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.

Death Cleaning my portfolio

By David Snowball

Or, since I teach at a historically Swedish-Lutheran college, I might use the original Swedish term: I was döstädning my portfolio.

By way of background, my income comes from teaching at the aforementioned Augustana College; it’s exceedingly secure but has not increased much, in real or inflation-adjusted terms, in quite a while. It has “bond-like” qualities. I invest about 13% pretax for retirement, the college has a match that adds about 10% and I squirrel away around 10% of my take-home pay each month. Our home in Davenport is small, snug and affordable. Our cars are used but clean and efficient. Our splurges often enough involve live music and Continue reading →

Learning from the fall fall

By David Snowball

The last substantial decline in the US stock market occurred between 2007-09. Vanguard Total Stock Market Index Fund (VTSMX) declined by 50.9% and remained under water for 52 months. Vanguard International Stock Market Index (VGTSX) fell 58.5% and did not recover for 114 months. Investors in Vanguard Emerging Market Index (VEIEX) would be at least a little envious of the fact that VGTSX investors were in the red for almost ten years, since they were at a loss for more than 10 years after their portfolio hit bottom. Investors who hewed to the “stocks for the long-term” mantra and faithfully held their VEIEX shares ended the decade with an average annual loss of 0.1%.

The good news is that Continue reading →

ETFs and the fine art of propaganda

By David Snowball

I teach about propaganda and persuasion for a living. “Propaganda” in the Hitler, Goebbels, rise of the Nazis sense of the term. It’s an important and fascinating study, though it seems reasonably tangential to contemporary investing.

Then I started reading about ETF marketing.

The Institute for Propaganda Analysis, 1937-1942, was an honest attempt to help American citizens detect and dissect Continue reading →

Finding ESG Fund One

By David Snowball

By Morningstar’s calculation, there are 486 “socially-conscious” funds.  While bond and mixed-asset funds can be “socially-conscious,” Morningstar does not rate the sustainability of their portfolios. If you subtract the 183 funds in those categories, you’re left with 303 “socially-conscious” equity funds. Only 93 (or 31%) have portfolios that score “high” on Morningstar’s sustainability ratings while 101 more are “above average,” so about two-thirds of ESG funds earn good-to-great sustainability scores.

At the other end of the spectrum, 18 (about 6%, including one with “environmental” in the name) have the Continue reading →

Brown Advisory Sustainable Growth Fund (BAFWX/BIAWX/BAWAX), April 2019

By David Snowball

Objective and strategy

The managers seek long-term capital appreciation by investing in a concentrated portfolio of 30-40 mid and large capitalization companies that use sustainable business strategies (SBA) to drive future earnings growth.

They focus on finding companies whose sustainability strategies are generating tangible business results such as revenue growth, cost improvement, or enhanced franchise value. Such companies may enjoy competitive advantages from environmentally efficient design or manufacturing or offer Continue reading →

Funds in registration

By David Snowball

Before funds and ETFs can be offered to the public, they’ve got to be submitted to the SEC which has 70 days to review the application. In general, advisers try to launch just before year’s end because that allows them to have clean “year to date” and calendar year results to share. These launches will likely occur in late May or June so that they’ll at least have full-quarter results for 2019 Q3.

The team behind Harbor Focused International has been recognized as one of the best asset managers in Europe, while the advisers behind DoubleLine Emerging Markets Local Currency Bond Fund and Vanguard Global ESG Select Stock Fund are among the best in US fixed income and equity investing, respectively. And yet, the Kensington Managed Income Fund might have the best underlying performance of them all. That makes it a Continue reading →

Briefly Noted . . .

By David Snowball

Each month we share developments in the industry that are, individually, to minor to warrant their own story. Since about three-quarters of it are stories of failure and the subsequent thrashing about, it mostly gets downplayed. This month saw, in particular, the liquidation of a lot of funds that were trying to deal with a low-interest rate, high stock valuation world: their names invoke global allocations and global bonds, alternative and unconstrained income, flexible opportunities and the occasional quantamental bent. Continue reading →

March 1, 2019

By David Snowball

Dear friends,

It’s spring and it’s about 10 degrees above zero here which means it’s Spring Break at Augustana College! Winter term on Augie’s singularly bizarre academic calendar runs from roughly Halloween to Valentine’s Day, gulping down Thanksgiving, Christmas, and New Year’s along the way. We offer, I suppose, the antithesis of the old MTV spring break beach parties with raucous guys dancing with girlfriends clad only in whipped cream. Nope, Swedish-Lutherans we, we hand the kids their parkas and urge them to go off and have a good time, but just Continue reading →

The Investor’s Guide to the End of the World

By David Snowball

Human actions are causing our planet’s climate to become increasingly unstable. We are beyond the point where that fact is open to debate. Most Americans, Republicans and Democrats both, now accept the reality of climate change. That’s based on fascinating data visualizations provided by the Yale Program on Climate Change Communication. Republicans, far more than Democrats and others, are unsure that there’s a human role or that scientists have reached agreement on what is happening.

The short version is that every serious inquiry reaches the same conclusion: the climate Continue reading →

Funds in Registration

By David Snowball

Before funds can be offered to the public, they’ve got to be submitted to the SEC which has 70 days to review the application. In general, advisers try to launch just before years end because that allows them to have clean “year to date” and calendar year results to share. These launches will likely occur in late April or May.

Palm Valley Capital Fund is sort of a stand-out here, despite the name that vaguely calls a retirement community (with golf!) to mind. It will be a small cap stock fund managed by Continue reading →

Briefly Noted

By David Snowball

Updates

The Ghost Ship sails every onward. Voya Corporate Leaders (LEXCX, once Lexington Corporate Leaders) continues its skipperless voyage. The fund was launched in 1935 with a simple strategy (buy an equal number of shares of what were then America’s best companies, and never sell) and no manager. Right: no manager changes in more than 83 years ‘cause it’s had no manager in more than 83 years. How’s that working for Continue reading →

February 1, 2019

By David Snowball

Dear friends,

Please join me in bidding a fond adieu to January. It was a month in which our increasingly unstable global climate manifested itself in record-breaking cold and snow. Davenport, Iowa, my adopted hometown, saw the lowest temperature (-33, six degrees colder than the old record) and coldest wind chill readings (-54) in its recorded history. Despite having no precipitation in the first eleven days of January, it still managed 30.2” of snow by month’s end, the most since record-keeping began in 1884. Local drivers responded Continue reading →

The long and short of a defensive fund

By David Snowball

People bandy about the phrase “long/short fund” as if it had meaning. It does not. It is, instead, a catch-all term  that includes funds with very different objectives and very different strategies, including some funds that do no shorting at all. Some short individual stocks, some short groups of stocks through ETFs and others short entire markets. Some are market-neutral, some are permanently defensive, some switch between defense and offense, others are always playing offense.

A 2013 analysis of all funds listed as “long/short”  in Morningstar’s database by Long Short Advisors found “just 25 funds that are Continue reading →

Grandeur Peak reopening: the limited time offer

By David Snowball

On January 14, 2019, Grandeur Peak announced the partial reopening of four of their funds: Global Opportunities, International Opportunities, Global Reach and Emerging Markets Opportunities funds. The first three had been hard closed, while the last had been soft-closed. Under the terms of the reopening, the funds are open to additional purchases by existing shareholders but also to new shareholders willing to purchase the funds directly from Grandeur Peak Funds at www.grandeurpeakglobal.com.  Financial advisors and retirement plans with clients in one of these funds will be able to continue investing in the fund for both existing as well as new clients.

Long-term investors should take this opportunity seriously. Continue reading →

Launch Alert: FPA Flexible Income Fund (FPFIX)

By David Snowball

On December 31, 2018, FPA launched FPA Flexible Income Fund (FPFIX). The fund seeks to provide long-term total return, which includes income and capital appreciation, while considering capital preservation. This marks FPA’s first new bond fund since becoming adviser to FPA New Income (FPNIX) in 1984. Morningstar celebrates New Income for “a strong management, process, and risk/reward profile and has been a safe haven from losses and bond-market excess.” FPA hopes to leverage those virtues by applying them to a fund that has permission, but not the obligation, to follow a modestly more aggressive path.

FPA tends to be the home of absolute Continue reading →

Elevator Talk: Craig Sedmak and Tom Harney, Ladder Select Bond Fund (LSBIX)

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 300 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 a few hundred 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. 

The right answer to almost all investing questions over the Continue reading →

Funds in registration

By David Snowball

Just a handful of new funds were registered with the SEC this month, perhaps in response to the disruption caused by the government shutdown which affected the SEC. In any case, we’ve chosen to highlight just two funds from that list; both are guided by first-rate managers whose long careers and other funds should engender considerable interest and respect. Continue reading →

Briefly Noted

By David Snowball

Updates

Effective January 1, 2019, Castle Financial & Retirement Planning Associates discontinued its voluntary fee waiver for All-Terrain Opportunity (TERIX) and will not seek reimbursement of any fees it voluntarily waived.

Welcome back to our readers employed by the Securities and Exchange Commission! The whole “shut the government down” thing struck me as unproductive lunacy and ended up with a number of our readers (most visibly the SEC folks) furloughed. Continue reading →