Category Archives: Mutual Fund Commentary

You Too Can Start an ETF

By Charles Boccadoro

At Tidal … The ETF Masters: Launch, Manage, and Grow Your ETF. We are an award-winning, full service ETF platform managing 183 ETFs in partnership with 68 issuers and responsible for $29bn+ AUM. Build Your ETF.

At ETF Architect … Want to easily create an ETF? Build, launch, and manage it with us. An Affordable, Turnkey, and Transparent White Label ETF Platform. Learn how we’ve helped innovative firms create new ETFs, convert separately managed accounts (SMAS), mutual funds, and hedge funds into ETFs, and tap the power of our platform to lower costs and streamline operations for existing ETFs. Create Your ETF. (Here’s an excellent presentation.)

Continue reading →

Lifetime Investment Strategies For Younger Investors

By Charles Lynn Bolin

“For the young the days go fast and the years go slow; for the old the days go slow and the years go fast.” – Anna Quindlen, Lots of Candles, Plenty of Cake: A Memoir of a Woman’s Life.

Secular bear markets with low returns along high volatility often deter younger investors from starting to invest, yet they offer tremendous buying opportunities. Prioritizing the long-term need to save for retirement over Continue reading →

Launch Alert: Virtus KAR Mid-Cap ETF

By David Snowball

On October 14, 2024, Virtus Investment Partners launched Virtus KAR Mid-Cap ETF (KMID). It targets “U.S. mid-cap companies with durable competitive advantages, excellent management, lower financial risk, and strong growth trajectories” selling at “attractive” valuations. The fund is managed by Jon Christensen and Craig Stone who also manage the five-star, $2.9 billion Virtus KAR Mid-Cap Core Fund. The ETF, like its sibling, will hold 25-35 stocks with a Continue reading →

Briefly Noted . . .

By David Snowball

Updates

The ETF end of the investment industry continues to be shaped by the mutual fund end. Jeff Benjamin at ETF.com reports “The mutual fund industry is setting new records for ETF conversions in 2024. According to Morningstar, there have been 55 ETF conversions this year through Dec. 17, which compares to 35 last year and 20 in 2022. The majority of the conversions this year have been in the fixed income space…” (“Mutual Funds Convert to ETFs at Record Levels,” ETF.com, 12/19/2024). The hottest trend has been the conversion of actively Continue reading →

December 1, 2024

By David Snowball

Dear friends,

Winter is coming.

I’m so thankful.

And welcome to the modestly delayed December issue of the Mutual Fund Observer.

Traditionally, year’s end has been a slower time. The growing season has ended, and both the farm fields and the sports fields lie mostly empty in this part of the country. Going out at night is just a touch less attractive when “night” settles Continue reading →

Investing in 2025 And the Coming Decade

By Charles Lynn Bolin

It is that time of the year for the prognosticators to make their forecasts of what the markets will be like next year and perhaps for the adventurous few to project out the next ten to thirty years. “Do I have enough saved to retire if the stock and bond markets do not keep up with inflation for twenty years?” It is not a rhetorical question to ask ourselves.

I don’t want to be the Grinch who steals Christmas, but I hope for the best and prepare for lower long-term returns. Enjoy your favorite holiday meals, especially the desserts.

After reviewing Continue reading →

Building a chaos-resistant portfolio

By David Snowball

In everyday language, we use “chaos” to mean complete disorder or randomness – like a toddler’s playroom after a long afternoon or a desk buried under scattered papers. This kind of chaos implies there’s no underlying order or pattern at all. It suggests a temporary state of disarray that can be resolved or brought back to order.

There is, however, a second use of the term. In chaos theory, “chaos” has a precise and quite different Continue reading →

John Rekenthaler: A Farewell (for now) Tribute to Morningstar’s Skeptic-in-Chief

By David Snowball

FundAlarm (1996-2011), for which I penned a monthly column, was the site that gave rise to MFO. I was drawn to Fund Alarm long ago by the voice of its founder, Roy Weitz. During the lunatic optimism and opportunism of the 1990s (who now remembers Alberto Vilar, the NetNet and Nothing-but-Net funds, or mutual funds that clocked 200-300% annual returns?), Mr. Weitz and Morningstar’s John Rekenthaler spent a lot of time kicking over piles of trash – often piles that had Continue reading →

Envisioning the Chaos Protected Portfolio

By Charles Lynn Bolin

President-elect Trump is picking his staff appointees who are perceived by some to be controversial, unqualified, or even extremists. The justification is often that they are disruptors who will challenge the status quo. The rhetoric is increasing about adding tariffs, eliminating agencies, reducing regulations, and cutting Federal spending and staff. Rhetoric moves markets. This article is about protecting our portfolios from chaos during times of high uncertainty.

During the first three years of President Trump’s first term, Federal spending increased by nine percent after adjusting for inflation. This was partly because the 2017 tax cuts did not generate sufficient growth to pay for themselves. During the next four years with the pandemic-era stimulus, Federal spending increased by an additional seventeen percent adjusted for inflation. Federal spending is Continue reading →

Briefly Noted

By TheShadow

The Intrepid Small Cap Fund was reorganized into the Intrepid Capital Fund on November 22. Eric Cinnamond managed the Intrepid Small Cap Composite from 1998-2010 and the Intrepid Small Cap Fund from 2005-2010. Jayme Wiggins took over the Intrepid Small Cap Fund upon Eric’s departure in 2010.  Jayme Wiggins managed the fund using the same absolute return investment strategy until September 2018. Both are now part of Palm Valley Capital Management.

The Oakmark U.S. Large Cap ETF is in Continue reading →

Top Performing Multi-Cap Core Funds (FCTDX, VTI, VTCLX)

By Charles Lynn Bolin

How simply can we invest without getting too simple? Three of my largest holdings are multi-cap core funds held in accounts managed by Fidelity, Vanguard, or myself. I own Vanguard Total Stock Market Index ETF (VTI), Fidelity Strategic Advisers US Total Stock (FCTDX), and Vanguard Tax-Managed Capital Appreciation Admiral (VTCLX). What is under the hood of these funds and how well do they perform compared to the market?

According to the Refinitiv Lipper U.S. Mutual Fund Classifications, multi-cap core funds “by portfolio practice, invest in a variety of market capitalization ranges without Continue reading →

Launch Alert: AlphaCentric Real Income Fund

By David Snowball

On November 1, 2024, the former AlphaCentric Strategic Income Fund was rebranded as AlphaCentric Real Income Fund with a new sub-advisor, broader strategy, and new expense ratio to accompany its new name.

CrossingBridge Advisors will manage the investment strategy by employing a team approach.  Portfolio managers are T. Kirk Whitney, CFA, who joined the firm as an analyst in 2013, Spencer Rolfe, who first joined in 2017, and David Sherman, CIO. CrossingBridge, with over $3.2 billion in assets as of 8/31/24 was Continue reading →

Launch Alert: Bridgeway Global Opportunities Fund

By David Snowball

On October 15, 2024, Bridgeway Capital launched Bridgeway Global Opportunities Fund (BRGOX), a long/short equity fund that will pursue long-term positive absolute returns while limiting exposure to general stock market risk. Using advanced quantitative modeling, the fund will hold 250-300 long positions and 250-300 short positions. The portfolio is designed with a bias toward quality, value, and sentiment. It will otherwise be neutral as to country, size, sector, and beta. That is, it will shoot for a beta of zero, a net China exposure of zero, and so on.

The fund will be managed by a Bridgeway team led by Co-Chief Investment Officer Jacob Pozharny, PhD.  He joined Continue reading →

Living Paycheck To Paycheck and the Role of Financial Counselors

By Charles Lynn Bolin

For most of us, saving money is the first step to investing, yet 25% to 35% of Americans are living paycheck to paycheck. This article looks at why people are living paycheck to paycheck and how lower- and middle-income Americans in particular may be able to increase emergency savings leading to saving more for retirement. The concepts are just as relevant to higher-income people as well.

In addition to volunteering at Habitat For Humanity, I also volunteer at a local non-profit organization, Neighbor To Neighbor, which offers programs in eviction avoidance, utility shut-off avoidance, affordable housing, housing search, foreclosure prevention, and counseling including financial coaching, debt consolidation, and reverse mortgages. Many of the people seeking assistance at Neighbor To Neighbor have experienced Continue reading →

Briefly Noted …

By TheShadow

AKRE Focus ETF is in registration. The Fund invests primarily in securities of companies listed on U.S. stock exchanges. Investments consist primarily of common stocks of companies of any size market capitalization. John H. Neff will be the portfolio manager. Expenses have not been disclosed. Mr. Neff also comanages Akre Focus Fund, which was founded by the namesake Charles Akre. Mr. Akre was remarkable, engaging, and … well, old. He retired from day-to-day management about three years ago. Since then Akre Focus Fund has performed in the way it was designed: exceptional in down markets, reasonable in up markets. In the absence of Mr. Akre, that seems not to have convinced shareholders to stay:

In the fund’s three “laggard” years, including 2024, it’s made an average Continue reading →

October 1, 2024

By David Snowball

Dear friends,

Welcome to the Samhain / the coming of the dark edition of the Mutual Fund Observer!

October is an interesting month. Traditionally perilous for the financial markets. It begins with the sullen remnants of summer and ends with festivals of the harvest (even for those of us in cities) and of the coming season when nature slips into dormancy. Halloween, whose sales now begin in August and whose iconic ghouls now Continue reading →

The Pabrai Wagon Fund Overview and Interview with Mohnish Pabrai

By Devesh Shah

On September 29, 2023, Mr. Pabrai started the Pabrai Wagons Fund (WAGNX/WGNIX), a ‘40 Act mutual fund, offering retail investors a vehicle to invest in his stock ideas.

Mohnish Pabrai, quoting ChatGPT, is a value investor heavily inspired by Warren Buffett and Charlie Munger, with a focus on long-term, concentrated bets on undervalued companies. He founded Pabrai Investment Funds, where he manages private partnerships that mirror Buffett’s approach, often emphasizing the importance of patience and low-risk, high-return opportunities.

He has written two notable books: Continue reading →

Trending Funds at the Inflection of Falling Rates

By Charles Lynn Bolin

Investors waited impatiently as the Federal Reserve considered cutting interest rates. Will it be 0.25% or 0.5%? They finally cut rates by 0.5% on September 18th. The S&P 500 is up 20% year to date as investors contemplated whether we would have a recession or manage the elusive soft landing. There have been three periods this year where the market fell 5% or more. The S&P 500 has been relatively flat for the past three months but spiked over 1% after the Fed made the cut.

My survival instinct tells me to sell stocks and buy bonds, but my self-control tells me Continue reading →