Category Archives: Briefly Noted

Briefly Noted

By TheShadow

Not a major surprise, but there are a load of active ETFs in the pipeline.  Fidelity has launched Fidelity Tactical Bond ETF. John Hancock will have John Hancock International High Dividend, and Hartford is launched Hartford Sustainable Income, managed by a team from Wellington. iShares is launched an active U.S. Consumer Focused ETF, but such funds have always felt a bit gimmicky to us. Finally, Neuberger Berman Commodity Strategy Fund is becoming an ETF on or about October 21, 2022.

Akre ups international flexibility. Effective November 28, 2022, Continue reading →

Briefly Noted . . .

By TheShadow

Fallen angels: “The Securities and Exchange Commission today charged Atlanta-based Angel Oak Capital Advisors, LLC and its portfolio manager Ashish Negandhi for misleading investors about the firm’s fix-and-flip loan securitization’s delinquency rates. Angel Oak and Negandhi have agreed to settle charges and pay a penalty of $1.75 million and $75,000, respectively” (sec.gov, 8/10/22). Angel Oak advises a series of mutual funds whose activities, so far as we can tell, are completely unaffected by the SEC action. That said, Continue reading →

Briefly Noted . . .

By TheShadow

ARK Transparency ETF will liquidate on or about July 26. Poster/Contributor Yogibear noted that the official reason for the closure was due to the Transparency Index provider, Transparency Global, discontinuing the index utilized for the ETF. ARKK was unable to find a replacement. The ETF was launched approximately eight months ago when it commenced operations on December 8, 2021.

Champlain Emerging Markets Fund was closed to Continue reading →

Briefly Noted…

By TheShadow

Note to our readers:

On June 3, AlphaCentric and Garrison Point, investment advisor and sub-advisor respectively, to the AlphaCentric Income Opportunities Fund, were fined by the SEC for failing to implement its compliance policies and procedures concerning its role in valuing fund securities. From May 2015 through July 2015 and from January 2017 through February 2019, AlphaCentric failed to implement policies requiring it to assist with the process of determining the fair value of the fund holdings. According to the order, Continue reading →

Briefly Noted…

By TheShadow

Allianz Global Investors admitted to one count of criminal securities fraud in relation to its Structured Alpha Funds. This admittance resulted in a 10-year ban on Allianz advising on any mutual funds in the U.S.

AllianzGI has agreed to pay more than $1 billion in penalties and $5 billion in compensation to investors.  The Structured Alpha funds suffered huge losses during the Covid episode in March 2020.  The funds offered complex hedge strategies that were intended to Continue reading →

Briefly Noted . . .

By TheShadow

Artisan Partners launched its Artisan Global Unconstrained and Artisan Emerging Markets Debt Opportunities Funds on April 7. Michael Cirami will be the Lead Portfolio Manager while Sarah Orvin will serve as the Portfolio Manager of both funds. Both Mr. Cirami and Ms. Orvin previously worked for Eaton Vance Management.

Charles Schwab has filed filings to offer Direct indexing, which involves direct ownership of securities and thus can involve a greater level of tax management, sometime in April. Schwab’s direct indexing will have an account minimum of $100,000 and will charge a fee of 40 basis points. Initially, investors will have access to Continue reading →

Briefly Noted . . .

By TheShadow

DoubleLine Capital, Jeffrey Gundlach’s $137bn asset management firm, has received approval from the Securities and Exchange Commission (SEC) to launch two active non-transparent ETFs.

The company initially filed for the strategies – the DoubleLine Opportunistic Bond ETF and the DoubleLine Shiller CAPE US Equities ETF – in October 2021. The funds have expense ratios of 0.5% and 0.65%, respectively.

The funds will not disclose assets Continue reading →

Briefly Noted

By TheShadow

Updates

On February 17, the Securities and Exchange Commission charged James Velissaris, the former Chief Investment Officer and founder of Infinity Q Capital Management, with overvaluing assets by more than $1 billion while pocketing tens of millions of dollars in fees.

The SEC’s complaint alleges that, from at least 2017 through February 2021, Velissaris engaged in Continue reading →

Briefly Noted

By TheShadow

Hi! The Shadow here! I scan SEC filings and other sources for interesting industry developments to share with you. If you see something that you think we should share with readers in the month ahead, drop me a heads-up. If we use it, we’ll happily send an intensely stylish MFO mug to you!

Updates

Smead International Value Fund commenced operations on January 11, 2022. It’s the international version of the five-star Smead Value Fund (SMVLX), and it’s managed by Continue reading →

Briefly Noted

By David Snowball

Updates

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 →

The Briefly Noted Omnibus

By David Snowball

Artisan Partners has filed to launch two new funds: Artisan Emerging Markets Debt Opportunities Fund and Artisan Global Unconstrained Fund. Artisan routinely interviews 10-20 management teams a year, folks interested in becoming partners. Their rule has always been, “only hire category-killers.” In this case, the assassins (or defectors, according to a colleague) in question, formerly managed Eaton Vance Global Macro Absolute Return Fund. That fund, curiously, didn’t appear to be killing anything but Continue reading →

Briefly Noted

By David Snowball

Updates

The Ivy Fund liquidations announced in September 2021 and October 2021 have been temporarily suspended. No word on why or when the executions will proceed.

Briefly Noted . . .

The Cook & Bynum Fund modified their prospectus to flag a new risk factor, one that’s likely unprecedented in the industry: Risk of Current Focus on Breweries and Soft Drink Bottling and Distribution. The adviser allows that they hold “from time to time, a Continue reading →

Briefly Noted…

By David Snowball

Updates

And the beat goes on. Five more mutual funds are becoming ETFs. On October 22, 2021, the Adaptive Fundamental Growth Fund, Adaptive Hedged High Income Fund, Adaptive Hedged Multi-Asset Income Fund, Adaptive Tactical Outlook Fund, and Adaptive Tactical Rotation Fund will be converted into the AI Quality Growth ETF, Adaptive High Income ETF, RH Hedged Multi-Asset Income ETF, RH Tactical Outlook ETF, and RH Tactical Rotation ETF, respectively. While the names and structure change, the investment strategies do not.

DFA is dancing to that very beat. Two more active DFA mutual funds have converted to ETFs: Dimensional International value ETF (DIV) and Dimensional DFA World ex US Core Equity 2 ETF (DFAX). That brings the DFA tally to Continue reading →

Briefly Noted

By David Snowball

Updates

Effective immediately, Neuberger Berman Commodity Strategy Fund‘s investment strategy will permit the fund to invest up to 5% of its assets in cryptocurrency investments through bitcoin futures and investments in the securities of exchange-traded funds organized and listed for trading in Canada to gain indirect exposure to bitcoin.

WisdomTree Cloud Computing Fund, an active ETF, now solemnly swears not to invest in … you know, weapons systems, coal, or tobacco. In short, it’s declared itself to be Continue reading →

Briefly Noted

By David Snowball

Updates

AMG River Road Long-Short is no more. At an as-yet-unspecified date following the inevitable shareholder approval, the $20 million / four-star AMG River Road Long-Short Fund will be wiped away, with its regulatory paperwork giving rise to AMG River Road International Value Equity Fund. Its portfolio (which has only 5% international equity exposure) will be liquidated and replaced with a new all-cap, absolute value portfolio. The new managers will be Continue reading →

Briefly Noted

By David Snowball

Updates

The fund-to-ETF train appears to be leaving the station.

On May 7, 2021, the Adaptive Growth Opportunities Fund became the Adaptive Growth Opportunities ETF.

At some time in the third quarter of 2021, Water Island Long/Short Fund will become the AltShares Event-Driven ETF. That’s a more convoluted change since the fund will change Continue reading →

Briefly Noted

By David Snowball

Updates

A Gold medal for T. Rowe Price: Morningstar has upgraded their assessment of T. Rowe Price’s Retirement Series funds to Gold, their highest endorsement. It’s an endorsement we share. Twenty-four of T. Rowe Price’s funds – including many of the retirement date funds – earn our “Great Owl” designation for consistently top-tier risk-adjusted-performance. We have recognized the firm Continue reading →

Briefly Noted

By David Snowball

Updates

On March 26, 2021, Guinness Atkinson Asia Pacific Dividend Builder Fund (GAADX) and the Guinness Atkinson Dividend Builder Fund (GAINX) were converted into ETFs.

Following the model pioneered by GA, Adaptive Fundamental Growth Fund, Adaptive Hedged High Income Fund, Adaptive Hedged Multi-Asset Income Fund, Adaptive Tactical Outlook Fund, and Adaptive Tactical Rotation Fund are being converted into the Adaptive Fundamental Growth ETF, Adaptive Hedged High Income ETF, Adaptive Hedged Multi-Asset Income ETF, Adaptive Tactical Outlook ETF, and Adaptive Tactical Rotation ETF, respectively.

DFA, the other firm Continue reading →

Briefly Noted

By David Snowball

Updates

On the value of actual human intelligence: The decade’s biggest fund scandal broke on Monday when the SEC accused the advisor of Infinity Q Diversified Alpha Fund (IQDNX) of “adjusting the methodology for obtaining certain asset valuations.” James Velissaris, founder and CIO, was placed on administrative leave while the investigation continues.

The remnants of the fund’s website describe it this Continue reading →

Briefly Noted

By David Snowball

Updates

Eric Heufner, president of Grandeur Peak Global, shares the sad news of the death on January 21, 2021, of one of his colleagues.

It is with great sadness that we announce the death of our dear friend and colleague, Keefer Babbitt. Keefer was not only a great partner and friend, he also set the bar extremely high as it relates to his work. His character, work ethic, depth of thought and the quality of his output were greatly admired by all of us at Grandeur Peak. Keefer joined Grandeur Peak in 2012 as one of our first interns, and over the past 8+ years he has been a true builder of our firm. He made an enormous difference here and he will be greatly missed.

Keefer’s current roles included co-managing the Global Contrarian Fund alongside Mark Madsen and Robert Gardiner, co-managing the Global Reach Fund with six other portfolio managers, contributing on our Industrials team, and of course first and foremost serving as a global research analyst. Given our unique team-based approach, we do not anticipate making any immediate changes to the portfolio management of either fund.

Continue reading →