Category Archives: Mutual Fund Commentary

November 1, 2019

By David Snowball

Dear friends,

It’s November 1, the traditional beginning of the holiday avoidance season. It’s the time of year when I program-out the local radio stations (not listening to you, Mix96) that switched to the 24/7 Christmas music today and the big box retailers who have declared that November 1 is Black Friday. (Looking at you, Kohls.) I will, with all my might, avoid their tinsel-festooned commercial caverns all of this month, and as much of next as I might.

That’s not because I dislike the year-end holidays. No, quite to the contrary: I’ve always embraced the communal spirit of celebration, the defiance Continue reading →

Living a Rewarding Retirement

By Robert Cochran

Some Thoughts on Social Security, Medicare, and the Markets

I’ve been officially retired for just more than two years. During that time, I have been asked numerous times about when to take Social Security retirement benefits. My general response is that it pays to delay receipt of benefits to age 70. After that, there is no incentive to delay other than potential income taxes.

A recent study, “The Retirement Solution Hiding in Plain Sight” by United Income (June, 2019), indicates most people would say “yes” to making one simple retirement planning decision that could mean more income during retirement. But the same study shows that 96% of retirees take their first Social Security check at Continue reading →

Limiting Choices

By Charles Lynn Bolin

Oddly enough, the most time-consuming part of investing for me is limiting my choices. To simplify and streamline the process, I looked at fund families with top performing mutual funds that are available as no-load funds with low minimum investments through Charles Schwab, Fidelity or Vanguard.

Investment Model

Hedge fund billionaire Ray Dalio, in our Continue reading →

Your holiday shopping list starts here: 15/15 funds

By David Snowball

The S&P500 posted, and the DJIA approached, new all-time highs at the end of October while unemployment remained at half century lows. And yet the health of the economy is so fragile that the Federal Reserve felt compelled to cut interest rates for a third time. Skeptics believe that effectively zero-to-negative interest rates is more likely to encourage corporate financial engineering than it is to encourage productive investment. Rupal Bhansali, manager of Ariel Global and Ariel International and now a member of the Barron’s Roundtable, warned that “the market, which had been on steroids, is now on Continue reading →

Castle Focus (MOATX)

By David Snowball

Objective and strategy

Castle Focus Fund seeks long-term capital appreciation. They have a bottom-up, absolute value focus, which means a ready willingness to hold substantial amounts of cash when they’re not able to find good companies selling at substantial discounts. The portfolio is typically comprised of 15 to 30 positions. Currently about 30% of the portfolio is in cash and about 30% is invested in non-US companies.

Adviser

Castle Investment Management, which is Continue reading →

Launch Alert: Avantis International Small Cap Value (AVDV)

By David Snowball

Between September 17 – September 24, 2019, Avantis Investors launched a series of five actively-managed ETFs. They are:

Avantis Emerging Markets Equity ETF AVEM, e.r. 0.33%

Avantis International Equity ETF AVDE, e.r. 0.23%

Avantis International Small Cap Value ETF AVDV, e.r. 0.36%

Avantis U.S. Equity ETF AVUS, e.r. 0.15%

Avantis U.S. Small Cap Value ETF AVUV, e.r. 0.25%

Because of the fundamental Continue reading →

Briefly Noted . . .

By David Snowball

Updates

GMO is now urging you to get comfortable with being uncomfortable. In a new GMO Insights piece titled “Emerging Market Stocks: Getting Comfortable with the Uncomfortable,” they look at how lackluster emerging market equity returns in recent years have led many to write off the asset class. They note that” value stocks within emerging markets are particularly cheap, trading at their largest discount since December 2001.” Profitably remains solid about EM corporations, despite the obvious headwinds.

Effective October 11, 2019, Inbok Song ceased Continue reading →

October 1, 2019

By David Snowball

Dear friends,

We live, indeed, in interesting times.

You might think you hear in that statement an echo of “an ancient Chinese curse, ‘may you live in interesting time.’” Yes and no. I was thinking of the phrase but it’s not ancient. Also not Chinese. It appears to have been invented in 1936 by a member of the British foreign service who was trying to sound … uh, profound.

The sentiment remains, though the source is not Continue reading →

Getting What You Paid For: High capture ratio funds

By David Snowball

Investors are interested in returns: the answer to the question, “how much are you going to make me?” Sophisticated investors are interested in how those returns are delivered.

Over the current market cycle, Fidelity Blue Chip Growth (FBGRX) has returned 10.7%, among the best of all funds. AMG Yacktman Focus (YAFFX) trails it at 10.5% and costs a lot more to boot (1.27% versus 0.72%). On surface, that’s pretty clear: Fido offers Continue reading →

Sideways Markets

By Charles Lynn Bolin

Every strategy should be evaluated not just on a “benefit of being right”, but at least as importantly, on a “cost of being wrong”, basis…

The Little Book of Sideways Markets, Vitaliy N. Katsenelson

I just finished The Little Book of Sideways Markets (2010) by Vitaliy N. Katsenelson. Mr. Katsenelson is a value investor, an author and CEO of a small but classy Colorado investment advisor; he offers a singularly engaging personal bio on his well-read Contrarian Edge blog. His two books cover the same ground, but are written for different audiences: professional (Active Value Investing) and lay (The Little Book of Sideways Markets). His concern here is with markets that can go up and down for 10 or 20 years and end up near where they started. In this article, I look at investing in a turbulent market which I believe will occur over the Continue reading →

Emerging Market Value investing revisited

By David Snowball

About a year ago we identified emerging markets value funds as one of the market’s few bright spots, at least if valuations are important. (And they are.) Since we published that story, three things occur to us.

  1. Some emerging markets value funds have, indeed, done well.
  2. The long-term case for emerging market value remains strong.
  3. The options for prospective EM value investors have become clearer

Continue reading →

Launch Alert: Grandeur Peak Global Contrarian

By David Snowball

Grandeur Peak Global Contrarian Fund (GPGCX) launched on Tuesday, September 17, 2019. It is Grandeur Peak’s first fund launch since 2015. Like the other core Grandeur Peak funds, Global Contrarian is capacity-constrained and will, in all likelihood, be closed to new investors in relatively short order. The exact strategy capacity, the Grandeur Peaks folks tell us, is hard to pin down because it’s affected by the liquidity of the names in the portfolio and the demands from some of the other GP funds whose portfolio overlaps it. Certainly more than $100 million, likely well under $300 million.

Of the seven Continue reading →

September 1, 2019

By David Snowball

Dear friends,

Egad! The fall semester has begun and my campus is swarming with students! Worst of all, they expect me to have something sensible to say at 8:30 Tuesday morning.  I’m doomed!

Snowball elsewhere

For those of you thinking, “yes, that’s all well and good, but what does Snowball sound like? Does he have an annoying twang in real-life like he does when I hear him in my head? I’m sure he’s got a guilty-looking Continue reading →

Adjusting Portfolios for the Business Cycle

By Charles Lynn Bolin

I appreciate the opportunity to write for Mutual Fund Observer. I am a great fan of MFO, and it is my primary investment tool. I am a small investor, an engineer with a MBA nearing retirement. I spent the majority of the past dozen years working overseas and used my spare time reading about history, economics, forecasting, and investing.

The data used in this article is current as of July 2019. As of August 24th, the S&P 500 has lost 5% bringing the 12 month return down to 1.5%. Meanwhile the Vanguard Total Bond Market (BND) is up 10% over the same period.  In this article, I look at risks to the financial markets and economy, how funds with varying allocations to stocks have done over the past 20 years, identify 36 top low risk funds with high risk adjusted returns, and create three hypothetical million dollar portfolios based on the current environment. Continue reading →

Launch Alert: Harbor Focused International

By David Snowball

On May 31, 2019, Harbor Funds launched Harbor Focused International (HNFIX/HNFSX). Harbor has eight international and global funds, of which three were either launched or relaunched this year. HNFIX is the most recent of those innovations.

Harbor Focused International will pursue capital appreciation. The fund will invest in 25-40 stocks from developed and emerging international markets. It will be an all-cap portfolio (minimum cap is just $1.5 billion) that is benchmark-agnostic. As a result, it might substantially overweigh some regions, sectors or styles if that’s what Continue reading →

Briefly Noted

By David Snowball

Updates

Three advisers are vying for this month’s “they’re doing what? Did I read this right?” award for moves where we were, literally, reading the filings aloud, slowly, to be sure we weren’t missing something.

Nominee #1 BlackRock

BlackRock Focus Growth (MAFOX) will undergo “a reorganization with another BlackRock-advised fund” in the fourth quarter of 2019. In the reorganization, the $1 billion, Continue reading →

August 1, 2019

By David Snowball

Dear friends,

Welcome to our annual summer seersucker edition of Mutual Fund Observer! Lots of folks are on vacation – we got nearly 200 “I’m on vacation! Huzzah!” auto-replies to our monthly announcement – and lots of folks are coping with unprecedented heat. The triple digit temps that toasted about two-thirds of the US in mid-July are being repeated across Europe now.

American cities are poorly prepared for heat waves; European cities are far more poorly constructed for them since their summer highs used to be 10-20 degrees cooler than what’s typical in the Continue reading →

Mauritius Madness

By David Snowball

The word of the week is “Mauritius.”

For those of us who dozed through World Geography we’ve highlighted the country in question.

Google kindly offers the following snapshot: “Mauritius, an Indian Ocean island nation, is known for its beaches, lagoons and reefs. The mountainous interior includes Black River Gorges National Park, with rainforests, waterfalls, hiking trails and Continue reading →