Category Archives: Mutual Fund Commentary

Rebalancing, Portfolio Restructuring, Tax Loss Harvesting

By Devesh Shah

Down years in the financial markets are a heavy burden on asset holders. (We presume you’re noticed.) Holding assets through down years is the price we pay for earning long-term risk premia embedded in assets. Years like this are particularly challenging because the current downswing feels so very abnormal: it’s a correction in the financial markets (normal but painful) in which both investment grade bonds and speculative tech stocks are falling sharply and simultaneously (utterly abnormal and still painful), and the trajectory of the decline Continue reading →

Shining the Light into Black Box Funds

By Charles Lynn Bolin

Source: PublicDomainPictures.net

A reader on the Mutual Fund Observer Discussion Board asked “how do you feel about putting monies into funds that have a somewhat ‘black box’ dynamic to them…yes, they explain their positions but sometimes I wonder, how safe of an investment are some of these funds?”

For those not familiar with black box investing, Investopedia explains: “a black box is a device, system, or object which produces useful Continue reading →

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 →

September 1, 2022

By David Snowball

Dear friends,

Welcome to the end of summer. Traditionally, in the markets and on college campuses, it’s a quiet time of year. Trading volumes drop, traders and sensible people alike flock to beaches, and facilities crews at colleges like Augustana work 12-hour days trying to address all the issues that can’t be dealt with in a college jammed with people.

But come this first weekend of September, a new chapter begins … Continue reading →

Here be dragons: Data-driven caution for the market ahead

By Charles Lynn Bolin

Medieval world maps were speculative documents, incorporating what the cartographer knew to be true, but that often left a lot of blank space on the map. The places where the mapmaker could offer only uncertain guidance were marked with the Latin legend “Hic sunt dracones.” That is, “here be dragons.”

To be clear, these were not stupid or credulous guys. They were just guys who knew the world was a dangerous place, and the uncharted regions were Continue reading →

Emerging Markets Investing in the Next Decade: The Players

By Devesh Shah

Who, from a universe of 200+ emerging markets managers, did we choose to speak to … and how?

Good question! We decided to rely on insiders’ judgment, rather than mere notoriety or a strategy’s recent performance. We started by talking with Andrew Foster about his take on his investable universe and its evolution, then asked Andrew whose judgments he respected and who we ought to talk with. We asked those folks the same. Those recommendations, constrained by time and availability, led to conversations with the six worthies below. Continue reading →

Emerging Markets (EM) Investing in the Next Decade: The Game

By Devesh Shah

Is it time to overweight EM stocks now? To answer this and many other questions, the Mutual Fund Observer reached out to six EM Equity Fund Managers. Our plan was to talk with each at length, sharing one manager’s insights with another and seeking their response. Our hope was to help you gain an insight deeper than “boy, EM valuations sure are low! Time to buy, right?”

I am deeply grateful to them for helping our readers further their understanding. This essay will walk you through their arguments and our reflections on what EM investors might 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 →

August 1, 2022

By David Snowball

Dear friends,

Chip and I escaped for a bit this month. We headed northeast to Door County, the peninsula that extends above Green Bay, Wisconsin. Like the Dingle Peninsula in Ireland, Door County represents “my happy place.” For folks unfamiliar with it, imagine a less commercialized version of Cape Cod: water on both sides, farms in between, cherries everywhere, no chain restaurants at all, and a series of small lakeside or bayside towns whose permanent populations number in the hundreds.

Here was the plan: disconnect from the outside world, Continue reading →

An ESG Primer

By Mark Freeland

There are days when the world seems unnecessarily out of whack. Runways in London are melting, doctors and pharmacies are denying basic legal reproductive care to women because of fear of prosecution, and corporations are hiding more and more dark money contributions.   It doesn’t matter where you stand politically; both parties are rollicking in the dark. Many people are working to make the world a better place, and many more seem stunned and appalled. One of the strategies that was very much in vogue last year was Continue reading →

Retirement Planning in the Shadow a Recession

By Charles Lynn Bolin

I am now in my fourth week of retirement. This article is the third of a three-part series describing my experiences as I retire. It builds upon “Certainty of Death and Taxes,” where I describe how taxes, social security, and Medicare may impact retirement financial plans. The topics covered in this article are:

  1. Investment Environment: A recession is becoming more likely in 2023
  2. Sequence of Return Risk: How a recession early in retirement can damage retirement plans
  3. Tax Efficiency: Optimizing lifetime after-tax retirement income
  4. Withdrawal Strategy: Using a basket of accounts to reduce taxes
  5. Investment Strategy: The extended Bucket Strategy

Continue reading →

I wish I could give you some good TIPS on beating inflation

By Devesh Shah

I’m not sure that I can. If I were to offer any tip, it might be to avoid TIPS.

The Problem: Inflation, TIPS, and Investment Frustration

Some investors (me included) bought Treasury Inflation Protected Securities (TIPS) to protect against rising inflation. Inflation has been raging in 2021-2022. Are you frustrated that shorter dated TIPS have made no money, while anyone who bought longer TIPS lost a bundle? All bonds lost money this year but TIPS were supposed to make money. And they didn’t. This very frustrating outcome is counterintuitive. In this article I take a look at Continue reading →

New Coke, the Ford Edsel, Cheetos Lip Balm and Morningstar Investor

By Editor

By Don Glickstein, the author of this article, which we’ve posted for him.

(Editor’s note: Glickstein worked for a decade as a reporter and editor on daily newspapers, and he won a National Press Club award for consumer journalism. He dipped his toes into politics as a campaign press secretary for the late Washington Gov. Booth Gardner. He later worked for nearly three decades in communications for what was then the nation’s largest consumer healthcare cooperative, now part of Kaiser Permanente. While there, he served as an intranet webmaster reaching 10,000 employees. His book, After Yorktown, was named one of the 100 best books ever written about the Revolution by the Journal of the American Revolution.) 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 →

July 1, 2022

By David Snowball

Dear friends,

As you read this, Chip and I will be on vacation in Door County, the idyllic peninsula just north of Green Bay, Wisconsin. While I’m sure there have been years when she and I more needed time away, I surely cannot remember when. I was introduced, this year, to the term “trauma-informed pedagogy” and to the realization that perhaps three-quarters of our young people have taken a few more hits than they’re currently capable of managing.

Having managed their mental health for the past year, we’re going to work on our own for Continue reading →

Confession is good for the soul, honest reflection is even better: My mid-year review

By Devesh Shah

Irresponsibility might not be the gravest sin committed by internet pundits, but it’s surely one of the most widespread. We are forever regaled by advice from “the strategist who called the 2008 crash” has announced the 2022 recession will be worse than 2008, though we are spared the messy details about the source’s other 49 missed guesses. It’s the nature of the internet that Continue reading →

Retirement Part 1: The Certainty of Death and Taxes

By Charles Lynn Bolin

“Things as certain as death and taxes can be more firmly believed” was written by Daniel Defoe in “The Political History of the Devil” in 1726. Benjamin Franklin wrote, “In this world, nothing can be said to be certain, except death and taxes” in 1789. Few subjects I have written about elicit such a passionate response as “Roth Conversion” and “Deferring Social Security Benefits.” This article is the first of a three-part series describing Continue reading →