Category Archives: Mutual Fund Commentary

February 2024

By David Snowball

Dear friends,

February is a fraught month, historically. For Romans, it once did not exist. And then it did, as the last month of the year, with the new year beginning when the crops were first sewn and all eyes looked to the future. Februalia, the festival of purification, was the last chance to put the misdeeds of the past behind us and to be prepared to build a future upon a solid foundation.

It’s also the month in which Augustana launches its Spring semester; as I ponder the snow piles on campus, I could imagine a more Continue reading →

No, The 60/40 Portfolio Is Not Dead

By Charles Lynn Bolin

The reported death of the 60/40 portfolio is premature. It did suffer some serious illness as the stock market fell and interest rates rose last year. I help family and friends work with Financial Advisors to set up managed portfolios of mutual funds and exchange traded funds at Edward Jones, Fidelity, and Vanguard. Jeff DeMaso from The Independent Vanguard Advisor was kind enough to provide a Moderate Portfolio for this article. In this article, I am describing Continue reading →

Financial Discoveries: 10 Cool Things I Learned in January

By David Snowball

College professors are, quintessentially, learning machines. Give us 15 minutes of peace, and we’ll sink happily into piles of data, stacks of books, beckoning journal articles, or quiet processing.

And the reality of the matter is that almost no one gives anyone 15 minutes of peace these days.

Why 15 minutes? Read Mihaly Csikszentmihalyi, Flow: The Psychology of Optimal Experience (2008). Flow is a state of complete immersion in a project, and it seems to take us 15 minutes or so to get in the flow. Every “do you have just a minute?” kicks us back out and costs us another 15 minutes to get back.

Augustana’s January Term is Continue reading →

Patriotic Millionaires and the Uncertainty of Taxes

By Charles Lynn Bolin

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.

Benjamin Franklin, in a letter to Jean-Baptiste Le Roy, 1789

I read  Tax the Rich!: How Lies, Loopholes, and Lobbyists Make the Rich Even Richer by Morris Pearl and Erica Payne at the Patriot Millionaires. They are a Continue reading →

Snowball’s Indolent Portfolio, 2023

By David Snowball

Someone will always be getting richer faster than you. This is not a tragedy.

I’ve heard Warren say a half a dozen times, “It’s not greed that drives the world, but envy.”

Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?

Charles Thomas Munger (1924-2023)

Each year I share Continue reading →

Devesh, “My friends think I’m (a little) crazy” 2023 portfolio review

By Devesh Shah

In this article, I would like to talk about how I am allocating my portfolio. I want to note that every single fund I have positively highlighted in my MFO articles is also one of my portfolio holdings. My money is where my mouth is, and you, the reader, get the good with the bad. Take what’s useful to you and throw away the rest.

Market background in Q4 2023

For 18 months, from Feb 2022 and Oct 2023, it was Continue reading →

Briefly Noted . . .

By TheShadow

Updates

Vanguard is introducing new and enhanced intergenerational wealth and legacy planning capabilities through a partnership with Vanilla, an innovative provider of digital estate planning tools and solutions. The offer was successfully piloted to a small group of eligible advised clients in Vanguard Personal Advisor Wealth Management over the past year and will Continue reading →

January 1, 2024

By David Snowball

Dear friends,

Welcome to the January issue of Mutual Fund Observer.

January was named after Janus, the tutelary deity of the year’s first month. As tutelary, he was guardian, patron, and protector. Absent from the Greek pantheon, Janus was the Roman god of beginnings, transitions, and endings. It was the “transitions” part that led Romans to place the two-faced god near entries and passageways, where he oversaw their comings and Continue reading →

Asset Allocation and Withdrawal Strategies in Retirement

By Charles Lynn Bolin

I hope everyone had a chance to enjoy the holidays and spend time with family! I wish you a pleasant and prosperous new year.

I was preparing for my typical review of forecasts for the coming year and read an interesting discussion about allocation strategies on the MFO Discussion Board and redirected my efforts. The discussions centered around investment and withdrawal strategies. In this article, I will create Continue reading →

Celebrating the ongoing triumph of ESG investing

By David Snowball

James Mackintosh, who has always been adamantly skeptical of ESG/SRI/green investing (though less loudly opposed to anti-woke/red investing, perhaps because it’s so marginal), offered a nice analysis (“Green Investors Were Crushed. Now It’s Time to Make Money,” WSJ.com, 12/5/2023) of the declining popularity of ESG investing in 2023 and the challenges facing certain green energy firms.

“Invest according to your political views,” he begins, “and you’re Continue reading →

Standpoint Multi-Asset Fund (BLNDX / REMIX)

By David Snowball

Objective and strategy

The Standpoint Multi-Asset Fund seeks positive absolute returns through an “All-Weather strategy.” The fund holds a global equity portfolio built from regional equity ETFs. The strategy also invests, both long and short, in exchange traded futures contracts from seven sectors: equity indexes, currencies, interest rates, metals, grains, soft commodities, and energy. The managers attempt to participate in medium- to long-term trends in global futures markets and to produce a reasonable return premium in Continue reading →

Insane markets, anxious investors, sane asset allocation

By Devesh Shah

A winter walk around the Central Park Reservoir

My friend “W” and I have gotten into a good habit of taking an hour-long walk around the Central Park Reservoir every few months. An hour’s walk is a perfect amount of time when two people speak the same language, are willing to not pretend or live in a fantasy world, are willing to engage in a two-way honest communication, and then want to return to their lives.

W is one of the Continue reading →

Briefly Noted…

By TheShadow

Updates

The merger of the BlackRock Capital Appreciation Fund into the BlackRock Large Cap Focus Growth Fund, originally scheduled to occur by the end of 2023, has been delayed.

Several iShare ETFs, iShares Expanded Tech Sector ETF, iShares Expanded Tech- Software Sector ETF, iShares U.S. Pharmaceuticals ETF, iShares U.S. Healthcare Providers ETF, iShares Core S&P Mid-Cap ETF, iShares U.S. Financial Services ETF, iShares U.S. Healthcare ETF, iShares U.S. Consumer Staples ETF, iShares U.S. Transportation ETF. and iShares Semiconductor ETF will undergo a stock split. Shares of Continue reading →

December 1, 2023

By David Snowball

Dear friends,

Welcome to December. Welcome to Winter. It’s my favorite time of the year, despite the post-Covid haze that has enveloped me all week. Augustana is increasingly festive, ringing with the sounds of holiday concerts and celebrations, as well as the definite “click” of another semester coming to its close. My students, with their hummingbird-like metabolisms, are loathe to surrender their shorts and sandals even now.

We annually share the same simple reminder. Winter has always been a dark and drear span. The weather turns against us, and we retreat inward for protection. Gardens lay frozen. Workdays are framed by darkness: dark when we arise, dark when we Continue reading →

@MFOPremium Channel Demos Enhanced Chart Tool, Plus Fund Flows Preview

By Charles Boccadoro

We rolled-out our interactive Total Return Chart Tool last year, as described in Introducing MFO Charts. Recently, we integrated several new features, including enhanced styling, eliminated display restriction (previously based on youngest fund), and added a legend placement option. Here’s a Continue reading →

Launch Alert: T. Rowe Price Capital Appreciation & Income

By David Snowball

On November 29, 2023, T. Rowe Price launched the T. Rowe Price Capital Appreciation and Income Fund (PRCFX) after the longest gestation period in fund history. Normally, there’s a lag of 70 days between a fund’s initial SEC filing and its clearance to launch. In this case, the lag is 2,590 days. The fund was organized in October 2016, filed a full prospectus in September 2017, at which point T Rowe Price bought 10,000 shares, and appeared in all of the subsequent Statements of Additional Information filed annually with the SEC.

It’s clear this has been on the adviser’s mind and Continue reading →

In Conversation with Michael Cirami

By Devesh Shah

Missed Opportunity in Brazilian Interest Rates sowed the seeds of finding the right fund

Earlier this year, one of my friends, a doyenne of Currencies and Interest Rate trading, told me there was money to be made in Brazilian Real Local Government Bonds and interest rate products. In 2022, the Brazilian interest rate rose from 9.25% to a cycle high of 13.75%. Inflation was soaring there as in the rest of the world. A lot of traders lost money calling the highs in the rate high cycle and threw in the towel. Losses multiplied. But by the turn of the year, things were looking different. Inflation was coming down, the Central Bank had stopped raising rates in Sao Paulo and had Continue reading →

Launch Alert: GMO US Quality Equity ETF

By David Snowball

On November 13, 2023, the Boston-based institutional investment firm GMO, founded in 1977 as Grantham, Mayo, and Van Otterloo, launched their first retail product: GMO US Quality Equity ETF (QLTY). The actively managed fund will invest in a focused portfolio of “companies with established track records of historical profitability and strong fundamentals – high quality companies – are able to outgrow the average company over time and are therefore worth a premium price.” Expect a portfolio of about 40 names, with a 75% weighting in large-cap stocks and 25% in mid-caps. At 0.5%, the ETF charges the same expenses as the Continue reading →

Artisan and the Emerging Markets Debt Universe

By David Snowball

My colleague Devesh Shah sat down with Artisan’s Michael Cirami for a long conversation. Mr. Cirami is a managing director of Artisan Partners, a portfolio manager on the EMsights Capital Group, and lead portfolio manager for the Artisan Emerging Markets Debt Opportunities, Global Unconstrained, and Emerging Markets Local Opportunities Strategies. Two of those three strategies, Debt Opportunities and Global Unconstrained, are manifested in mutual funds.

Prior to joining Artisan Partners in Continue reading →

Searching For Inflection Points

By Charles Lynn Bolin

Jimmy and Rosalynn Carter – Habitat For Humanity. Source: Encyclopædia Britannica

In November, I began volunteering at the Loveland Habitat For Humanity, helping to build houses for those who might not be able to afford them without a hand up. Former President Jimmy Carter and First Lady Rosalynn have volunteered or worked with Habitat For Humanity since the 1980s. Housing prices have roughly doubled in the past ten years putting home ownership out of the reach of many potential buyers. I also volunteer at Neighbor To Neighbor, which helps those on the fringe of homelessness stay sheltered. Pandemic-era savings are expected to be depleted during the first half of 2024, but for many, losing work, even temporarily, can mean eviction, losing utilities, and going hungry. This puts a human perspective on financial Continue reading →