Welcome to our annual summer-lite edition of Mutual Fund Observer.
It’s the summer in which things might be … hmmm, a little lighter than usual. It’s normally a time when we quiet down for a month while you folks are off doing sensible and wonderful things, like hanging out at the beach with friends and family. Except, now, well … Continue reading →
Jimmy, Freddy the magic flute and Mayor Pufnstuf (right).
H.R. Pufnstuf was the answer to the question, “Who’s your friend when things get rough?” Pufnstuf starred in a Sid and Marty Krofft cult classic TV show which debuted during “the summer of love” in 1969 and continued in reruns as late as 1999. The show’s theme song assured us that Pufnstuff, Mayor of The Living Island, was “your friend when things got rough” because “he knew just what Continue reading →
In the spring of 2019, MFO ran a two-part series on the investment implications of climate change: The Investor’s Guide to the End of the World and The Investors Guide to the End of the World, Part 2: Concrete advice. The former laid out the scientific consensus behind the human role in climate change and explained the four ways in which even the broad perception of climate change would affect your portfolio through a combination of physical, biological, regulatory, and reputational risks. We finished with three investment strategies (divest, invest, innovate) and two fund recommendations: Brown Advisory Sustainable Growth Fund (BIAWX) and Green Century Balanced (GCBLX). Since then, Brown returned 27% (versus 7% for its peers) and Green Century made 8.8% (versus 4% for its peers).
Our second article reviewed the investing recommendations of Continue reading →
Value investing – the simple notion that it’s not a good idea to overpay for the stuff you buy – makes enormous intuitive sense. Two indisputable facts about value investors: Continue reading →
At the time of publication, this fund was named Queens Road Small Cap Value.
The fund seeks capital appreciation by investing in the stocks or preferred shares of U.S. small-cap companies. Small caps are companies whose stocks are, at the time of purchase, valued at under $5 billion. 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 on estimates of intrinsic value using free cash flow and book value growth models.).
In general, the portfolio holds Continue reading →
On July 21, 2020, Ziegler Capital Management launched the Ziegler Piermont Small Cap Value Fund (ZPSVX). The fund invests primarily in undervalued, domestic small-cap stocks. The fund is managed by the five-person Piermont Group, led by John Russon.
What do they do?
The fund is the newest manifestation of a Continue reading →
The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. We found 17 active funds and ETFs in registration, some quite notable. Expect them to launch by the end of September 2020. All but two of those funds are either conservative income funds or hedged alternative funds.
The key additions are a growing number of low-cost ESG options, across a range of asset classes. We do not cover passively-managed ETFs, but fans of Continue reading →
We pause a moment to commemorate the lives and mourn the passing of two fund managers this month.
Dowe Bynum
(1978-2020), half of the team of Cook & Bynum, passed away on Friday, July 17, 2020, at peace and surrounded by loved ones. Dowe, who eschewed his given first Continue reading →
Dear friends,
Welcome to the summer of our discontent.
I admit to being a bit distracted this month. My son, Will, was exposed last week to an individual who subsequently tested posted for the coronavirus. Neither she nor he was… uh, optimally cautious during their interaction and she’s subsequently fallen ill. We promptly sought a test from the State of Iowa’s preferred provider, only to learn that they couldn’t see him for four days and weren’t sure how quickly they’d have results. We turned, instead, to our local hospital which administered the test immediately, promising the results “in two to three days.” Four days later, we’ve been told that actually means Continue reading →
The fund seeks “strong long-term risk adjusted returns.” The managers may employ a wide variety of strategies in pursuit of gains that are independent of the movement of the global stock and bond markets.
T. Rowe Price. Founded in 1937 by Thomas Rowe Price and Continue reading →
On May 1, 2020, Driehaus Capital Management launched Driehaus Small/Mid Cap Growth Fund (DSMDX).
The Fund is managed by Jeff James and Michael Buck, along with assistant portfolio manager Prakash Vijayan. The fund uses the same strategy used since 2012 for Driehaus Small/Mid Cap Growth separately managed account clients. Messrs. James, Buck, and Vijayan also Continue reading →
At the time of publication, this fund was named Queens Road Value.
The fund seeks capital appreciation by investing in the stocks or preferred shares of U.S. companies. They look for companies with strong balance sheets and experienced management, and stocks selling at discounted price/earnings and price-to-cash flow ratios. It used to be called Queens Road Large Cap Value but changed its name to widen the range of allowable investments. Nonetheless, it continues to put Continue reading →
The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. We found 17 active funds and ETFs in registration, some quite notable. Expect them to launch by the end of September 2020.
The key additions are the three DFA active ETFs, which mimic three DFA funds. DFA, for better or worse, has long marketed its exclusivity. Dimensional Fund Advisors was Continue reading →
Effective on October 1, 2020, all of the Alpha Architect funds will transition from index funds to actively-managed ones, though the change will likely be undetectable to investors since “the adviser’s methodology will be substantially unchanged from the current approach it uses.” The funds in question are
On June 30, Trillium Asset Management was Continue reading →
Dear friends,
Welcome to summer.
All of us hope that it’s not going to be a long, hot one.
Some months it’s easy to write a welcome note, some months not. This is one of those latter times. Over the night just passed there were ongoing instances of “civil unrest” (the police chief’s term) with a caravan of 100 cars proceeding from one shopping plaza to the next. Four people – including a police officer simply driving his car – were shot; two, not including the officer, died. Many of the caravanning cars bore Minnesota plates. That followed a Continue reading →
On May 15, 2020, an unassuming filing with revolutionary potential appeared in the Securities and Exchange Commission’s EDGAR database. It was an N-1A, initial prospectus, filing for two ETFs: SmartETFs Dividend Builder ETF and SmartETFs Asia Pacific Dividend Builder ETF. Both unremarkably offered “to provide investors with dividend income and long-term capital growth.”
The real news appeared on Continue reading →
On May 27, 2020, ClearBridge Investments launched ClearBridge Focus Value ETF (CFCV), one of the first active, non-transparent ETFs launched under the so-called Precidian protocol.
Precidian Investments, like ClearBridge, is an affiliate of Legg Mason. Legg paid $25 million in January 2020 to acquire the majority ownership of Precidian. It had been a minority owner since 2016. Precidian received approval from the SEC for a process that allows fund managers to evade the traditional ETF rule requiring constant, real-time portfolio transparency. Precidian now licenses its “technologies” to other advisers, allowing them to offer active funds with limited portfolio visibility.
ClearBridge Investments, a 50-year-old firm, manages $120 billion in assets. It merged in 2013 with Legg Mason Capital Management. Each of Legg’s nine affiliates managers – including Royce and Brandywine – maintains its investment autonomy while Legg handles marketing and distribution.
Sometime in the third quarter of 2020, Franklin Resources will complete Continue reading →
On April 15, 2020, Jensen Investment Management launched the Jensen Global Quality Growth Fund (JGQSX). This new fund is a global version of Jensen Quality Growth: the same discipline, same managers. Jensen Quality Growth Fund (JENSX) is, at least from the perspective of those who look at long-term accomplishments, one of the best domestic large-cap core funds in existence.
What do they do? Continue reading →
The fund is trying to grow capital, with the particular goal of beating the MSCI All Country World Index over the long term while maintaining an emphasis on capital preservation. The fund allocates assets between stocks (10-90%), fixed-income securities (10-90%), and cash depending on market conditions. The equity portion of the portfolio is invested in stocks of firms that they designate as “knowledge leaders.” Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge, or a unique distribution mechanism. Knowledge Leaders are largely Continue reading →
The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. Most funds currently in registration are in a scramble to launch by June 30th with the hope that having a “standard reporting period” to share with investors sooner. In a remarkable surge, we found 31 active funds and ETFs in registration, some quite notable. Expect them to launch by the end of July 2020.
The number of ESG-themed funds in the pipeline continues to grow. This month’s crop includes a couple of passive ETFs, SPDR [S&P 500 ESG] ETF and JPMorgan Carbon Transition U.S. Equity ETF, as well as Continue reading →
