Author Archives: David Snowball

About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles. David lives in Davenport, Iowa, and spends an amazing amount of time ferrying his son, Will, to baseball tryouts, baseball lessons, baseball practices, baseball games … and social gatherings with young ladies who seem unnervingly interested in him.

July 1, 2018

By David Snowball

Dear friends,

Welcome to July! You shouldn’t be here.

Welcome to the Observer’s annual “summer light” issue in which you point out the obvious: you need some time away from the headlines, the daily howling, the apocalypse, the partisan glee, the certainty of boom, doom or gloom (to borrow from the name of Marc Faber’s thoughtful reports).

Setting aside the overtly political headlines, here’s a Continue reading →

LS Opportunity Fund (LSOFX)

By David Snowball

Objective and strategy

LS Opportunity Fund pursues three goals: preserving capital, delivering above-market returns and managing volatility. “The secret,” says manager John Gillespie, “is to avoid large losses.” They invest, both long and short, in individual stocks; they do not short “the market,” they don’t use esoteric options and they don’t typically use ETFs. They normally will have 20-40 short positions and 50-70 long ones. The long portfolio is both all-cap and value-oriented, both of which are fairly rare. The short portfolio targets Continue reading →

Funds in Registration

By David Snowball

VanEck has registered a launch a video-gaming and e-sports ETF, which strikes me as silly in the extreme but at least doesn’t include cryptocurrencies. “Silly in the extreme” means we’re not saying anything more about it. Happily, a bunch of really solid offerings – a new Litman Gregory, a bond fund run by ex-PIMCO guys, an emerging markets offering from LSV and the ETF version of several four-star funds – were filed at the same time. All of these funds and active ETFs are likely available by the end of September. Continue reading →

Briefly Noted

By David Snowball

All the developments that are worth knowing but aren’t worth separate stories, including 50 funds that just earned headstones rather than headlines. An absolute disaster? 10% of vanishing funds promising “absolute returns.” Wells Fargo promises that you can trust them, just before announcing millions of additional fines. Tadas moves up, a favorite fund closes quick and hard, Monrad celebrates his 58th and the Mathers Fund leaves this veil of tears after 53 eventful years. Continue reading →

… a snippet from a propaganda lecture

By David Snowball

The phenomenon of carefully, continuously engineered noise and distraction is neither new nor benign. Each year for the past quarter century, I’ve ended the last lecture of my Propaganda in the 20th Century course with a reading from Milton Mayer, They Thought They Were Free: The Germans, 1933-45 (University of Chicago Press, 1955).

Mayer, an American political scientist, traveled to Germany in the early 1950s to speak with German Nazis. He was dissatisfied by the existing analyses of how Nazism came to be, and hoped that intimate interviews with ten Germans who became Nazis might help him come to understand.

This excerpt comes from Chapter 13, a discussion by a university professor.

“What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could understand it, it could not be released because of national security. And their sense of identification with Hitler, their trust in him, made it easier to widen this gap and reassured those who would otherwise have worried about it.

“This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter. . .

“The dictatorship, and the whole process of its coming into being was, above all diverting. It provided an excuse not to think for people who did not want to think anyway. I do not speak of your ‘little men,’ your baker and so on; I speak of my colleagues and myself, learned men, mind you. Most of us did not want to think about fundamental things and never had. There was no need to. Nazism gave us some dreadful, fundamental things to think about — we were decent people – and kept us so busy with continuous changes and ‘crises’ and so fascinated, yes, fascinated, by the machinations of ‘national enemies,’ without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us. Unconsciously, I suppose, we were grateful. Who wants to think?

“To live in the process is absolutely not to be able to notice it – please try to believe me – unless one has a much greater degree of political awareness, acuity, than most of us had ever had occasion to develop. Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning, unless one understood what the whole thing was in principle, what all these ‘little measures’ that no ‘patriotic German’ could resent must some day lead to, one no more saw it developing from day to day than a farmer sees the corn growing. One day it is over his head. . .”

My students and I talk about the prospect that “bad stuff” – policies and the propaganda or media strategies that enable them – don’t just appear. They grow; they grow within us, fed by our uncertainty, tolerance and exhaustion. The essential tool, I argue, for confronting great injustice is to recognize and reject daily injustice: don’t tolerate demeaning comments, even when – perhaps especially when – they’re made by your friends. Don’t ignore the stranger in need. Don’t go for the cheap laugh. Don’t shake your heads and just walk away. Do today the things that will make you, fifty years hence, look back on with pride. Do today the things that will give you a decent answer to your child’s someday question, “oh, no! Well, what did you do about it, dad?”

Centaur Total Return Fund (TILDX), June 2018

By David Snowball


The fund seeks “maximum total return” through a combination of capital appreciation and income. The fund invests in undervalued securities, mostly mid- to large-cap dividend paying stocks. The manager has the option of investing in REITs, master limited partnerships, royalty trusts, preferred shares, convertibles, bonds and cash. The manager invests in companies “that he understands well.” The manager also generates income by selling covered calls on some of his stocks. As of February 28, 2018, the fund held 21 different investments, which Continue reading →

No country for old men

By David Snowball

With a summertime nod to William Butler Yeats, “Sailing to Byzantium,” and not so much to the movie that cribbed a line from him.


That is no country for old men. The young
In one another’s arms, birds in the trees,
—Those dying generations—at their song,
The salmon-falls, the mackerel-crowded seas,
Fish, flesh, or fowl, commend all summer long
Whatever is begotten, born, and dies.
Caught in that sensual music all neglect
Monuments of unageing intellect. Continue reading →

If you were a manager, you’d be running a managed futures fund

By David Snowball

You may not know it. You may not want to admit it. But you’d certainly be running one.

How do I know? Because managed futures funds operate exactly the way you do. Managed futures funds are momentum investors; they choose some number of asset classes (US stocks, currencies, EM bonds, commodities, whatever) to include in their portfolios. They then invest in the asset classes that show the greatest upward momentum, avoid assets that are drifting, and short those that are falling. You could also imagine a control panel with eight toggle switches, one for each asset class, and three positions for each switch (positive, neutral, negative). Managers look at relative strength data and might flip Continue reading →

Morningstar Minute

By David Snowball

The Mutual Fund Observer is the product of a virtual team and, when our colleagues from England and Trinidad were working with us, a virtual global team. Chip and I reside in Iowa, Ed and Sam in Illinois, Charles in California, Bob C in Ohio and Dennis in Montana. One of the great attractions of the Morningstar conference is that it gives us a chance to work side-by-side on interviews and stories, and to share quick and personal reactions to the ideas and personalities we encounter.

As ever, we’ll try to offer some quick responses in the form of end-of-day posts to Continue reading →

To the shareholders of Quaker Event Arbitrage Fund: open your danged mail!

By David Snowball

Quaker Funds, based in Berwyn PA, are a small family at tactical allocation funds. As they imagine a transition which will include an ESG focus, it became clear that Thomas Kirchner’s event-driven fund would be something of an anomaly. Event arbitrage funds aim to profit from predictable but short-lived market anomalies when, for example, a firm announces a change of control or reorganization. Limiting himself to relatively rare events in a relatively limited slice of the equity universe makes very little sense, so QEAAX/QEAIX is trying to join the Continue reading →

Update on MFO Premium

By David Snowball

Charles sends his regrets for being unable to join us this issue, but he’s retreated deep underground to the MFO Premium command center.

At Charles’s request, the good folks at Thomson Reuters have substantially (vastly, enormously) expanded the amount of data they provide each month. The new datafeed will not only allow MFO Premium users to access a new level of detail about the composition and performance of mutual funds and ETFs, but it will also allow us to expand our coverage to closed-end funds and insurance products. Continue reading →

Elevator Talk: Alan Norton, Crow Point Growth Fund (GAMIX)

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.

There’s something almost Biblical about this Continue reading →

Funds in Registration

By David Snowball

Lately, new fund and active ETF launches have been rare – only seven new retail funds launched in the first five months of 2018 – and occasionally silly. Last month saw a registration filing for an active “pet parents” fund; this month saw a filing for a passive “pet care” ETF. You need neither (and should avoid both), so we’ll say no more about them. While this is a slow month for new fund registrations, at least it’s not a silly one. In the main, these funds will be available for purchase by August 1.

Adler Value Fund

Adler Value Fund, will seek Continue reading →

Briefly Noted

By David Snowball


In October 2016, Dennis Baran profiled City National Rochdale Emerging Markets (RIMIX/CNRYX). His bottom line on the fund,

CNRYX offers an investor exposure to emerging markets by its concentrated strategy in Asia. Since inception, the fund has adhered to its six-country Asian allocation and not included other EM Asian countries or EM countries outside of that region in any meaningful way. The manager believes that the long-term positives of the region discussed here can become a virtuous cycle that could last for decades and lead to fund outperformance. The results thus far support that thesis: the fund has earned a five-star designation from Morningstar, is ranked highest by Lipper in total return, consistent return, tax efficiency, expense, and is a MFO Great Owl.

Continue reading →

May 1, 2018

By David Snowball

Dear friends,

If you’re ever had cause to poke around MFO, perhaps “About Us” or “Support Us,” you’ll have spotted the younger me and the younger version of my son, Will. We were poking around England seven years ago, around the time we launched MFO, and we wanted to give folks a peek at the people behind the text. Continue reading →

New York AG forces fund companies out of the indexing closet

By David Snowball

(with special thanks to rforno of MFO’s Discussion Board for the title)

The New York State Attorney General’s office has weighed-in on behalf of investors, and active share. Active share is a measure of the extent of the difference between what’s in fund’s portfolio and what’s in the fund’s benchmark index. If your fund holds all the same stocks in all the same percentage as its benchmark, then its active share is zero. A zero active share is good if you’ve bought – and are being charged for – an index fund. A zero active share is bad is you were sold – and are being charged for – something masquerading Continue reading →

The Morningstar Minute

By David Snowball

Morningstar’s plan to roll out their own family of mutual funds, for use with their managed portfolio service, is becoming more concrete. In an April 23, 2018 filing with the SEC, Morningstar notes that they’re in “the quiet period” required by the SEC; nonetheless their filing says a lot.

Morningstar will offer nine funds to their Morningstar Managed Portfolio clients. That’s a booming Continue reading →