Dear friends,
It’s been that kind of year. Who would have guessed that I’d miss the quiet sanity of 2021?
It has been a lot like that, hasn’t it?
It has been a lot like that, hasn’t it?
Here’s a snapshot of 2022 so Continue reading →
“Stocks for the long-term!” goes the mantra. That chant has two meanings: (1) in the (very) long-term, no asset outperforms common stock. And (2) in any other term, stocks are too volatile to the trusted so if you’re going to buy them, be sure you’re doing it with a long time Continue reading →
Dear friends,
Welcome to February. It’s a month frequently associated with the color red – as in Valentine’s Day hearts, chocolate boxes, and scandalous lingerie – but investors have started the year seeing a different kind of red.
Here’s a compendium of every Vanguard index mutual fund (one share class for each) but appearances by a handful of special guests. In one month, investors had YTD returns of … Continue reading →
Fresh from the MFO Archives! An update on a classic essay.
Capture ratio is a sort of “bang for your buck” summary. It’s calculated by dividing a fund’s upside capture (a fund that typically rises 1.1% when the market rises 1% has an upside capture of 1.10) by its downside capture (a fund that typically falls 1.1% when the market falls 1% has a downside capture of 1.10). Capture ratios greater than 1.0 reflect funds that Continue reading →
The fund’s goal is to generate current income. In particular, they want to offer an attractively higher yield than comparable maturity US Treasury securities without taking significant default or interest rate risk.
The managers invest primarily in shorter duration corporate bonds, both investment grade, and high yield. They might also own other income-producing securities such as securitized loans and convertible securities. Generally, the majority of securities in the portfolio are part of smaller issues of less than $500 million.
For investors, there is only one risk: Continue reading →
Dear friends,
Merry Christmas and Happy New Year!
Let’s hope it’s a great one.
If you think I’m a bit late on the former, it’s because you think of Christmas as a day rather than as a season. Not so! In 567, the Council of Tours established that the twelve days between Christmas and Epiphany – also sometimes known as “Chip’s son’s birthday” – were to be treated as a single holiday. (Her sister was born on Christmas Day so it makes sense she waited to give David a reason to celebrate the other end of the holiday.) In England, in Continue reading →
Each year, usually in our February issue, I walk through my portfolio. It gives some folks the shivers, and others, a nice sense of superiority. On the whole, it seemed like a good idea to accelerate the schedule this year. I’ll walk through it using the same five-part process that we’ve urged on others.
Step One: Assess my goals and resources
My overarching goal is to have a portfolio that I don’t have Continue reading →
Most funds don’t show up on investors’ radar until they have at least a three-year record, which is also the point at which they receive their inaugural Morningstar rating. That’s a generally sensible, sometimes silly constraint since many funds that have been operating for fewer than three years are actually long-tested strategies managed by highly experienced professionals, which are just coming to market in a new form. Relatively recent examples of such funds include Andrew Foster’s Seafarer Overseas Growth & Income (SFGIX), Rajiv Jain’s GQG Partners Emerging Markets Equity (GQGPX), Abhay Deshpande’s Centerstone Investors (CETAX), and Amit Wadhwaney’s Moerus Worldwide (MOWNX). Collectively, those four managers had overseen more than Continue reading →
Running them, not assessing them.
Morningstar runs a booming, global asset management business. They have $255 billion under management and advisement (as of 9/30/21).
Of that, $50.5 billion are assets under management, primarily through their Managed Portfolios and Institutional Asset Management services.
They also have 116,627 Morningstar.com Premium members and 17,182 Morningstar Direct licensees.
The managed portfolios traditionally used outside, actively managed funds. In 2018, Morningstar decided Continue reading →
On December 16, 2021, Grandeur Peak Global Advisors launched its 10th fund, Grandeur Peak Global Explorer (GPGEX). The fund will pursue long-term capital appreciation through investments in a global portfolio of micro- to mid-cap stocks. Because of its focus on tiny names, the adviser has set a strategy capacity of $35 million for the fund and will close it rather than compromise the ability to execute the strategy.
As a practical matter, Global Explorer pursues Global Reach’s strategy with a management twist. The fund has 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 we survey actively managed funds and ETFs in the pipeline. This month brings 24 new products in the pipeline, most of which will launch in March 2022.
Including in the funds in registration are funds that are being converted from open-end funds to ETFs and those which have been purchased by new advisers, often with minor tweaks. Two funds in the latter camp which Continue reading →
As part of Heartland Advisors’ succession plan, founder William (“Bill”) J. Nasgovitz intends to transfer a controlling interest in Heartland Advisors to Will Nasgovitz, the Chief Executive Officer of Heartland Advisors, in 2022. The elder Mr. Nasgovitz launched the firm, and the Heartland Value Fund, in 1984. The younger Mr. Nasgovitz joined the firm in 2006 and co-manages the Heartland Value and Mid Cap Value funds.
On the continuing theme of “rules are for the little people,” the Wall Street Journal reports
Sens. Pat Toomey (R., Pa.) and Cynthia Lummis (R., Wyo.) sit on the powerful Senate Banking Committee and have been advocates for Continue reading →
A handful of young funds, by luck or design, have managed the rare feat of peer beating returns since inception with risk-rated, risk-adjusted returns (MFO rating, Ulcer rating) and risk metrics (downside deviation, bear market deviation, down market deviation).
The US stock market is approaching the most extreme valuation levels of the past 150 years, at least as measured by Continue reading →
Our last review of “the Terrific Twos” ran in January 2019. We highlighted 10 funds. Here’s what became of them.
Four of the ten were liquidated: Ladder Select Bond (LSBIX), which earned fours stars but never drew over $20 million; BlackRock Emerging Markets Equity Strategies (BEFAX) died in April 2020; WisdomTree Dynamic Long/Short US Equity (DYLS) was Continue reading →
Dear friends,
It’s December and Augustana’s Christmas tree is newly lit. Like the college, the tree is pretty humble but still a source of light and comfort at a time when both are welcome. Continue reading →
At the time of publication, this fund was named Osterweis Strategic Investment Fund.
The fund pursues the reassuring objective of long-term total returns and capital preservation. Osterweis starts with a strategic allocation that’s 50% equities and 50% bonds. In bull markets, they can increase the equity exposure to as high as 75%. In bear markets, they can drop it to as low as 25%. Their argument is that “Over long periods of time, we believe a static balanced allocation of 50% equities and 50% fixed income has the potential to provide investors with returns rivaling an equity-only portfolio but with less principal risk, lower volatility, and greater income” achieved through the compounding of reasonable gains and the avoidance of major losses.
Both equity and debt are largely unconstrained, that is, the managers can Continue reading →
On September 30, 2021, Brown Advisory launched their Sustainable Small-Cap Core Fund which is based on their Sustainable Small-Cap Core Strategy, which targets high-net-worth individuals and institutions, launched in July 2017. The goal is long-term capital appreciation. The strategy is to create a concentrated, ESG-screened “best ideas” portfolio populated by small-cap growth and value stocks.
Brown Advisory describes the strategy this way: Continue reading →
On September 30, 2021, T. Rowe Price launched the T. Rowe Price Total Return ETF. The fund is a not-quite-clone of the successful T. Rowe Price Total Return Fund (PTTFX). The strategy behind the fund and ETF start with the same two assumptions: Continue reading →
China has long been the driver of returns in the emerging markets, both because it is the largest emerging market and because the fortunes of other emerging economies are inextricably linked to China through trade, investment, and direct competition.
After a substantial correction which, at its worst, wiped $1.5 trillion in market cap off the books, China’s cheerleaders are speaking up. In August, BlackRock argued that China wasn’t really emerging and that investors should triple their exposure to Chinese equities. They then launched a mutual fund for Chinese investors, which Continue reading →
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 200 words and precisely as much of your time and attention as you’re willing to share. These aren’t Continue reading →
