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 →
On March 26, 2025, the GlacierShares Nasdaq Iceland ETF was launched. The ETF tracks the MarketVector Iceland Global Index. The Index tracks both Icelandic companies (54.5% of the index) and companies in other Nordic nations that have a substantial footprint in Iceland (13% Luxembourg, 11% Norway, 7% Switzerland … followed by the US and the Faroe Islands, about equally weighted). Iceland’s economy is heavily dependent on just a handful of industries: energy production, tourism, fishing, and smelting aluminum. (Smelt and smelting?)
The market cap of Iceland’s two stock exchanges, the main exchange and the small/midcap exchange, comes to Continue reading →
Dear friends,
Welcome to the March issue of Mutual Fund Observer.
I am surprised, sometimes, at how much I now appreciate some of the stuff that I found most mindless and annoying in high school. (I’m still not there with Moby Dick; the whole idea of a monomaniacally obsessed old guy leading his Continue reading →
“We believe the pre-end period will be filled with unprecedented opportunities for profit.” — New Yorker cartoon
When we published “Not Built for This: The Argument for Infrastructure Investing in an Unstable Climate” in January 2025, our thesis was straightforward: climate destabilization would drive urgent, massive infrastructure spending as aging systems fail under environmental pressures they were never designed to withstand. Just two months later, this argument has been dramatically reinforced—not despite, but because of aggressive federal climate policy rollbacks. The New York Times offered this assessment on Continue reading →
Investors are increasingly skittish. They are warned frequently that the top of the US equity market is feverishly overpriced and might bring the rest down when it falls. And, too, chaos in the national government is making them worried if not yet ready to abandon their lovelies. Interest is growing in finding ways to book gains independent of the stock market. One manifestation of that is the insane growth in economically inefficient buffered funds, and another is the rising interest in securing access to private equity. “Private equity” describes the wide world of corporations whose shares are Continue reading →
In the investment world, there’s an old saying: “There’s no such thing as a free lunch.” Yet the latest crop of exchange-traded funds (ETFs) offering both daily liquidity and exposure to illiquid assets might seem to promise just that—a financial equivalent of eating decadent cheesecake without gaining an ounce. Continue reading →
Dear friends,
Planting trees is a venture into the future, it is a hand held out to other generations.
Mirabel Osler
As I sit down to write this month’s letter, I’ve been wandering around my garden thinking what an unsalvageable mess it is: an unlovely and unidentifiable tangle of dead stems, fall leaves, stubble, trash mysteriously blown in, and the occasional corpse. (Typically avian.) It’s hard not to despair of it. And, hard not to imagine parallels to Continue reading →
A tradition dating back to the days of FundAlarm was to annually share our portfolios, and reflections on them, with you. My portfolio, indolent in design and execution, makes for fearfully dull reading. That is its primary charm.
This is not a “here’s what you should own” exercise, much less an “envy me!” one. Instead, it’s a “here’s how I think. Perhaps it will help you do likewise?” exercise. Continue reading →
Every day, Americans rely on 2.2 million miles of aging water pipes, some laid before the Civil War, to deliver life’s most essential resource. This vast network is crumbling beneath our feet, requiring over $2 trillion in repairs and upgrades by 2043. Yet this infrastructure crisis isn’t just about fixing what’s broken – it’s about building for a future where three-quarters of Earth’s land masses are becoming permanently drier and extreme weather events are the new normal.
For investors, this convergence of urgent infrastructure needs and climate adaptation creates Continue reading →
Dear friends,
Welcome to the January issue of Mutual Fund Observer.
January was named after Janus, the tutelary deity of the year’s first month. As tutelary, he was guardian, patron, and protector. Absent from the Greek pantheon, Janus was the Roman god of beginnings, transitions, and endings. It was the “transitions” part that led Romans to place the two-faced god near entries and passageways, where he oversaw their comings and Continue reading →
There’s a famous New Yorker cartoon that we don’t have permission to reproduce. It shows a cheerful executive speaking from a lectern in a conference room.
And so, while the end-of-the-world scenario will be rife with unimaginable horrors, we believe that the pre-end period will be filled with unprecedented opportunities for profit!
Welcome to the case for infrastructure investing in Continue reading →
On October 14, 2024, Virtus Investment Partners launched Virtus KAR Mid-Cap ETF (KMID). It targets “U.S. mid-cap companies with durable competitive advantages, excellent management, lower financial risk, and strong growth trajectories” selling at “attractive” valuations. The fund is managed by Jon Christensen and Craig Stone who also manage the five-star, $2.9 billion Virtus KAR Mid-Cap Core Fund. The ETF, like its sibling, will hold 25-35 stocks with a Continue reading →
The ETF end of the investment industry continues to be shaped by the mutual fund end. Jeff Benjamin at ETF.com reports “The mutual fund industry is setting new records for ETF conversions in 2024. According to Morningstar, there have been 55 ETF conversions this year through Dec. 17, which compares to 35 last year and 20 in 2022. The majority of the conversions this year have been in the fixed income space…” (“Mutual Funds Convert to ETFs at Record Levels,” ETF.com, 12/19/2024). The hottest trend has been the conversion of actively Continue reading →
