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.

Funds in Registration

By David Snowball

The SEC requires advisers to give them 75 days to review and comment upon any proposed new fund offering. During those 75 days, the advisers aren’t permitted to say anything about the funds except “please refer to our public filing with the SEC.” This month there are 17 no-load retail funds and actively managed ETFs in the pipeline. I’m most intrigued by two funds that aren’t actually new: Seven Canyons Strategic Income and Seven Canyons World Innovators are the rechristened versions of two Wasatch funds, both managed by Wasatch founder Samuel Stewart. Mr. Stewart, now 75, appears to be distancing himself from the firm, though we don’t know the circumstances behind it. The Wasatch website, including Mr. Stewart’s most recent shareholder letter, offers no hints concerning the change. Wasatch has seen steady outflows every quarter since Q2 2014, with a net outflow of around $5.5 billion. One could imagine the departure of these funds, and the merger of Wasatch Long/Short into Wasatch Global Value (see this month’s “Briefly Noted” for details), as attempts to Continue reading →

March 1, 2018

By David Snowball

Dear friends,

I’m often a bit confused. Sometimes it’s as simple as the stuff in my pantry. Why, for instance, is cranberry sauce canned upside down? Look! The part you’ve supposed to open is on the bottom.

Sometimes it’s the challenge of figuring other people out. What was Snap’s board thinking when they gave their CEO at $637 million (an amount equal to 75% of the company’s revenue) bonus? Someone named Kylie Jenner shared the following 19 words on Twitter: “”so does anyone else not open Snapchat anymore? Or is it just me? Ugh, this is so sad.” How on Earth did that convince investors to trim $1.6 billion in Snap’s market value in 24 hours? Continue reading →

Funds for the Gun-Shy

By David Snowball

I grew up in western Pennsylvania where even the elementary schools let out classes on the first day of small game season. I’m the son of a veteran and a hunter, and the grandson of a sheriff. I spent a lot of mornings, just after dawn, in blaze orange, walking as quietly as a seven-year-old could. I owned a single-barrel 20 gauge Remington and cared for it well. (I also owned a .22 with a scope I never quite mastered.) I was thrilled when I got to stay overnight in a hunting camp with “the men,” though I modestly regretted both the jar of Limburger cheese that someone had left the season before and the creepy sounds you heard when visiting the outhouse at night. I’ve sheltered in the eerie calm of a Continue reading →

Elevator Talk: Ali Motamed, Balter Invenomics (BIVIX)

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.

Ali Motamed manages Balter Invenomic Fund (BIVIX), which Continue reading →

FAM Value (FAMVX/FAMWX), March 2018

By David Snowball

Objective and strategy

The managers seek to maximize long-term return on capital. They can invest in firms of any size, but mostly invest in mid- to large-cap US firms and invest through both common stocks and convertibles. They pursue a patient value approach to investing which favors companies which meet at least one of these three criteria Continue reading →

Launch Alert: JOHCM Global Income Builder

By David Snowball

On November 29, 2017, J.O. Hambro Capital Management launched JOHCM Global Income Builder (JOFIX/JOBIX) managed by the firm’s Multi Asset Value Team. It seeks to achieve a reliable stream of meaningful monthly income distributions, coupled with some capital growth and a vigilant concern for limiting investor losses. It is a multi-asset fund but it is largely unconstrained: it targets US and international income-producing securities including common stock, high-yield and investment grade debt, preferred shares and convertibles, and a variety of hedges including gold, precious metals, currency forward contracts, and inflation-linked vehicles. Continue reading →

The Morningstar Minute

By David Snowball

The Morningstar Investment Conference returns to June and to the McCormick Place. MICUS runs June 11–13, 2018 at McCormick Place, Chicago. Jeremy Grantham and Dan Kahnemann are speaking and folks from a bunch of first-tier small fund firms will be there: Centerstone, FPA, JOHCM, Moerus, Queens Road, RiverPark, Seafarer. Not Grandeur Peak or Rondure. Pity. We’ll be there. Let us know if you’d like to meet. Continue reading →

Funds in Registration

By David Snowball

The SEC requires advisers to give them 75 days to review and comment upon any proposed new fund offering. During those 75 days, the advisers aren’t permitted to say anything about the funds except “please refer to our public filing with the SEC.” At peak times of the year, there might be a couple dozen no-load retail funds and active ETFs in registration. This month the offerings are few but intriguing: a health sector fund from Baron, Matisse Capital’s second fund targeting discounted CEFs, the re-emergence of a successful Scout manager at Oberweis and an intriguing (but unexplained) active ETF that’s Continue reading →

Briefly Noted

By David Snowball

Updates

The 2018 Thomas Reuters Lipper Fund Awards have been announced. By their calculation, the top fund families overall are Thrivent Mutual Funds and TIAA Investments. Thrivent represents the universe of small fund companies while TIAA represents large firms. The top small fund families were PRIMECAP (equities), Ashmore (fixed income) and Allianz Global Investors (mixed assets).

Individual funds worth noting Continue reading →

February 1, 2018

By David Snowball

Dear friends,

It’s a Tale of Two Parties, one rather healthier than the other. My students, slowed by a surprisingly cold month and end-of-term stress (Augustana is finishing a Winter trimester that began a bit after Halloween and ends near Valentine’s Day), have taken to launching spontaneous little parties in hopes of gathering that last burst of energy needed to make it through a last set of research presentations and reflective essays. Lionel Ritchie (whose name they barely recognize) captures the late winter moment: “Party, Karamu, Fiesta, Forever. Come on and sing along.” On whole, that strikes me as joyful, appropriate and, ultimately, productive.

The other party rather Continue reading →

Launch Alert: CrossingBridge Low Duration High Yield (CBLDX)

By David Snowball

CrossingBridge Low Duration High Yield launched on February 1, 2018. The fund seeks “high current income and capital appreciation consistent with the preservation of capital.” The plan is to invest in junk bonds and loans, mostly CCC or better. Their investable universe includes corporate bonds, zero-coupon bonds, commercial paper, ETNs, distressed debt securities, bank loan assignments and/or participations, private placements, mortgage- and asset-backed securities, U.S. Government obligations and bank loans to corporate borrowers. While most of the portfolio will be domestic, up to 25% might be foreign fixed-income securities. They’ll generally have a duration of three years or less. There’s also some (limited) ability to Continue reading →

Elevator Talk: Parker Binion, KCM Macro Trends Fund

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 about interesting funds.

KCM Macro Trends Fund (KCMTX/KCMIX) launched in Continue reading →

Funds in Registration

By David Snowball

The SEC requires advisers to give them 75 days to review and comment upon any proposed new fund offering. During those 75 days, the advisers aren’t permitted to say anything about the funds except “please refer to our public filing with the SEC.” At peak times of the year, there might be a couple dozen no-load retail funds and active ETFs in registration. Midwinter, not so much. Fidelity’s ESG bond index might be a useful option for investors looking to express their concerns about shaping a more humane world. Beyond that, mostly nice people who don’t yet have a public track record or striking competitive advantage. They might do very well, but we’ll have to watch for a bit. Continue reading →

Briefly Noted

By David Snowball

Updates (and notes from careful readers)

Several MLP funds – including Center Coast MLP Focus Fund (CCCAX) and Global X MLP ETF (MLPA) – have announced that the recent tax law changes affects them. They’re treated as “a regular corporation” for the purpose of tax law, which means that the statutory tax rate that affects them has dropped from 35% to 21%. It is not yet clear that the rate change will have any appreciable effect on shareholders or the funds’ returns because of the complexity of calculating corporate taxes, then or now.

FPA U.S. Value Fund (FPPFX) has affirmed the proposition that Continue reading →

January 1, 2018

By David Snowball

Dear friends,

Welcome to the New Year!

And to an odd question: why is it a New Year? That is, why January 1? Most calendrical events correspond to something: cycles of the moon and stars, movement of the seasons, conclusions of wars or deaths of Great Men.

But why January 1? It corresponds with nothing.

The short version of the answer is Continue reading →

Rolling toward the one fund you can trust

By David Snowball

The knock on mutual fund performance numbers is that they’re static and arbitrary snapshots that give the illusion of being meaningful. What do you learn from looking at a fund’s five-year performance number? Mostly, you learn that the fund, through skill or luck, did well in the market conditions that obtained between December 2012 and December 2017. Sadly, we don’t have any reason to think those two dates are particularly important (why December 2012? ‘cause it was five years ago, duh!) and we don’t have any Continue reading →

Shukran jazīlan! Trugarez! Xièxie! Go raibh maith agaibh! E molte grazie!

By David Snowball

Likewise merci, danke and, more than all, thanks!

On December 17th, I wrote a note to the 7,000 or so folks on our mailing list. The sad part of the note was reminding folks of the end of our associate’s relationship with Amazon which had so long provided our ability to cover our “hard” bills such as webhosting and email. The glad part was announcing a challenge gift of $2000, offered by three MFO readers who wanted to do the best they could to support us. Their offer was straightforward: we’ll put in a dollar of our own money for every Continue reading →