Category Archives: Mutual Fund Commentary

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 →

Briefly Noted…

By TheShadow

Updates

BenWP, a member of MFO’s discussion community, contributed that the Capital Group has several new equity and fixed-income ETFs.  One of the newest ETFs is the Capital Group Core Balanced ETF, an active multi-asset ETF. Some of the other active equity ETFs are the Capital Group International Equity ETF, Capital Group International Focus Equity ETF, Capital Group Dividend Growers ETF, Capital Group Dividend Value ETF, Capital Group Global Growth Equity ETF, Capital Group Core Equity ETF, and Capital Group Growth ETF. The Capital Group has several new fixed-income ETFs: Capital Group Core Bond ETF, Capital Group Core Plus Income ETF, Capital Group Short Duration Income ETF, and Capital Group U.S. Multi-Sector Income ETF. There are two municipal ETFs: Capital Group Municipal Income ETF and Continue reading →

November 1, 2023

By David Snowball

Dear friends,

Happy New Year! And oíche Shamhna shona duit!

November 1st is Samhain (pronounced “sow-in” in case you’re curious), the traditional beginning of the new year in Gaelic culture. It’s proceeded not only by Samhain Eve but also by … well, three days of drinking. And then followed by three days of regretting it, at least a little.

Samhain marked the end of the harvest season and the onset of “the darker half” of the year, a time of increasing isolation and decreasing food stocks. It made all the sense in the world to do what people do in the face of adversity: throw a big communal gathering, feast, and dress up in scary costumes, and tell the agents of darkness to go Continue reading →

Investing Beyond The Great Distortion

By David Snowball

Devesh Shah and David Sherman engaged in a free-range conversation that touched on benchmark-free investing over hot drinks and fresh pastries. Benchmark-free investing starts with the question, “If you simply didn’t care about ‘the conventional wisdom’ concerning which assets you were supposed to own, what assets would you own?”

Mr. Sherman and Oaktree’s Howard Marks seem to endorse the same conclusion: “likely high-yield bond, surely not stocks.” That’s certainly contrary to conventional wisdom, which is centered on Continue reading →

Hot Coffee and Hot Chocolate – A Brunch and Walk with David Sherman

By Devesh Shah

The leaves are turning crimson and gold in Central Park. On the Upper West Side, surrounding the American Museum of Natural History, are oak trees. They line the pedestrian walkway and are swinging to the rhythm of a light chill wind, marking the beginning of fall in New York. Acorns and dry leaves crunch under our feet. There is a farmer’s market which starts on 81st and Columbus Avenue, continues down to 77th Street, and then wraps around the museum to Central Park West. Varied hot dogs, kababs, and coffee carts line the path where the farmer’s market ends. It’s not your standard Broadway street fair with trinkets; it’s a proper market where locals get their meat and vegetable shopping done for the week. The first stand on Columbus is Continue reading →

Short-Term Market Momentum

By Charles Lynn Bolin

The S&P 500 has fallen from 4,598 on July 27th of this year to 4,117 on October 28th for a decline of 10.5%, while yields on the ten-year Treasury have risen from 4.01% to 4.85% for a rise of 20.9%. The Fidelity Intermediate Treasury Bond Index (FUAMX) has had a price decline of 4% during this three-month period. I expected a larger decline in the S&P 500 and a lower rise in yields. Money market yields are hovering around 5%, and “cash is king.”

Economic growth is robust, along with relatively stable employment, while inflation Continue reading →

Fire-and-Forget Gone Wrong: First Foundation Total Return

By David Snowball

In the military realm, “fire and forget” designates a weapon that you don’t need to think about once it’s been launched. In investing, “fire and forget” could be used to describe several sorts of mistakes centering on our impulse to look away once we’ve made a decision. One of those mistakes is to buy a fund (presumably for a good reason), then sell it (presumably for a good reason), and then never re-examine your decision.

Managers – both corporate and fund – make mistakes. You can’t avoid it. They can’t. The best of them realize it, learn from it, correct it, and return to doing fine work. After inheriting Continue reading →

Briefly Noted

By TheShadow

Updates

Matthews Asia has named Sean Taylor as its incoming chief investment officer, taking over from Robert Horrocks at the start of next year. Taylor was CIO for Asia Pacific and head of emerging markets at DWS and will assume his new role at Matthews on January 1, 2024. Mr. Horrocks, who has been with Matthews Asia since 2008, will retain his portfolio management responsibilities, which include Matthews Asia Dividend and Matthews Asian Growth & Income.

Matthews hired a new CIO, Cooper Abbott, in the summer of 2022. Since then, the firm has undergone Continue reading →

October 1, 2023

By David Snowball

Welcome to October, a fierce month!

It’s a month of apple harvests and Atlantic hurricanes (214 of them). Of a temperature roller coaster and of market crashes (1907, 1929, and 1987 – days with the word “Black” attached to their names, stand out). Of bonfires and of Great Fires (Mrs. O’Leary and her cow were framed, I tell ya). Of wars (from the Battle of Hastings in 1066 through the Second World War, October was always seen as your last chance for a quick land grab before wintry weather closed you down for the season) and rumors of wars (the Cuban Missile Crisis which, happily, didn’t trigger a global war in part because of President Kennedy’s familiarity with the political intransigence and misunderstanding that triggered the First World War). Of a thinning wall between the Here and the There and of Continue reading →

T. Rowe Price Capital Appreciation PRWCX vs TCAF

By Charles Lynn Bolin

I was asked recently what I thought of T. Rowe Price Capital Appreciation (PRWCX) compared to T. Rowe Price Capital Appreciation Equity ETF (TCAF), which has gained $235 million in assets under management since its June 2023 launch. TCAF is one of two new T Rowe Price offerings that play off the unparalleled success of the PRWCX, which is closed to new investors. The other new entrant, the T. Rowe Price Capital Appreciation and Income Fund, has not yet debuted.

The most striking similarities are the name and the fact that they are both managed by David R. Giroux, who has an outstanding record. From here, the similarity fades. PRWCX is a moderate to growth-oriented mixed-asset fund, while TCAF is a predominantly domestic equity fund. There are differences in how the equity sleeve of PRWCX compares to TCAF, which are explored in this article.

Let’s start with Continue reading →

Beyond The Rainbow – A Map to the Good Life in Retirement

By Charles Lynn Bolin

This is the last article in a series that describes what I learned in the year following retirement. After fifty years of working, military service, and getting two university degrees, I took the first year as “Me Time”. I once worked with an Australian who was fond of saying that he had his $100 in the bank, meaning that he was financially secure. I have reached the end of the rainbow after decades of investing and financial planning. I just signed up for Social Security, which, combined with pensions, will cover normal spending needs, plus I have my $100 in the bank. Continue reading →

The 25 Year Tempest: Emerging market investing through three cataclysms

By David Snowball

Who now remembers Long-Term Capital Management, the failure of genius, the price of hubris, and the lesson that the innocents bear the cost of their elders’ folly?

Too few, judging from investor behavior.

The collapse of LTCM was the first of three global financial crises over the past 25 years that erupted primarily in the developed world, but whose consequences were primarily borne by emerging markets economies and Continue reading →

Funds worth watching for

By David Snowball

The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, we survey actively managed funds and ETFs in the pipeline. Summer’s trickle of new funds becomes autumn’s torrent as advisers rush to have new products on the market by December 31. That’s because a fund launched after that date won’t get to report annual or year-to-date results for 2024, which is a serious marketing problem.

Many new funds, like many existing funds, are bad ideas. (Really, you want the latest “anti-woke” ETF or a new way to invest with Bill Miller’s son?) Most will flounder in rightful obscurity. That said, each month brings some promising options that investors might choose to track.

Two, or perhaps two point five, to add Continue reading →