Category Archives: Charles

Morningstar Investment Conference – 2019 #MICUS

By Charles Boccadoro

When people have no choice, life is almost unbearable …

But as the number of choices keeps growing, negative aspects of having a multitude of options begin to appear …

the negatives escalate until we become overloaded.

At this point, choice no longer liberates, but debilitates.

Barry Schwartz in Paradox of Choices

If last year’s Morningstar Investment Conference, which consolidated the once separate ETF venue, was one of the worst in memory, this year’s was one of the best.

Once again, it occurred in the beautiful and vibrant city of Chicago, where the 35-year old company Morningstar is headquartered, on May 8-10 at the sprawling but impressively run McCormick Place, which happens to be the largest convention center in North America. The conference’s 1350 registered Continue reading →

New MFO Search Tools Publicly Available

By Charles Boccadoro

We’ve supplanted our “Miraculous MultiSearch” and Risk Profile search tools with QuickSearch, which is now available on the MFO Premium site. It offers more features and is updated monthly. We’ve also consolidated our Great Owl, Three Alarm, and Dashboard (of Profiled Funds) tools to the MFO Premium site, similar info as before but more user-friendly and also updated monthly. All these tools remain available to public and trace back, in fact, to our legacy Fund Alarm site.

To help walk users through these tools, as well as to Continue reading →

Introducing MFO Premium’s Compare Funds Tool

By Charles Boccadoro

The Compare Funds tool displays all the data from MultiSearch Results table, our main search tool on the MFO Premium site, for up to 10 funds in an easy-to-compare and export/pdf format. Basically, it transposes the table from horizontal to vertical orientation. Thanks to our friends at Gaia Capital Management for requesting this display feature.

We use the Oakmark fund family to illustrate. Here’s summary only risk and return metrics across the current full market cycle through Continue reading →

The Ten-Year Bull

By Charles Boccadoro

“Happy days are here again! The skies above are clear again. Let us

sing a song of cheer again, Happy days are here again!”

Jack Yellen

February marked the tenth full year of the current bull market, which began in March of 2009. For those of you that held steady through the great recession or have just been lucky or wise enough be invested over this period, you’ve been well rewarded.

Through much of its first years, this bull market had little love, especially in late 2011 when it looked like we were headed back into bear territory. There have been a couple modest retractions since: the taper tantrum of 2013, January 2016, and Continue reading →

Using MFO’s Bear Market Rating To Help Contain Portfolio Drawdown

By Charles Boccadoro

“Never risk what you have and need

for what we don’t have and don’t need.”

Warren Buffett

December reminded us of how quickly the music can stop. The SP500 fell 9% turning a modest annual gain into a loss. Those hugging the S&P were the lucky ones.

Touchstone Small Company (SAGWX) was off 13.4%. Invesco S&P SmallCap Health Care ETF (PSCH) was off 16.1%. Both are dual MFO Great Owl and Honor Roll funds, which means they have a track record of top quintile risk adjusted and absolute return versus peers.

Other notables: Parnassus Endeavor (PARWX) off 13.8%, Hotchkis & Wiley Mid-Cap Value (HWMIX) off 15.2%, and Miller Opportunity (LMOPX) off Continue reading →

MFO Premium Webinar

By Charles Boccadoro

On Tuesday January 15th, we will host a webinar discussing latest features of the MFO Premium search tool site. This time we are fortunate to be joined by Brad Ferguson of Halter Ferguson Financial, a fee-only independent financial advisor based in Indianapolis. Brad will highlight the Ferguson analysis tool, one of the site’s newest features, which helps investors identify funds with equity-like returns but tempered volatility.

Other topics covered on the call will be Continue reading →

Rolling Out The New Data

By Charles Boccadoro

“The only thing that makes life possible is permanent,

intolerable uncertainty; not knowing what comes next.”

Ursula K. Le Guin

Our big MFO Premium upgrade, as described in last month’s commentary, went live on 9 November. Most obvious are the expanded evaluation periods, which include year-to-date (YTD) and latest month performance metrics. In the days ahead, subscribers will see many new parameters from our expanded database, as was evidenced today with the rolled-out of an Interval Funds screening flag in the MultiSearch tool.

The folks at Gaia Capital requested we add the screen for this new type of mutual fund. Per Lipper, Interval Funds are a hybrid mutual fund structure that falls Continue reading →

Largest Upgrade Yet To MFO Premium

By Charles Boccadoro

“In God we trust,

all others bring data.”

William Edwards Deming

Beginning with our October monthly data update to MFO Premium, we will incorporate one of largest improvements to the site since launching our beta version in November 2015, three years ago.

The improvements began, like most of the features on the site, by user requests … this time, for more evaluation periods. All risk and performance metrics will now be provided for Continue reading →

#MFTF

By Charles Boccadoro

“But we in it shall be remembered —

We few, we happy few, we band of brothers …”

                                                  Shakespeare

Nearly 400 civilians and military participated on September 29th in the 7th annual March for the Fallen event at Fort Indiantown Gap’s army training campus. The march honors fallen soldiers that have “given the ultimate sacrifice,” so that “we can watch the sun come up like we see on this beautiful fall morning over a free country,” stated Major General Anthony Carrelli at the 6am welcome ceremony.

More than 110 of the Continue reading →

Launch Alert – Litman Gregory Masters High Income Alternatives Fund (MAHIX, MAHNX)

By Charles Boccadoro

The folks at Litman Gregory Fund Advisors, LLC, of Walnut Creek, California are excited to launch their High Income Alternatives Fund, which “seeks to generate a high level of current income from diverse sources, consistent with the goal of capital preservation over time.”

After months of advisor selection and due diligence, the fund will launch September 28, 2018. Here are links to recently published fund commentary/fact sheet and webinar registration. The webinar will occur Continue reading →

Trend

By Charles Boccadoro

We’ve added Trend Metrics to the MultiSearch tool on MFO’s Premium site.

Trend Metrics signal when funds are performing above or below their 3- and 10-month simple moving averages (SMAs). If the Trend Metric is positive, the strategy suggests staying invested. If negative, exiting the position. The strategy has proved effective at mitigating severe drawdown, especially during periods of longer term trends, like experienced Continue reading →

Introducing Ferguson Metrics

By Charles Boccadoro

Ferguson Metrics help identify funds with equity-like returns but volatility that makes them “easier for investors to own through turbulent times,” describes Brad Ferguson of Halter Ferguson Financial, a fee-only independent financial advisor based in Indianapolis. They serve as a starting point for delving deeper, but also as litmus test when salespeople offer him funds to include in the firm’s portfolios.

There are three main metrics in Brad’s Continue reading →

Zeo Short Duration Income (ZEOIX), July 2018

By Charles Boccadoro

“Perhaps time’s definition of coal is the diamond.”

Kahlil Gibran

Objective and Strategy

The Zeo Short Duration Income Fund (ZEOIX), previously known as the Zeo Strategic Income Fund, is a non-diversified, actively managed, total return, fixed-income fund that seeks …

  • “ … to deliver low volatility, risk-managed solutions for the prudent investor.”
  • “ … low volatility and absolute returns consisting of income and moderate capital appreciation.”
  • “ … long-term capital preservation, income and moderate capital appreciation across market environments.”
  • “ … low volatility, absolute returns in a long-only fixed income portfolio.”
  • “ … to deliver a consistent, low-volatility risk profile suitable for both short and long time horizons.”
  • “ … to deliver low volatility.”

Clearly, ZEOIX’s focus is Continue reading →

Update on MFO Premium

By David Snowball

Charles sends his regrets for being unable to join us this issue, but he’s retreated deep underground to the MFO Premium command center.

At Charles’s request, the good folks at Thomson Reuters have substantially (vastly, enormously) expanded the amount of data they provide each month. The new datafeed will not only allow MFO Premium users to access a new level of detail about the composition and performance of mutual funds and ETFs, but it will also allow us to expand our coverage to closed-end funds and insurance products. Continue reading →

Premium Site Update – Much Expanded Data Feed

By Charles Boccadoro

“I’ve come loaded with statistics, for I’ve noticed that a man can’t prove anything without statistics.”

                                                                                              Mark Twain

We launched our premium site in November 2015. Its origin stems from our desire to identify funds that minimized downside performance across full market cycles, using metrics and evaluation periods not readily available on other sites at that time. Parameters of interest included maximum Continue reading →

Democratizing Quant: An Update on Alpha Architect

By Charles Boccadoro

“In investing, what is comfortable is rarely profitable.”

        Robert Arnott

“An investment in knowledge pays the best interest.”

        Benjamin Franklin

MFO profiled Alpha Architect’s US Quantitative Value ETF  (QVAL) in December 2014, shortly after the fund’s launch and after our colleague, Sam Lee, praised QVAL’s strategy in a Morningstar piece, entitled “A Deep Value Quantitative Hedge Fund Strategy.” The firm’s CEO Wes Gray first impressed us during his presentation “Beware of Geeks Bearing Formula” at Morningstar’s ETF Conference in Chicago earlier that same year.

I had a chance to visit Wes, his partner and CIO/CFO Jack Vogel, and the rest of his team recently at the Alpha Architect office in Broomall, Pennsylvania. The picturesque town is nearby Bryn Mawr, Haverford, and Swarthmore Colleges; Villanova and Drexel Universities; and The Wharton School of University of Pennsylvania. Wes earned his PhD from University of Chicago, with Nobel Prize Continue reading →

AlphaCentric Income Opportunities Fund (IOFIX), February 2018

By Charles Boccadoro

“Timing, perseverance, and ten years of trying

will eventually make you look like an overnight success.”

        Biz Stone

Objective and Strategy

The AlphaCentric Income Opportunities Fund seeks to provide current income. Presently, it invests in often overlooked (some call “pejorative”) segments of non‐agency (private label) residential mortgage-backed securities (RMBS), specifically in seasoned (2007 or earlier) subprime mortgages with floating rate coupons.

The irony is that 10 years after the housing collapse these bonds, once highly discounted if not feared worthless, represent one of the more sought after asset classes, as described nicely in Claire Boston’s Bloomberg Continue reading →

Morningstar ETF Conference – Chicago 2017

By Charles Boccadoro

“If someone invented levitation tomorrow, it would still take five years to catch on.”

             Alan H. Epstein

The last panel, entitled “Meet the Pundits,” enjoyed a winner’s circle atmosphere this year. It included Barron’s Crystal Kim, Morningstar’s Ben Johnson, Matt Hougan of Inside ETFs , Tom Lydon of ETF Trends , and Continue reading →

Rolling Averages, Finally!

By Charles Boccadoro

“Maybe the mind’s best trick of all was to lead its owner to a feeling of certainty about inherently uncertain things.”

        Michael Lewis’ The Undoing Project

Took a while, but we’ve finally added rolling average analysis to the MFO Premium site.

The new Rolling Averages tool provides insight into how returns vary for selected rolling periods of interest. Each period overlaps the next, separated by one month, across the life of the fund. This insight is especially important when establishing expectations based on an investor’s risk tolerance and time-line, as it reveals Continue reading →