Category Archives: Mutual Fund Commentary

Artisan Developing World Fund interview

By Devesh Shah

An interview with Lewis Kaufman, founding portfolio manager of the Artisan Developing World Fund

My primary investment biases are two-fold. First, in general, I invest in public markets through low-cost, low-turnover passive vehicles. Second, in general, I invest in US equities. Both of those biases were arrived at through a combination of (painful) experience and careful research. That said, none of us benefit from being held hostage by our beliefs. In many ways, humility and self-doubt, curiosity, and the determination to keep learning are the hallmarks of our wisest citizens. And I aspire to learn from them. In consequence, I’ve spent a huge amount of time over the past six months talking with a cadre of the industry’s best emerging markets managers.

Home Bias

Investors worldwide have a powerful bias Continue reading →

The Tide Is Going Out

By David Snowball

“It’s like the tide going out; you’re starting to see all the things that have been waiting to happen,” David Sherman of Cohanzick Management, 15 March 2023 web call summary.

David Sherman is one of the industry’s most consistently successful fixed-income investors. He founded Cohanzick Management on the premise “return of capital is more important than return on capital.” His specialty is the pursuit of distinctive, low-risk diversifying strategies for fixed-income investors. “We try to focus on what we know and what we do well. We do not pursue investment ideas or strategies that are Continue reading →

Briefly Noted…

By TheShadow

Updates

Vanguard launched its Short-Term Tax-Exempt Bond ETF on March 9th. The ETF will optimize tax efficiency for investors seeking to allocate to the shorter end of the municipal bond market. It predominantly invests in short-term investment grade municipal bonds and will track the S&P 0-7 Year National AMT-Free Municipal Bond Index. It has an expense ratio of Continue reading →

March 1, 2023

By David Snowball

Dear friends,

Welcome to Spring. Some diehards erroneously insist that they’re “officially” winter-bound until the Spring equinox, March 20th this year. It need not be so.

There are two springs. Meteorological spring, which is aligned with temperatures and growing seasons, is March 1st. Astronomical spring, which is aligned with the wobble of the earth on its axis (called “precession”), begins with the Continue reading →

Looking Beyond 2023 Investing – Lies and Statistics

By Charles Lynn Bolin

Mark Twain wrote in 1907, “There are three kinds of lies: lies, damned lies, and statistics.” The differences in opinion about soft or hard landings center on how trends are measured, data accuracy, revisions, seasonal adjustments, and which data to follow. I provide Chart #3 of what I am monitoring over the next six months as the story about soft or hard landings unfolds. Continue reading →

Interview with Amit Wadhwaney: Co-Founder and Portfolio Manager, Moerus Capital Management

By Devesh Shah

Recently, I had a long chat with Amit Wadhwaney, the founder of Moerus Capital Management and the adviser to Moerus Worldwide Value Fund. He is a very thoughtful and seasoned investor. Here are some of his thoughts on his fund and his stock-picking style. I’ve presented a summary of my notes rather than an actual Q&A, but the flavor of their investing style will hopefully come through. Continue reading →

Just short of two cheers for active, international investing

By Devesh Shah

Readers know that I long ago concluded that active management rarely adds value to an investor’s portfolio. There are too many managers fighting over the same stocks. Very few of them have a meaningful Edge over the others. Most of those who add some value rarely add enough to overcome the drag imposed by their expenses and higher tax burden. Some few add serious value, but they are almost impossible to reliably identify in advance.

That said, I am about to commit two heresies in one column: I will suggest that you consider Continue reading →

To Sell or Not to Sell? (REMIX, PQTAX, GPANX, COTZX)

By Charles Lynn Bolin

This is my annual assessment of the funds that I own and whether it makes sense to hold them with my annual outlook, as described in this month’s companion article. My outlook is “Risk Off” because of economic uncertainty, plus bonds are now paying an attractive yield. The funds assessed in this article exclude bond funds, individual stock, and American Century Advantis All Equity Markets (AVGE). As interest rates rose and stocks and bonds fell, I gradually sold my most volatile funds and bought short-term ladders of certificates of deposit and Treasuries to lock in higher yields. With interest rates higher, I now ask myself, would I rather own my remaining funds in my intermediate buckets or make four or five percent in safer investments? That is the question.

I use the “Bucket Approach” and have Fidelity Wealth Management manage my longer-term portfolios, which collectively resemble Continue reading →

Briefly Noted

By TheShadow

Updates

Ariel Funds picks up a new team and two new strategies. Henry Mallari-D’Auria, previously the CIO of emerging markets value at AllianceBernstein, will join the firm in April. Four of his colleagues have moved with him, and they have plans to build the team out more. Ariel’s co-CEOs note that “a dedicated EM strategy became our next natural product extension.”

In addition, Ariel intends a most un-Ariel move in launching a global long/short strategy led by Micky Jagirdar, who is already the firm’s head of global equities.

Driehaus Funds has filed an SEC registration filing for Continue reading →

February 1, 2023

By David Snowball

Dear friends,

Welcome to February. It’s a month we associate with love, St. Valentine’s Day. As holidays go, it’s another triumph for the marketers. The holiday began life as a Roman fertility festival, Lupercalia, and its attendant parties. Eventually, the Christian church made the same move here as they did with the pagan year-end festival; they repurposed the December solstice festival into Christmas and the February fertility festival into St. Valentine’s Day. The moves gave them one more tool for converting party-loving pagans into … well, party-loving Continue reading →

One of a Kind: American Century Avantis All Equity Markets ETF (AVGE)

By Charles Lynn Bolin

My last article on Seeking Alpha suggested that value, international, small caps, and emerging markets would outperform over the coming years. David Snowball wrote “The Investor’s Guide to 2023: Three Opportunities to Move Toward” last month along the same lines and offers his insight into these asset classes along with some excellent funds. I follow the Bucket Approach, where some Buckets have similarities to Dr. Snowball’s “Terrified Investor,” “Exhausted Investor,” or “Enterprising Investor.” A Reader on Seeking Alpha asked my opinion about Continue reading →

Richard Cook, “Where there’s mystery, there’s margin”

By David Snowball

I’m a sucker for an intriguing headline, and CityWire’s John Coumarianos came up with a doozy: “EM managers had (another) year to forget. But one fund defied the gloom” (1/9/2023). The triumphant reveal was:

only one out of the 816 funds in the Morningstar Diversified Emerging Markets category with a 2022 track record posted a positive number. That was the relatively unknown Cook & Bynum fund (COBYX), which returned 9.29%. Continue reading →

In Defense of Taking Risk

By Devesh Shah

The S&P 500 Index peaked at 4800 in December 2021. Thirteen months later, at the end of January 2023, the Index is down 16%, at a level of 4076. Suppose you did a Rip Van Winkle and woke up just in time for the New Year 2024 celebration… and found the S&P 500 index trading at 2400, putting the index 50% below its all-time peak. Would you buy the market, perhaps doze off again, or would you sell? The record is clear: Continue reading →

Launch Alert: Matthews Emerging Markets ex-China Active ETF

By David Snowball

On January 11, 2023, Matthews Asia launched Matthews Emerging Markets ex China Active ETF (MEMX). It is an actively managed ETF that might invest in every country in the world except China, the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore, and most of the countries in Western Europe.

Our January issue originally, and mistakenly, suggested that the fund had launched on 12/31/2022. That was corrected as soon as Matthew’s representatives let us know of the error. Our regrets!

The fund will be Continue reading →

Briefly Noted

By TheShadow

Updates

The sad saga of Phaeacian Global Value and Phaeacian Accent International Value funds rolls on long after the funds’ liquidation. As MFO readers know, both started life as (entirely excellent) FPA funds. FPA and the managers negotiated a deal with London-based Polar Capital for the funds and their teams to be adopted by Polar under the Phaeacian brand. In principle, the deal made sense for both parties, with the funds receiving broader distribution and FPA receiving a revenue-sharing agreement and a chance to refocus on their core products.

In reality, the partnership Continue reading →

January 1, 2023

By David Snowball

Dear friends,

Welcome to winter.

Dame Edith Sitwell, a poet and crank, observed, “Winter is the time for comfort, for good food and warmth, for the touch of a friendly hand and for a talk beside the fire: it is the time for home” (Taken Care Of: An Autobiography (1965)).

How could you not be drawn to someone who said of herself, “I am not eccentric. It’s just that I am more alive than most people. I am an unpopular Continue reading →

Long-dated TIPS bonds: A margin of safety

By Devesh Shah

Happy New Year to everyone. May there be peace in your home, on the planet, in the stars, and in all living beings. I am very glad to share that I have recently published a book of children’s stage plays.

Growing up in Mumbai, India, I studied at a school where theatre and drama were an important part of our education. Many of our school plays were then drawn from English literature. A few years ago, I was asked to take on a project to translate nine plays written in Gujarati, my first language, to English. Acclaimed playwright Prakash Lala wanted to make his stories available to young children everywhere. The average 10-12-year-old child in India has a different upbringing than the American kid. Family, grandparents, household help, and even neighbors play a much larger role in raising the kid than we see in society here. I’ve enjoyed translating the plays, working with my own kids on editing, and recently publishing the book on Amazon. Look for the title “Nine Children’s Plays.” I hope you will Continue reading →