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.

Matthews Asia Credit Opportunities (MCRDX/MICPX), July 2017

By David Snowball

*Matthews Asia liquidated their two fixed-income funds in March, 2023. Manager Teresa Kong subsequently left the firm. In consequence, the information for Marathon Value should be read for archival purposes only.*

Objective and strategy

The managers seek total return over the long term. They invest in debt issued by Asian corporations, governments and supranatural institutions. The managers invest, primarily, in high-yield, dollar-denominated debt though they define that term broadly enough to incorporate both high-yield bonds and debt-related instruments such as convertible bonds, hybrids and derivatives with fixed income characteristics.  Around 20-25% of the portfolio has been in convertible bonds since inception, and that percentage is been pretty stable from year to year. 

Adviser

Matthews International Capital Management, LLC, the Investment Advisor to the Matthews Asia Funds, was founded Continue reading →

Launch Alert: Artisan Thematic Fund (ARTTX)

By David Snowball

On April 24, 2017, Artisan Partners launched Artisan Thematic Fund (ARTTX). The managers seek to identify secular themes that will have an enduring impact on business, ideally identifying those themes sooner and more clearly than their competitors. There’s a point at which a development transitions from being geeky-cool to being a driver of corporate profits; Artisan refers to that as Continue reading →

Funds in Registration

By David Snowball

Before fund companies are allowed to offer mutual funds to the public, they need to submit them to SEC review. The SEC has 75 days to ponder the fate of the newly-registered funds before allowing them to proceed. The registration period is also called “the quiet period” because fund companies are not allowed to talk about their funds in registration. This month’s good news is that most of the mutual funds in registration are sensible strategies from respected shops: Artisan, AQR, Brown Advisory, T. Rowe Price and others. The other part of the news is that the ETF industry continues to crank out a freakish mishmash. That includes the Quincy Jones Streaming Music, Media & Entertainment ETF, the Republican Policies Fund (GOP), the Democratic Policies Fund (DEMS) and the European Union Breakup Fund (EUXT). Continue reading →

June 1, 2017

By David Snowball

Dear friends,

“And they’re off!” signals both the start of a horse race and the end of a class’s years at college.

Augustana just launched 485 more grads in your direction. It’s our 157th assault on adult life, and one of our largest. I’m pleased that Mike Daniels was the student selected to speak at commencement but he’s so durn Augie. Mike’s a defensive lineman, but also a jazz musician. He’s an accountant, but also a first team NCAA Academic All-American. He’s been to Italy (with the football team), but also managed to sneak in three internships on his way to working for Deloitte & Touche. He’s a good man who overtly rejects “good enough” as a goal; that is not, he said, Continue reading →

The Dry Powder Gang, updated

By David Snowball

“Put your trust in God but keep your powder dry.”

Oliver Cromwell, 1650, to the soldiers of the New Model Army as they prepared to forge an Irish river and head into battle.

Cromwell was a dour, humorless (or “humourless”) religious fanatic charged with squashing every Catholic and every independent thought in the British Isles because, well, that’s what God demanded. Famine, plague, deportations, mass death and deportations followed.

But even Cromwell knew that the key to victory was Continue reading →

Time to put on your big-boy pants and check your investments

By David Snowball

As I noted in my publishers letter this month, this article, originally published in May, contained a substantial and utterly boneheaded mathematical error. After we published it, two things happened: first, readers took the article seriously enough to find the error and report it; second, our colleague Charles, substantially revised the method for calculating the maximum drawdown for funds in my portfolio which haven’t been around for a full market cycle. Because those changes were material, we decided to re-present this article as a public service.

Sorry, I don’t have a really gender-neutral alternatives to “big-boy pants.”

In all likelihood, you might expect to experience considerable ugliness in financial markets in the months ahead. That’s not a timing call, it’s a statement of the obvious.

What’s behind it?

The bull market in stocks is Continue reading →

Funds in Registration

By David Snowball

Before fund companies are allowed to offer mutual funds to the public, they need to submit them to SEC review. The SEC has 75 days to ponder the fate of the newly-registered funds before allowing them to proceed. The registration period is also called “the quiet period” because fund companies are not allowed to talk about their funds in registration. Happily, we are! The once-steady flow of 20-30 new funds a month has dwindled to a half dozen, many of which are simply converted versions of hedge funds or separately managed accounts. The former are more common this month, with five hedge funds morphing into two new mutual funds, including an unprecedented four-for-one merger and conversion offered up by Driehaus. Continue reading →

Briefly noted

By David Snowball

It’s been an unusually busy month in the industry, with nearly three dozen funds liquidated or slated for liquidation, as well as a surprising number of open funds closing to new investors and closed funds opening to them. And, as ever, the “smoke and marketing” crowd has re-branded a bunch of funds; most, not surprisingly, aren’t very good. Continue reading →

May 1, 2017

By David Snowball

Dear friends,

The theory says that our academic year ends in two weeks. As I gazed this morning across rows of slightly-stunned faces, I realized that the college’s schedule and the students’ don’t always align.

With the weather turning toward summer, the lawn calling and the campus in bloom, I’m intensely sympathetic. Continue reading →

Morningstar Investment Conference 2017: Six smart guys

By David Snowball

I’ll tell you about the six smart guys. They represent a bit over half of the interviews and discussions I participated in during Morningstar’s annual Fest at the McCormick. My normal schedule mixed one-on-one interactions with sitting in on panels and keynote presentations; the changing emphasis of the conference, rather away from hearing from mutual fund managers and strategists, and toward the business concerns of the advisors, led me to focus exclusively on talking with interesting folks.

Many of these interviews will serve as the seedbeds for upcoming fund profiles. In particular, we hope to celebrate Continue reading →

RiverPark Short Term High Yield Fund (RPHYX/RPHIX), May 2017

By David Snowball

This is an update of a profile first published in July 2011.

Objective

The fund seeks high current income and capital appreciation consistent with the preservation of capital, and is looking for yields that are better than those available via traditional money market funds. They invest primarily in high yield bonds with an effective maturity of less than three years but can also have money in short term debt, preferred stock, convertible bonds, and fixed- or floating-rate bank loans. 

Adviser

RiverPark Advisers. Executives from Baron Asset Management, including Continue reading →

Elevator Talk: Adam Strauss, Appleseed Fund (APPLX/APPIX)

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 or 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 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.

Adam Strauss is, along with his brother Joshua, one of the three managers of Appleseed Fund. Both joined the firm in 2004 after careers outside the financial services sector. The third manager, Bill Pekin, has been Continue reading →

Launch Alert: Rondure Overseas Fund and Rondure New World Fund

By David Snowball

On May 1, 2017, Rondure Global Advisors, headquartered in Salt Lake City and one of the nation’s few woman-owned fund advisers, launched Rondure New World Fund (RNWIX/RNWOX) and Rondure Overseas Fund (ROSIX/ROSOX ). Rondure Global operates in partnership with Grandeur Peak Global, which offers back office and trading support, as well as the opportunity for collegial investment discussions. Rondure’s founder, CEO and lead portfolio manager is Laura Geritz, who describes this partnership as “one of our key competitive advantages” since it will give her the opportunity, rare for a manager launching a new firm, to focus on investment rather than management.

Both funds will follow the same Continue reading →

Funds in registration, May 2017

By David Snowball

A couple of this month’s nominally “new” funds are actually repackaged versions of existing products.  Congress Small Cap Growth Fund is just the reorganized version of Century Small Cap Select Fund (CSMVX), a two-star small cap growth fund with a 17-year record. Long-time manager Alexander Thorndike gains a co-manager, Gregg O’Keefe. Similarly, Oak Ridge Global Resources & Infrastructure Fund is a new name for Ridgeworth Capital Innovations Global Resources and Infrastructure Fund (INNAX), a solid but tiny fund. Sadly, that might be the most interesting stuff going on this month. Continue reading →

Briefly Noted . . .

By David Snowball

On April 20, 2017, UMB announced that it signed an agreement to sell Scout Investments and Reams Asset Management to Carillon Tower Adviser, a wholly owned subsidiary of Raymond James. In announcing its 2016 creation, James described Carillon as “new company to provide transparency and create efficiencies among its asset management firms.” As I note in our story on the Morningstar interviews, Carillon wasn’t particularly transparent and the guy representing Scout was curt to the point of being rude.

Sentinel Asset Management has agreed to sell its mutual funds to Touchstone. Details aren’t yet available.

The previously announced plan to Continue reading →

April 1, 2017

By David Snowball

Dear friends,

Welcome to spring!

The weather’s getting better. It’s not clear that the quality of writing about mutual funds is.

“This couple followed the 11 tips to picking good mutual funds and now they’re rich!”

Ummm … they’re lying on a bed of British pounds so unless they made a Continue reading →

Morningstar to the industry: Move over. We can do it better ourselves.

By David Snowball

On March 6, 2017, Morningstar announced their intention to displace 50 existing mutual funds from their $30 billion Morningstar Managed Portfolio program and replace them with nine brand-new Morningstar-branded funds. Understandably, there’s been a bit of interest in the financial media, though much of it is behind paywalls. (I’m not complaining, by the way. Journalists need to be compensated.) The most notable “free” articles are:

Advisers split on Morningstar’s new mutual funds

Morningstar makes bid to offer mutual funds for exclusive use of advisers

Like everyone else, Morningstar expands its advisory business

By far the most thorough and balanced piece was How and why Morningstar sliced 16 bps for RIAs by dumping third-party mutual funds and stamping its Switzerland brand on its own mutual funds, written by Janice Kirkel of RIABiz. Continue reading →

Northern Global Tactical Asset Allocation (BBALX), April 2017

By David Snowball

Objective

The fund seeks a combination of growth and income. Northern Trust’s Investment Policy Committee develops tactical asset allocation recommendations based on economic factors such as GDP and inflation; fixed-income market factors such as sovereign yields, credit spreads and currency trends; and stock market factors such as domestic and foreign earnings growth and valuations. The managers execute that allocation by investing in other Northern funds and ETFs. As of 12/31/2016, the fund held two Northern funds and nine ETFs.

Adviser

Northern Trust Investments is part of Northern Trust Corp., a bank founded in 1889. The parent company provides Continue reading →

Launch Alert: 361 US Small Cap Equity ASFQX

By David Snowball

On December 30, 2016, 361 Capital Management launched 361 US Small Cap Equity (ASFQX). This fund is the newest embodiment of an investment strategy initiated by John Riddle and Mark Jaeger of BRC Investment Management. Messrs. Riddle and Jaeger co-founded BRC in 2005, then merged with 361 Capital in October 2016. BRC was managing about $800 million in assets at the time of the merger, 361 had about $1.3 billion.

What do you need to know? Continue reading →