock on the management team. 1/17
CDHIX Calvert Developed Markets Ex-U.S. Responsible Index Fund Dale Stout, Lise Bernhard and Laurie Webster are no longer listed as portfolio managers for the fund. Thomas Seto will now manage the fund. 1/17
CIOAX Calvert International Opportunities Drew Edwards, Gregory Gigliotti, Marco Priani, Jessica Reuss, David Runkle and William Sterling are no longer listed as portfolio managers for the fund. Aidan Farrell, Jade Huang and Christopher Madden will now manage the fund. 1/17
CSXAX Calvert U.S. Large Cap Core Responsible Index Dale Stout, Lise Bernhard and Laurie Webster are no longer listed as portfolio managers for the fund. Thomas Seto will now manage the fund. 1/17
CGJAX Calvert U.S. Large Cap Growth Responsible Index Fund Dale Stout, Lise Bernhard and Laurie Webster are no longer listed as portfolio managers for the fund. Thomas Seto will now manage the fund. 1/17
CFJAX Calvert U.S. Large Cap Value Responsible Index Fund Dale Stout, Lise Bernhard and Laurie Webster are no longer listed as portfolio managers for the fund. Thomas Seto will now manage the fund. 1/17
CMJAX Calvert U.S. Mid Cap Core Responsible Index Fund Dale Stout, Lise Bernhard and Laurie Webster are no longer listed as portfolio managers for the fund. Thomas Seto will now manage the fund. 1/17
CHNAX Clough China Fund Eric Brock is no longer serving as co-manager of the fund. Francoise Vappereau and Brian Chen will remain as co-managers of the fund. 1/17
RRGAX Deutsche Global Real Estate Securities Fund Joseph Fisher and Daniel Ekins are no longer listed as portfolio managers for the fund. Robert Thomas joins John Hammon, John Vojticek, Chris Robinson and David Zonavetch in managing the fund. 1/17
DHROX Diamond Hill Research Opportunities Fund Effective January 31, 2017 all references to Bhavik Kothari in the Summary Prospectus, Prospectus and Statement of Additional information are removed. The rest of the extensive team remains. 1/17
DAIOX Dunham International Bond Fund Olaf Rogge is no longer listed as a portfolio manager for the fund. The other ten managers continue to manage the fund. 1/17
ELASX Emerald Small Cap Value Fund Effective January 3, 2017, Richard Giesen, Jr. is no longer serving as a manager of the fund. Steven Russell and Ori Elan will remain as the managers of the fund. 1/17
FDFFX Fidelity Independence Robert Bertelson no longer serves as portfolio manager of the fund. Jeffry Feingold will continue to manage the fund. 1/17
FSCRX Fidelity Small Cap Discovery Star manager Chuck Myers will step down at the end of 2017 Derek Janssen will switch over from Small Cap Value  
FCPVX Fidelity Small Cap Value Derek Janssen moves out to lead Small Cap Discovery in early 2018, leading to his gradual phase-out here and phase-in there Clint Lawrence will co-manage the fund for an undetermined period with Janssen before, they hope, succeeding him.  
FDVLX Fidelity Value Fund Stephen Barwikowski no longer serves as a co-manager of the fund. Matthew Friedman, Justin Bennett, Laurie Bertner, John Mirshekari, Shadman Riaz and Katherine Buck will continue to manage the fund. 1/17
GPEOX Grandeur Peak Emerging Markets Opportunities Fund Spencer Stewart has decided to follow his heart and pursue a new path. As a result, he will be leaving Grandeur Peak shortly. Blake Walker and Zach Larkin will remain as portfolio managers of the fund. 1/17
GPEOX Grandeur Peak Emerging Markets Opportunities Fund Robert Gardiner and Randy Pearce are no longer listed as portfolio managers for the fund. Blake Walker and Spencer Stewart will continue to manage the fund, joined by Zach Larkin as a “Guardian Portfolio Manager.” 1/17
GPMCX Grandeur Peak Global Micro Cap Fund Blake Walker is no longer listed as a portfolio manager for the fund. Amy Hu Sudnerland is joined by Mark Masden in managing the fund. Robert Gardiner remains as the “Guardian” manager. 1/17
GPGOX Grandeur Peak Global Opportunities Fund No one, but … Robert Gardiner and Blake Walker will continue as porfolion managers. Amy Hu Sunderland is listed as “Guardian” manager. 1/17
GPROX Grandeur Peak Global Reach Fund Robert Gardiner and Blake Walker are no longer listed as portfolio managers for the fund. Amy Hu Sudnerland, Liping Cai, Zach Larkin, Stuart Rigby, Brad Barth and Mark Madsen continue to manage the fund. Randy Pearce is listed as the “Guardian” manager. 1/17
GPIOX Grandeur Peak International Opportunities Fund Randy Pearce and Spencer Stewart are no longer listed as portfolio managers for the fund. Blake Walker and Robert Gardiner will continue to manage the fund, joined by Amy Hu Sunderland as a “Guardian Portfolio Manager.” 1/17
GLLIX Great Lakes Large Cap Value Fund Effective December 31, 2016, Steve Wittwer has resigned as portfolio manager and research analyst. Edward Calkins, Wells Frice and Huong Le will continue to manage the fund. 1/17
HLMOX Harding, Loevner Frontier Emerging Markets Portfolio G. Rusty Johnson is no longer listed as a portfolio manager for the fund. Pradipta Chakrabortty, Babatunde Ojo and Richard Schmidt will continue to serve as the portfolio managers of the fund. 1/17
HLMGX Harding, Loevner Global Equity Portfolio Alex Walsh will no longer serve as a portfolio manager for the fund. Peter Baughan, Ferrill Roll, Christopher Mack and Richard Schmidt will continue to serve as the portfolio managers of the fund. 1/17
HLMNX  Harding, Loevner International Equity Portfolio Peter Baughan will no longer serve as a portfolio manager for the fund. Ferrill Roll, Alexander Walsh, Bryan Lloyd, Patrick Todd and Andrew West will continue to serve as the portfolio managers of the fund. 1/17
HNASX Homestead Growth Fund Robert Sharps will no longer serve as a portfolio manager for the fund. Taymour Tamaddon will now manage the fund. 1/17
HCGAX HSBC Emerging Markets Debt Fund No one, but . . . Zeke Diwan joins Vinayak Potti in managing the fund. 1/17
HBMAX HSBC Emerging Markets Local Debt Fund No one, but . . . Billy Lang joins Nishant Upadhyay in managing the fund. 1/17
ICRAX ICON Consumer Staples Fund Rob Young, Craig Callahan and Donovan Paul are no longer listed as portfolio managers for the fund. Scott Snyder will now manage the fund. 1/17
ICIAX ICON Industrials Fund Rob Young, Craig Callahan and Donovan Paul are no longer listed as portfolio managers for the fund. Zach Jonson will now manage the fund. 1/17
ICTTX ICON Information Technology Fund Rob Young, Craig Callahan and Donovan Paul are no longer listed as portfolio managers for the fund. Derek Rollingson will now manage the fund. 1/17
JSFBX John Hancock Seaport Fund Effective June 30, 2017, Kirk Mayer will no longer serve as a portfolio manager of the fund. Following the effective date, Nicholas Adams, Steven Angeli, John Averill, Jennifer Berg, Robert Deresiewicz, Ann Gallo, Bruce Glazer, Andrew Heiskell, Jean Hynes, Mark Lynch and Keith White will continue as leaders of the fund’s investment management team. 1/17
LIMAX  Lateef Fund David Geisler no longer serves as a co-portfolio manager of the fund. Quoc Tran and James Tarkenton continue as co-portfolio managers of the fund. 1/17
LITOX Lazard Global Realty Equity Portfolio David Ronco and Antony Knep are no longer listed as portfolio managers for the fund. Jay Leupp will continue to manage the fund. 1/17
LREOX Lazard US Realty Equity Portfolio David Ronco is no longer listed as a portfolio manager for the fund. Jay Leupp will continue to manage the fund. 1/17
LRIOX Lazard US Realty Income Portfolio David Ronco is no longer listed as a portfolio manager for the fund. Jay Leupp will continue to manage the fund. 1/17
CURAX MainStay Cushing Energy Income Fund Judd Cryer will no longer serve as a portfolio manager of the fund. Matthew Lemme and Nick English will join Jerry Swank as portfolio managers of the fund. 1/17
ICAUX MainStay ICAP Equity Fund, which will be reorganized into the MainStay Epoch US Equity Yield Fund. Andrew Starr, Matthew Swanson and Thomas Cole are no longer listed as portfolio managers for the fund. William Priest, Eric Sappenfield, John Tobin, Kera Van Valen and Michael Welhoelter will now manage the fund. 1/17
ICSRX MainStay ICAP Select Equity Fund, which will be reorganized into the MainStay Epoch US Equity Yield Fund. Andrew Starr, Matthew Swanson and Thomas Cole are no longer listed as portfolio managers for the fund. William Priest, Eric Sappenfield, John Tobin, Kera Van Valen and Michael Welhoelter will now manage the fund. 1/17
MAPAX MainStay MAP Fund Andrew Starr, Matthew Swanson and Thomas Cole are no longer listed as portfolio managers for the fund. David Pearl, William Priest and Michael Welhoelter join Christopher Mullarkey, James Mulvey and J. Christian Kirtley in managing the fund. 1/17
MGJAX MassMutual Select BlackRock Global Allocation Fund Romualdo Roldan will no longer serve as a portfolio manager for the fund. Russ Koesterich, David Clayton and Kent Hogshire join Dan Chamby and Dennis Stattman in managing the fund. 1/17
MOSAX MassMutual Select Overseas Fund No one, but . . . Michael Manelli joins David Herro, Demetris Georghiou, Filipe Benzinho, Gerd Woort-Menker, Georgina Maxwell, Jeroen Huysinga, Daniel Ling, Marcus Smith and David Herro in managing the fund 1/17
MGEMX Morgan Stanley Institutional Fund Emerging Markets Portfolio Samuel Rhee will no longer serve as a portfolio manager to the fund Baite Ali, Munib Madni, Ruchir Sharma, Eric Carlson and Paul Psaila will continue to manage the fund. 1/17
NOIGX Northern International Equity Fund Douglas McEldowney is no longer listed as a portfolio manager for the fund. Mark Sodergren will now manage the fund. 1/17
PYFRX Payden Floating Rate Fund Sabur Moini is no longer listed as a portfolio manager for the fund. Jordan Lopez will continue to manage the fund. 1/17
PYHRX Payden High Income Fund Sabur Moini is no longer listed as a portfolio manager for the fund. Jordan Lopez will continue to manage the fund. 1/17
PRFAX PIMCO Total Return ESG Fund No one, but . . . Alex Struc joins Scott Mather, Alex Struc, Mark Kiesel and Mihir Worah in managing the fund. 1/17
PWREX Pioneer Real Estate Shares No one, but . . . Gina Szymanski will join the portfolio management team of Matthew Troxell, J. Hall Jones and John Garofalo. 1/17
PLBBX Plumb Balanced Fund Nathan Plumb has resigned as Associate Portfolio Manager, Vice President, and Chief Financial Officer of the fund in order to pursue other opportunities. Thomas Plumb will continue to manage the fund. 1/17
PLBEX Plumb Equity Fund Nathan Plumb has resigned as Associate Portfolio Manager, Vice President, and Chief Financial Officer of the fund in order to pursue other opportunities. Thomas Plumb will continue to manage the fund. 1/17
HDCAX Rational Dividend Capture Fund Michael Schoonover and David Miller are no longer listed as portfolio managers for the fund. Richard Garcia and Patrick Adams will now manage the fund. 1/17
SCGLX Scout Global Equity Fund Charles John will no longer serve as a portfolio manager for the fund. Derek Smashey and John Indellicate will continue to manage the fund. 1/17
TRLGX T. Rowe Price Institutional Large Cap Growth Fund Robert Sharps will no longer serve as a portfolio manager for the fund. Taymour Tamaddon, formerly of Health Science, will now manage the fund. 1/17
WMCEX Teton Westwood Mid-Cap Equity Fund Diane Wehner and Charles Stewart are no longer listed as portfolio managers for the fund. Nicholas Galluccio will serve as the sole portfolio manager. 1/17
TORYX The Torray Fund  Fred Fialco is no longer listed as a portfolio manager for the fund. Robert Torray is joined by Shawn Henderson in managing the fund. Mssr. Henderson previously served as co-manager from 2008-2012. 1/17
TMGFX Turner Midcap Growth Fund Christopher McHugh, who has managed the fund since the heady days of 1996, is out. As is, Christopher Baggini Jason Schrotberger will now manage the fund 1/17
VCVSX Vanguard Convertible Securities Fund Jean-Paul Nedelec is no longer listed as a portfolio manager for the fund. Abraham Ofer, Stuart Spangler, Jean-Piere Latrille and Peter Raketic will continue to manage the fund. 1/17
IICFX Voya Multi-Manager International Factors Fund Nicolas Choumenkovitch and Tara Stilwell are no longer listed as portfolio managers for the fund. Jaime Lee, Oleg Nusinzon, Steven Wetter and Kai Yee Wong will now manage the fund. 1/17
WLCAX Wells Fargo Large Company Value Fund Stephen Block and William Schaff are no longer listed as portfolio managers for the fund. Dennis Bein, Ryan Brown and Harindra de Silva will now manage the fund. 1/17
WTEIX Westcore Large-Cap Dividend Fund Craig Juran will no longer serve as a portfolio manager for the fund. Alex Ruehle, Lisa Ramirez, Paul Kuppinger, Troy Dayton, Derek Anguilm and Mark Adelmann will now manage the fund. 1/17
WTMGX Westcore Mid-Cap Value Dividend Fund Craig Juran will no longer serve as a portfolio manager for the fund. Alex Ruehle, Lisa Ramirez, Paul Kuppinger, Troy Dayton, Derek Anguilm and Mark Adelmann will now manage the fund. 1/17
WTSLX Westcore Small-Cap Growth Fund Craig Juran will no longer serve as a portfolio manager for the fund. Mitch Begun, Adam Bliss and Brian Fitzsimons will now manage the fund. 1/17
GVIEX Wilmington Multi-Manager International Fund Dimensional Fund Advisors, J O Hambro Capital Management Limited, LSV Asset Management, Northern Cross LLC, Oberweis Asset Management, Inc. and Parametric Portfolio Associates LLC were removed as sub-advisors to the fund. Allianz Global Investors U.S. LLC, AXA Investment Managers, Inc., Berenberg Asset Management LLC, Nikko Asset Management Americas, Inc. and Schroder Investment Management North America, Inc. were added as sub-advisors to the fund. 1/17
YWBIX Yorktown Mid-Cap Fund Daniel Crowe, Chad Kilmer, Robert Lanphier, Mark Leslie, David Mitchell and David Ricci are no longer listed as portfolio managers for the fund. David Basten and Michael Dixon are now managing the fund. 1/17

Briefly noted

By David Snowball


It feels like an unusually consequential month for some of the fund industry’s most trusted voices. Scott Burns, long-time Dallas Morning News columnist, announced his retirement after “40 years of deadlines, 36 in national syndication. That’s over 5,000 columns and more than 3.5 million words.”  Rather than share final thoughts on personal finance (which you should have been able to glean from his preceding 3.5 million words), Scott offered “collection of columns that I wrote by leaving my computer, office and comfort zone.” If you write him, he’ll share a copy of them.

Bob Cochran, a member of MFO’s Board of Directors and one of the principals at PDS Planning in Columbus, Ohio, is phasing into retirement by year’s end and has agreed to share guidance with us from the series of choices he’s going to be making along the way.

Chuck Jaffe continues negotiating his separation from the Dow-Jones empire.  The on-again, off-again decision by DJ to continue hosting his column was, at last check, on again but the minions of the empire seem a bit inconstant. Chuck’s radio show, which is an independent enterprise, will continue unaffected.

Dan Weiner, a friend of MFO but most famously the guy behind the very successful Independent Adviser for Vanguard Investors newsletter, announced that his firm bought Braver Wealth Management, LLC and Braver Capital Management this week. That gives him a $4.7 billion wealth management company with 3,000 clients and a good newsletter. The combined firm will retain the Adviser Investments name.

All of us who follow MFO’s (mostly mutual fund) discussion board are profoundly saddened that Ted’s health no longer permits him to actively participate. Ted’s daily routine was to rise long before dawn and begin posting links to important fund and finance stories, even before the coffee was done brewing. (Yikes!) Over a span of two decades and three discussion boards (Brill’s MFI, FundAlarm, and MFO) Ted has shared hundreds of thousands of links and provoked tens of thousands of discussions. He and his wife Lynn remain in our thoughts and in our hearts.

Briefly Noted . . .

Thanks, as ever, to The Shadow whose tenebrous excellence surprises even the folks at Morningstar.

Effective at the close of business on February 28, 2017, the outstanding Class A and Class C shares of the Thomas White International Fund (TWWIX) and the Thomas White Emerging Markets Fund (TWEMX) will be converted into Class I shares. Not to suggest gaming the system, but I’d imagine that investors interested in the funds would want to immediately buy “C” class shares, knowing that they’ll become low-cost “I” shares within a month. That might well apply to current holders of higher-cost Investor class shares.

Vertical Capital Income (VCAPX) has temporarily suspended sale of its shares. Here’s the word:

Because the Fund has experienced a delay in filing its 2016 annual report, it has been unable to update its Prospectus and Statement of Additional Information. Therefore, the Fund’s Board of Trustees has determined to temporarily suspend the sale of Fund shares.

Not sure what the underlying issue is, but VCAPX is structured as an interval fund, the complexities of which might account for the issue.


Diamond Hill Capital Management has reduced its management fee by 5 bps for three Diamond Hill Funds: Mid Cap, Research Opportunities and Financial Long-Short.

Segall Bryant & Hamill Small Cap Value Fund (SBHVX) has lowered its management fee from 0.95% to 0.83%. The fund’s new e.r. is 1.08%

CLOSINGS (and related inconveniences)

Kopernik Global All-Cap (KGGAX) is soft closing on March 31, 2017. The advisor’s explanation is almost cute: “The mutual fund is being soft-closed at around $1 billion because we know how inconvenient a hard close can be for clients.” The fund’s performance offers a fascinating case-study in the risk of looking at performance over standard reporting periods. Here’s Morningstar’s report of how they’ve been doing:

Whoa! David Iben, superstar investor, strikes again! The view changes a little when you look at a picture of the fund’s performance since inception. KGGAX is the blue line:

Okay, admittedly the blue line ends up higher than the orange (peer) line but the … uhh, “performance hiccup” in between is entirely missing from the standard data report.

RMB Mendon Financial Services Fund (RMBKX, formerly Burnham Financial Services Fund) will soft-close on March 15, 2017.It’s a remarkably solid $500 million fund, quite apart from its five-star rating.

Towle Deep Value Fund (TDVFX) has closed to new investors using third-party channels such as Schwab. It’s an awfully admirable decision. They’ve been struggling for years to get attention. They returned 54% last year, despite a contracting pool of opportunities, and got serious attention. Having concluded that there simply aren’t many opportunities and reluctant to hold cash, they’re closing the door to their most popular channel. It seems very principled to me.


Effective immediately, the American Independence Multi-Manager International Fund (IIESX) has been renamed the AI International Fund.

On December 15, 2016, the Board of Trustees approved renaming BlackRock Small Cap Growth Equity Portfolio (CSGEX) as BlackRock Advantage Small Cap Growth Fund.

Cambiar Unconstrained Equity Fund (CAMAX) has been renamed Cambiar Global Ultra Focus Fund, and the description of the Fund’s principal investment strategies has been revised to better reflect the investment strategies of the Fund. Uhhh … the Fund will typically invest in a portfolio of 20-30 issuers.  Not to disrespect its ULTRA FOCUS focus, the fund database at MFO Premium lists 150 U.S. equity funds and 35 global equity funds with 30 or fewer holdings.

CBRE Clarion Long/Short Fund (CLSVX) is, subject to shareholder approval, being adopted by the Voya Funds, at which point it will be renamed Voya CBRE Long/Short Fund. Expect to see the change in May.

CMG Global Equity Fund (GEFAX) is becoming CMG Mauldin Solutions Core Fund; in the process it will switch advisers and drop the emphasis on controlling volatility from its investment objectives. Given that the fund is minuscule, expensive and vastly lags its peers (up 3% since inception while its peer group is up 23%), the change is warranted.

GMO Debt Opportunities Fund has been renamed GMO Opportunistic Income Fund (GMODX); the fund’s $750 million minimum initial investment remains intact.

Highland Opportunistic Credit Fund (HNRAX) is being reorganized as NexPoint Opportunistic Credit Fund. The key is the NexPoint will be an interval fund, which means that you will be permitted to ask for your money back once per quarter. The managers, however, might not honor all requests for sales; that is, you might want to sell $100,000 in fund shares but (1) the next window might not be until April 1 and (2) they might be willing to return just $60,000 on that date with the remained available at the July 1 redemption. The theory says this gives the manager the ability to invest on your behalf in illiquid or thinly-traded shares without fearing that a sudden rush to the exits will crash the fund. To date, the fund’s substantial volatility has not been accompanied by outsized gains.

On April 1, 2017, Innealta Capital Country Rotation Fund (ICCNX) becomes Dynamic International Opportunity Fund. Upside: no one knew what an “Innealta” was to begin with. Downside: the new name just needs to add “strategic” to win the marketing buzzwords trifecta. At the same time, Innealta Capital Sector Rotation Fund (ICSNX) becomes Dynamic U.S. Opportunity Fund. Note to the Innealta folks: you use the same ticker symbol for the “N” class shares of both funds in your SEC filing.

I don’t think that’s allowed.

All of the Janus Funds name will change to reflect Janus Henderson as part of the fund’s name.

Effective March 31, 2017 PNC Large Cap Growth Fund (PEWAX) will become PNC Multi-Factor Large Cap Growth Fund. What, you might ask, does “multi-factor” mean? Roughly: “we need a marketing hook.” Here’s the explanation from PNC:

The Adviser evaluates issuers and selects investments based on a variety of quantitative measures, referred to as “factors.” The Fund’s multi-factor quantitative process uses quality factors, such as a company’s stability of earnings; momentum factors, such as movements in both price and earnings and earnings surprises; and value factors, such as price to earnings, price to book, and price to cash flow ratios.

By this logic, of course, every active mutual fund might crown itself a Multi-Factor fund since every manager accounts for this same constellation of quality, growth and value.

PNC Large Cap Value Fund (PLVAX) undergoes an identical renaming. In a bolder move, PNC Large Cap Core (PLEAX) becomes PNC Multi-Factor All Cap Fund.

Effective as of February 28, 2017, all 18 SunAmerica Mutual Funds are being rebranded as AIG Funds. Generously, you’d say that three of the 18 have respectable 1, 3, and 5 year records.

Voya Capital Allocation Fund (ATLAX) has been renamed Voya Global Multi-Asset Fund.


AllianceBernstein/TWM Global Equity & Covered Call Strategy Fund (TWMVX) will liquidate on February 27, 2017.

Appleton Equity Growth (APLEX) liquidates on February 28, 2017.

Federated Managed Risk Fund (FDRAX) has managed to get liquidated. I’m guessing that neither the $5 million portfolio nor the last 12 months’ worth of performance has helped. FDRAX is the blue line.

It bids farewell on February 24, 2017

Fidelity Income Replacement 2018 (FIRKX) and Income Replacement 2020 (FIRLX), with just $15 million between the two funds, will each liquidate on or about March 31, 2017. 

Mariner Managed Futures Strategy Portfolio (a one-star fund with no ticker symbol) will liquidate on March 20, 2017.

The Board of Trustees of the MassMutual Select Funds has approved “Liquidation and Termination” of MassMutual Select Diversified International Fund (MMZAX), on or about April 28, 2017 

In February, Hennessy Large Value Fund (HLVFX) will merge into Hennessy Cornerstone Value Fund (HFCVX). Depending on the time frame, the funds’ correlation sits around 0.88 – 0.90 with one fund temporarily inching ahead of the other before falling back.

On January 24, 2017, the Board of Trustees of AIM Investment Funds approved a Plan of Liquidation and Dissolution for Invesco Macro International Equity Fund (VZMAX).The fund turned out to be consistently better at capturing downside than upside, an annoying habit for the few brave souls who bought it. The fund will be liquidated on or about February 27, 2017

Janus International Equity Fund (JAIEX) will liquidate on or about March 30, 2017. The fund did okay under a series of journeymen from 2006-2010, but the team in place since 2010 has steered it to consistently sub-par returns. Given the recent merger with Henderson Global, it was likely an opportune moment to cut ties.

Mirae Asset Global Growth Fund (MGAGX), sometimes designated just Global Growth Fund has become “the late Global Growth Fund.”

Palmer Square Long/Short Credit Fund (PCHAX) will be liquidated on or about February 15, 2017.

Putnam Global Energy Fund (PGEAX) will, pending shareholder approval, merge into Putnam Global Natural Resources Fund (EBERX). In anticipation of that development, Global Energy will close to new investors on March 7, 2017.

RidgeWorth Aggressive Growth Allocation Strategy (SLAAX) will liquidate on March 17, 2017. It’s a harmless fund-of-Ridgeworth-funds with no assets and no real distinction.

Turner Medical Sciences Long/Short Fund (TMSFX) and Turner SMID Cap Growth Opportunities Fund (TMCGX) have disappeared. The official text explaining the change is intriguing: the funds “did not receive the favorable vote of a majority of the outstanding voting securities of each Fund for its new investment advisory agreement and therefore each Fund will begin the complete liquidation of its assets.” Curious. Five Turner funds asked for approval of a new investment advisory agreement which, from the investors’ perspective, offered them a bit of financial gain. After failing to secure a quora at several attempted shareholders meetings, Turner pulled the plug. The weird thing is that they did get enough votes for three of five funds, all of which were offered the exact same agreement.

Virtus Emerging Markets Equity Income Fund (VEIAX) and Virtus Essential Resources Fund (VERAX) are closing to new investors on March 3, 2017 and will liquidate on March 15. The former was a good idea that never played out, the latter was weak even by the standards of a beaten-down peer group.