Dear friends,
Welcome to the August issue of the Mutual Fund Observer! We just completed one of the five rainiest Julys in the city’s history, with three torrential downpours (the garden celebrates) and roll expectantly into August.
For those of us who teach for a living, August is the season of watchful waiting, a phrase lifted from the Christian celebration of Advent. The faithful are waiting for … you know, Continue reading →
I’m struck by the near unanimity of Informed Commentary on the direction of the US stock market. People seem to agree that “the magic number” is 15%.
The disagreement comes in the query: but 15% in which direction? There, there’s about a 50/50 split among the people paid to pretend to know the future. Both growth and recession, market melt-up and market meltdown scenarios are broadly represented. “The melt-up in risk assets continues,” saith HSBC, the global bank based in London. Remember that markets spiked about Alan Greenspan’s original warning about “irrational exuberance.”
We’ll offer a snippet Continue reading →
In December 2020, Chuck Akre (1941 – today) stepped away from managing the Akre Focus fund, though he remains chairman of Akre Capital Management. During much of his 50+ year investing career, he built an unassailable reputation for discipline, independence, and excellence. The core of his investment strategy was captured by “the three-legged stool.” He looked for (1) extraordinary Continue reading →
On June 17, 2025, Rainwater Equity launched their first fund called, well, Rainwater Equity ETF. The actively managed ETF will pursue long-term capital appreciation by investing in a portfolio of “recurring revenue businesses led by exceptional management teams for the long run.” As an example, almost 10% of the fund is invested in the Canadian firm, Constellation Software, Inc. Constellation acquires and manages business software firms which tend to have a recurring revenue (monthly subscription) model and are “sticky” by nature (changing software, especially at the enterprise level, is hugely painful so companies try to avoid it). They believe such businesses offer more durable growth, fewer surprises, and greater long-term wealth creation potential.
Rainwater is led by, and the fund is managed by, Joseph R. Shaposhnik, former portfolio manager Continue reading →
Blessed are the forgetful, for they “get the better” even of their blunders. Friedrich Nietzsche, “Our Virtues,” Beyond Good and Evil (1886)
Our summer tradition is to update you on our ruminations and recommendations from three (or five) years ago. That exercise serves three purposes:
Dear friends,
Welcome to the “Midsommar in Scandinavia” issue of the Mutual Fund Observer. Chip and I are enjoying a long-planned holiday in Sweden and Norway. We’re equally delighted that you’re here … and we’re there!
Among other things (how would I know for sure? I’m in Gamla Stan), Lynn Bolin addresses the emerging threat of tariff-induced inflation with “Protecting Against Tariff Induced Inflation,” analyzing how widespread tariffs will likely be passed through to consumers and drive inflation to an estimated 3.4% peak next quarter. Drawing on five years of post-pandemic bond performance data, he demonstrates Continue reading →
Matthews Asia is navigating a challenging period. Founded 30 years ago by Paul Matthews, the firm achieved a rare trifecta: consistently outstanding risk-sensitive returns across the entire fund family, outstanding success, such as the once $60 million AUM firm touched the $36 billion mark, and enormous professional respect as the country’s premier Asian investing specialist with a robust internal culture and deep bench.
The Matthews Asia of 2025 feels a long way from that success.
Assets have plummeted Continue reading →
Many and many a year ago, in the kingdom of ABC, Woody Allen was one of my very first guests. And we consented to take questions from an eager audience of mostly young people. Like ourselves.
The questioner looked like a high school girl and shouted to Woody from the balcony, “Do you think sex is dirty?”
Allen: “It is if you do it right.” (Dick Cavett, “As the comics say, These kids today! I tell ya.” New York Times, 9/13/2013)
I’d rather hoped that the observation originated with someone rather more wholesome, Groucho Marx or Mae West, for example, but we’re stuck with Continue reading →
On June 18, 2025, Stewart Investors, an active, long-only global equity specialist with $16.5 billion in assets under management, launched the Stewart Investors Worldwide Leaders fund (SWWLX) with an initial investment from a U.S. foundation. SWWLX is the firm’s first fund available to regular US investors.
Stewart is Edinburgh-based and describes themselves this way: “We are a small team of passionate investors managing, on behalf of our clients, investment portfolios with a focus Continue reading →
THIS IS AN UPDATE OF THE FUND PROFILES published in 2009 and 2013.
The fund seeks long-term capital appreciation by investing in a diversified portfolio of very, very small North American companies.
Aegis believes excess returns can be generated by:
Welcome to the June issue of the Mutual Fund Observer!
It’s a grand month, whose start was marked by the 165th commencement ceremony celebrating Augustana’s graduates. The college was born in 1860, an expression of longing and ambition. Swedish immigrants in the Midwest – and there were a lot of them – wanted to provide their children with a better life, which, to them, meant a good education. At the same time, they didn’t want their children to forget their homeland and its proud traditions.
So, they made a college. Modeled after the great universities in northern Europe, Augustana became an expression of faith: in the welcome that America gave its new citizens, in the country’s endless promise, in the power of education, Continue reading →
It was a great and horrifying story about two young boys and the arrival of the Cooger and Dark Carnival in Green Town, Illinois. If you entered the carnival grounds late at night, you might be drawn to its iconic ride, Cooger & Dark’s Pandemonium Shadow Show. It’s a story about the ways in which evil can be a powerful temptation to even the best of Continue reading →
Dear friends,
Welcome to May, traditionally, the month in which to sell in!
These first few weeks of May are an odd time on campus. My seniors are scrambling for jobs (or antidepressants), the juniors are teeing up internships, and the youngsters are … well, mostly wondering what just happened to Continue reading →
In December 2024, we forecast chaotic markets. Even if you were broadly supportive of Mr. Trump’s policy direction, the fact remains that he has announced, altered, suspended, or cancelled tariffs more than 28 times in 2025, including pausing some tariffs within 24 hours of announcing that the suggestion he might pause tariffs was “fake news.” His desire to reduce federal spending was manifested in the decision to turn Elon Musk loose to ransack the government in search of a promised $1 trillion in savings. Bloomberg’s assessment: “100 days of DOGE: lots of chaos, not so much efficiency.” Continue reading →
On March 26, 2025, T Rowe Price launched T Rowe Price Capital Appreciation Premium Income ETF (TCAL), the latest addition to its capital appreciation suite of funds and ETFs. The fund is managed by a six-person team with David Giroux in the lead. It posts an expense ratio of 0.34%.
The fund’s unique niche within the Capital Appreciation suite is its focus on “regular” income payouts. It will normally invest in equities with a covered call options strategy overlay. The equities will be Continue reading →
The managers aspire to outperform the S&P 500 over meaningful time periods, while managing risk by blending non-correlated assets such as a discretionary global macro strategy with a portfolio of US equities. The portfolio has two components: a US equity component, which is executed by buying low-cost ETFs, and a macro-driven Futures Trading Strategy. Through rebalancing between these approaches, they hope to harness divergent performance drivers to create what they term “Dynamic Alpha.” The equity strategy divides its investments between growth, high-dividend, and broad market stocks. The Future Trading Strategy, executed by a trading adviser, provides exposure to over Continue reading →
Friend Lewis Braham, writing in Barron’s, offered “The Chaos-Resistant Fund Portfolio” on April 7, 2025. For those who have not seen Lewis’s essay, here’s a recap. He begins with a fairly stark warning that parallels ours:
Voters elected Trump specifically as a populist disrupter. He’s doing what they asked. While Democrats call Trump an autocrat for consolidating power in the executive branch, that’s largely irrelevant to Wall Street, as money managers have happily invested billions in authoritarian or quasi-authoritarian regimes … The problem now is Continue reading →
Welcome to the April Mutual Fund Observer!
My mom used to say, “March sometimes comes in like a lion.” She never added, “and then it eats you.”
March, named for the God of War, strikes me for two reasons. First, it is the month that has encompassed a whole series of catastrophes in the financial markets and Continue reading →
AI has a presence in almost every aspect of modern life, from summarizing buyer responses on Amazon to working with radiologists to discover incipient tumors on scans. Few industries have been as anxiously vigilant on the subject as investment management. Increasingly, managers are relying on AI to do part of their work and, increasingly, they wonder if it could eventually replace them entirely. (Spoiler: quite possibly.)
Artificial intelligence (AI) has Continue reading →
“Put your trust in God, my boys, and keep your powder dry!”
Advice attributed to Oliver Cromwell, in the poem “Oliver’s Advice” (1834)
Here are three simple truths Continue reading →
