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.

Launch Alert: AlphaCentric Real Income Fund

By David Snowball

On November 1, 2024, the former AlphaCentric Strategic Income Fund was rebranded as AlphaCentric Real Income Fund with a new sub-advisor, broader strategy, and new expense ratio to accompany its new name.

CrossingBridge Advisors will manage the investment strategy by employing a team approach.  Portfolio managers are T. Kirk Whitney, CFA, who joined the firm as an analyst in 2013, Spencer Rolfe, who first joined in 2017, and David Sherman, CIO. CrossingBridge, with over $3.2 billion in assets as of 8/31/24 was Continue reading →

Launch Alert: Bridgeway Global Opportunities Fund

By David Snowball

On October 15, 2024, Bridgeway Capital launched Bridgeway Global Opportunities Fund (BRGOX), a long/short equity fund that will pursue long-term positive absolute returns while limiting exposure to general stock market risk. Using advanced quantitative modeling, the fund will hold 250-300 long positions and 250-300 short positions. The portfolio is designed with a bias toward quality, value, and sentiment. It will otherwise be neutral as to country, size, sector, and beta. That is, it will shoot for a beta of zero, a net China exposure of zero, and so on.

The fund will be managed by a Bridgeway team led by Co-Chief Investment Officer Jacob Pozharny, PhD.  He joined Continue reading →

October 1, 2024

By David Snowball

Dear friends,

Welcome to the Samhain / the coming of the dark edition of the Mutual Fund Observer!

October is an interesting month. Traditionally perilous for the financial markets. It begins with the sullen remnants of summer and ends with festivals of the harvest (even for those of us in cities) and of the coming season when nature slips into dormancy. Halloween, whose sales now begin in August and whose iconic ghouls now Continue reading →

Launch Alert: CrossingBridge Nordic High Income Bond Fund

By David Snowball

On October 1, 2024, CrossingBridge Advisors launched CrossingBridge Nordic High Income Bond Fund (NRDCX). The fund will invest in high-income bonds issued, originated, or underwritten out of Denmark, Finland, Norway, and Sweden. Those might be fixed or floating rate bonds, zero-coupon bonds and convertible bonds, and bonds issued by corporations and governments. It will be solely managed by CrossingBridge Advisors.

The managers will seek high current income, and the prospect of some capital growth, within the Nordic bond universe. Within that space, they operate with few externally imposed constraints beyond Continue reading →

September 1, 2024

By David Snowball

Dear friends,

Welcome to the September (aka “back to school”) issue of the Mutual Fund Observer. The joyful tumult of which has slightly delayed our launch.

Despair is easy. If you ever want an antidote, drop by Augie at the beginning of September. As many of you know, in my day job, I am a professor of communication studies and director of the Austin E Knowlton Honors Program at Augustana College. I am also an advisor to first-year students. I’ve spent much of the last week meeting with and learning about my new charges. I am amazed by them, defying as they do all of the hysterical media headlines about Continue reading →

The Young Investor’s Indolent Portfolio

By David Snowball

An indolent portfolio is an investor’s best friend. It is a portfolio designed to be ignored for a year at a time. Why is that a good idea? Two reasons, really. First, almost everything you do with your portfolio will be a mistake. Morningstar’s long-running series of “Mind the Gap” studies looks at the difference between investor’s actual returns and the returns of the funds in which they are invested.

Those annuals routinely show that investors’ returns Continue reading →

Launch Alert: Research Affiliates Deletions ETF (NIXT)

By David Snowball

On September 10, 2024, Research Affiliates will launch its first ETF. Research Affiliates was founded in 2002 by Rob Arnott to provide professional and institutional investors with innovative research and product development. Mr. Arnott is iconic, having published 150 or so research articles that received both attention and rewards. His most extensive work is The Fundamental Index: A Better Way to Invest (2008). Most traditional indexes are capitalization-weighted, so they lock in a large/growth/momentum bias. Arnott notes that the bias may Continue reading →

August 1, 2024

By David Snowball

“It’s a sure sign of summer if the chair gets up when you do.” Walter Winchell

Walter who?  O tempora! O mores!  

At the height of his popularity, in the late 1930s, 50 million people—two-thirds of American adults—read Winchell’s syndicated column and listened to his 15-minute Sunday-night radio broadcast. He positioned himself as a champion of “Mr. and Mrs. America,” and was the most powerful – or, at least, most Continue reading →

Small Cap Funds: Better than the best

By David Snowball

In July 2024, Morningstar.com published a promising but ultimately disappointing article entitled “The Best Small-Cap Funds” (7/18/2024). “Content development editor” Tori Brovet has been publishing a series of “The Best” articles (Energy Stocks, Value Funds, Bond ETFs). The article promises there are

They aren’t.

You can do Continue reading →

Launch Alert: Otter Creek Focus Strategy ETF

By David Snowball

On May 17, 2024, Otter Creek Advisors launched the Otter Creek Focus Strategy ETF (OCFS). In doing so, they are providing an existing separately managed account strategy which launched on May 29, 2020, as an ETF. Otter Creek was founded in 1991 to manage a long/short hedge fund and, in 2013, launched a long/short mutual fund. That four-star fund Continue reading →

Launch Alert: WPG Partners Select Hedged Fund

By David Snowball

I love a good mystery. WPG Partners Select Hedged is one. It is live, tracked by Morningstar, and available through Schwab, but appears on neither the Boston Partners nor WPG websites. Here’s what to know.

On May 31, 2024, Boston Partners launched WPG Partners Select Hedged, a long/short small-cap fund from its WPG Partners subsidiary. Boston Partners manages Continue reading →

Launch Alert: T. Rowe Price Intermediate Municipal Income ETF

By David Snowball

On July 10, 2024 – T. Rowe Price launched T. Rowe Price Intermediate Municipal Income ETF (TAXE), an actively managed ETF. Price has 16 other ETFs, including semi-transparent and transparent equity and income funds but this is the first that does not directly mirror an existing fund.

The fund is co-managed by James Lynch and Charlie Hill, who collectively have 53 years of investment experience, and have served Continue reading →

July 1, 2024

By David Snowball

Dear friends,

Welcome to Really, Really Summer … and to the July issue of Mutual Fund Observer.

Summertime is an especially blessed and cursed interval for those of us who teach. On the one hand, we’re mostly freed from the day-to-day obligation to be in the classroom. Some of us write, some travel, and some undertake “such other duties as may from time to time be assigned” by our colleges. On the other hand, we hear the clock ticking. All year long, as we try to face down a stack of 32 variably literate essays at 11 p.m. Sunday night, we think “If I can just make it to summer, I’ll Continue reading →

Families you can trust

By David Snowball

Fund families that get it right, over and over

Briefly brilliant performance isn’t all the tough. It requires rather more luck the skill and it can be wildly profitable for the adviser, though deadly for the investors. ARK Innovation ETF is, of course, the current poster child for boom-then-bust. The fund posted triple-digit returns in 2020, saw its assets explode then promptly (and predictably) crashed. Anyone who bought five years ago and has devoutly held on has lost 1% annually and has trailed 99.9% of all similar investors. Those who bought at the peak three years ago have clocked annual Continue reading →

Firms with 100% 10-year Success Rates

By David Snowball

Firms with 100% 5- and 10-Year Success Ratios

No liquidations, no mergers, and 100% of funds posted above-average returns. Of the 68 firms with a 100% 10-year success rate, 41 also have a perfect five-year record.

  Firm Success Ratio 10-Year Firm Success Ratio 5-Year # of funds
Appleseed 100 100 1
Auer 100 100 1
Bretton Fund 100 100 1
Caldwell & Orkin 100 100 1
Cantor Fitzgerald 100 100 2
Changing Parameters 100 100 1
Channel Investment Partners 100 100 1
Clark Fork 100 100 1
Cook & Bynum Capital 100 100 1
Disciplined Growth Investors (DGI) 100 100 1
Dodge & Cox 100 100 6
Equity Investment 100 100 1
First Foundation 100 100 2
Freedom 100 100 1
Hamlin Capital Management 100 100 1
Hillman 100 100 1
Hood River Capital Management 100 100 1
Investment House 100 100 1
Ironclad Funds 100 100 1
Kopernik 100 100 2
Lyrical Partners 100 100 1
MainGate Funds 100 100 1
Matisse Funds 100 100 1
Meehan Focus 100 100 1
Moncapfund 100 100 1
Needham 100 100 3
New Alternatives 100 100 1
OCM 100 100 1
Otter Creek 100 100 1
Payson 100 100 1
Performance Trust Asset Management 100 100 3
Port Street Investments 100 100 1
Private Capital Management 100 100 1
Seafarer 100 100 1
Smead 100 100 2
Sound Shore 100 100 1
Sparrow 100 100 1
Stringer Asset Management 100 100 1
Teberg 100 100 1
Terra Firma Asset Management 100 100 1
Vericimetry 100 100 1

Firms with 100% 10-year success rates, but slippage over the past five years

Inevitably some of the 10-year winners have tailed off more recently. It’s reassuring that only 17 of 68 funds (25%) have tailed off badly, with fewer than half of their 10-year funds still thriving.

  Firm Success Ratio 10-Year Firm Success Ratio 5-Year
Fuller & Thaler 100 83
WCM Investment Management 100 75
Bridge Builder 100 75
Grandeur Peak 100 71
Trillium 100 50
Prospector 100 50
Medalist Partner 100 50
Jensen 100 50
Campbell & Company 100 33
Oakhurst 100 25
Swan Wealth Advisors 100 20
YCG FUNDS 100 0
Reaves 100 0
Polen Capital 100 0
Polaris Capital Management 100 0
MP 63 100 0
MAI 100 0
Long Short 100 0
Lisanti Capital Growth 100 0
JAG Capital Management 100 0
EIP Funds 100 0
Edgewood 100 0
Copley 100 0
Conestoga 100 0
Clifford Capital 100 0
BBW Capital 100 0
Akre 100 0

 

The Most Consistent Winners, 2013-2024

By David Snowball

Our colleague Devesh Shah has been in search of a reason to have any direct international exposure. That is, for an answer to the question, “Why should I invest one cent in an international equity fund?” He notes that the default for many endowment portfolios is 18% international, but that – over the course of the 21st century so far – the actual efficient frontier portfolio held only 5% international equity.

International stocks are 40% of the total global capitalization. They are Continue reading →

June 1, 2024

By David Snowball

Dear friends,

It’s been a whirlwind month for us. In just about 30 days, I got married (waves to Chip!), finished my 68th trip around the big ball o’ fire in the sky, bade farewell to my 40th group of seniors (just a heads up, world. They’re coming for you!), visited with the managers from FPA (really, if you put Mr. Scruggs in a cardigan he’d totally rock the Mr. Rogers’ look), watched the Dow hit 40,000 and visited my brothers and sisters in Pittsburgh for the first time in two years.

Continue reading →

To Augustana’s class of 2024: money is not your master

By David Snowball

Hi, guys.

You made it. You survived Covid and being kicked off campus midway through spring of your freshman year. You survived a year of Zoom. You survived that weird casserole the dining commons kept serving. You survived me. And, at the end of it, you were standing together, laughing and glowing. We’re incredibly proud of you and hopeful for the good you can do in the world.

I’ve never aspired to deliver a “last lecture” for graduates, but you might consider Continue reading →

FPA Queens Road Small Cap Value (QRSVX)

By David Snowball

Objective and strategy

The fund seeks capital appreciation by investing in the stocks or preferred shares of U.S. small-cap companies. The manager pursues a sort of “quality value” strategy: he seeks high-quality firms (strong balance sheets and strong management teams) whose stocks are undervalued (based, initially, on price/earnings and price-to-cash flow metrics). Because it is willing to hold companies as their market cap rises, the portfolio has about 9% invested in mid-cap stocks that it bought when they were small caps.

In general the portfolio holds Continue reading →