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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Fidelity Private CRE Fund
    The Journal of Accountancy article from 1997 isn't relevant in today's world especially after the rise of crowdfunded CRE following the JOBS Act in the 2010's
    That article discussed the alteration of tax benefits (notably pass through of losses) in 1986. Could you speak to the tax benefits that have since been restored or otherwise replaced that make the article irrelevant today?
    If it's the date of the article that's bothering you, here's a 2020 Tax Foundation piece bemoaning how the TRA extended depreciation periods (MACRS) and restricted the use of declining balance depreciation.
    Lessons for Today
    ...
    Long asset lives (for example, 27.5 years for residential buildings and 39 years for nonresidential buildings) in which deductions are spread over many decades mean that companies cannot deduct anywhere near the full value of their investments in structures, as inflation and the time value of money chip away at the value of those deductions. Shortening depreciation schedules to 15 or even 20 years, roughly where they were before TRA86, would lessen the magnitude of this problem, but it would not be the ideal policy.
    The current system of depreciation creates a bias against businesses that heavily invest in structures, as the effective marginal tax rates on investments in nonresidential and residential structures are much higher than those on equipment, software, and intellectual property.
    https://taxfoundation.org/1980s-tax-reform-cost-recovery-and-the-real-estate-industry-lessons-for-today/
    With respect to crowdfunding, that's a completely separate matter. It deals with who can invest, not how the investments are taxed. Whatever Regs A+ and CF and Rule 506(c) facilitate, they don't apply to the Fidelity offering. As stated in the Form D that yogi cited, Fidelity's offering gets its SEC exemption from Rule 506(b).
    msf in Fund Discussions
  • Precious metals are breaking out
    ”Goes back to your Asia and the Miners days ...”
    When the **** was that? Back in the 90s? Some here weren’t born yet. Agree - it’s great to see @rono chiming in.
    Recently sold small spec stake in a silver miner (a case of the kitchen getting too hot). Still have a p/c mining fund owned many years. And of course there’s PRPFX. Also have a physical metals fund (the kind @MikeM prefers). And a CEF that plays around in gold (hopefully with somewhat more downside protection). Don’t overlook some of the industrial miners like RIO, GLNCY, BHP. These may catch some of the tail wind while spreading out the risk more.
    I believe in moderation. When these things correct it resembles the biggest tree in the forest crashing down.
    hank in Other Investing
  • Walmart closings
    Or perhaps poor management. Walmart put up with losses there for 17 years, since day one, and then gave just five days notice before shutting down the stores. Not an indication of good planning skills, and certainly not good public relations. Not to mention running afoul of federal and state laws requiring months of advance notice.
    The Honolulu closing was announced a month in advance. While longer, that might also be in violation of federal law, given that the shutdown affects 169 workers there.
    https://www.kitv.com/news/business/walmart-store-in-downtown-honolulu-closing-in-april/article_fd2a9b04-c83f-11ed-89da-43bbf9638632.html
    The issue in Chicago is not the loss of a retailer, but of supermarkets in food deserts.
    https://www.businessinsider.com/walmart-closing-chicago-stores-sparks-outrage-2023-4
    While there are other nearby retailers in Honolulu (per @Crash), apparently there aren't any remaining large retailers downtown. How does this affect residents who don't drive?
    Closure of last big downtown retailer, Walmart, prompts fears
    First the downtown Walgreens closed about a year ago, followed six months later by the shuttering of the neighborhood Longs, and now the last major retailer, Walmart, plans to shut its doors after April 21
    https://howzitkohala.com/2023/03/22/closure-of-last-big-downtown-retailer-walmart-prompts-fears/
    (The full piece is from the Honolulu Star Advertiser behind a paywall.)
    msf in Other Investing
  • Fidelity Private CRE Fund
    A couple of clarifications (perhaps):
    - The termsheet that Shadow provided says that minimum additional investments are $5K, but doesn't say that these additional investments are required or that they can only be made on a monthly schedule.
    - The 3 years before redemptions are allowed start when the initial offering is closed (as opposed to when operations begin). The Form D filing says that the initial offering is expected to remain open for more than a year. So it could be much longer than three years before one could get one's money out.
    @sma3 - are you referring to the Tax Reform Act (TRA) of 1986?
    ONCE TOUTED AS THE INVESTMENT vehicle of the future, limited partnerships are seldom pitched to investors today. Instead, clients and the CPAs who advise them are looking back at the tax and financial factors that contributed to the downfall of LPs in areas such as oil and gas, real estate and equipment leasing.
    ...
    THE TAX REFORM ACT OF 1986, combined with increased Internal Revenue Service audit scrutiny spelled the beginning of the end for tax-oriented LPs. Extension of the at-risk limitations to real estate tax shelters and the passive loss provisions in the TRA [reducing the ability of individual taxpayers to offset income with losses from tax shelters] gave the IRS the weapons it needed.
    Journal of Accountancy, What Happened to Limited Partnerships?
    https://www.journalofaccountancy.com/issues/1997/jul/knight.html
    msf in Fund Discussions
  • Gold is taxing Form 8621
    I saw that one
    FYI for all the opponents of the increased IRS budget, please remember that the chaos the GOP IRS budget cuts have caused has direct and significant negative impacts on average Americans.
    My sisters and I are waiting for my deceased mother's refund ( $20,000) from her 2020 and 2021 taxes. She died over two years ago and we were required to file on paper.
    I have called the IRS several times and have gotten conflicting advice about what to do. During the last call ( which takes hours) a very competent man confirmed they had the returns but they have to be processed by hand. He cold not tell me how long it would take, but wanted to make sure that this was not causing us significant financial distress.
    What if we needed the money? Of course when we get it, it will not be paid with interest.
    sma3 in Other Investing
  • Alternative to Artisan International Value (ARTKX)?
    I have owned VWIGX for 30 years and 2 months. Annual returns over that period work out to 6.91. Can't say I'm excited about it. But it does show what a small investment can turn into over 30 years. And someday it will be the kids' problem.
    Within the past couple of years I purchased IHDG and FYLD for their yield. They held up better than VWIGX during the recent excitement. But neither has a long track record.
    So far, I haven't had to tap either for yield. So far, I am happy with them.
    WABAC WABAC in Fund Discussions
  • Gold is taxing Form 8621
    Sorry for the tax mess. Thanks for posting. Picked up a couple collectible U.S. coins several years ago. Have appreciated nicely. Assumed long term cap gains would apply. But if the tax hit is 28% (sounds like it), am better off hanging on.
    Fortunately there are many avenues to p/c exposure that don’t suffer a tax hit if held in a tax sheltered / deferred account. Degree of risk / volatility varies by type of investment.
    hank in Other Investing
  • T. Rowe Price Capital Appreciation
    Yogi, I hear what you're saying but neither Price Capital Appreciation Fund was ever an option within the 401a options but rather a holding within the brokerage link account associated with the 401a that allows participants to invest in any mutual fund offered by the brokerage firm (Fidelity). Years ago, I had to beg and plead with Fidelity's mutual fund traders to let me do a share class exchange from PRWCX into TRAIX and then, I suspect, lost their sales agreement with Price to offer TRAIX. (If I had exchanged all but one share of the PRWCX, I could now invest additional money into PRWCX. And as I said, Price will not now allow a new share class exchange from TRAIX into PRWCX (because PRWCX is closed to new investors.) At least I can continue to reinvest TRAIX dividends each year into new shares. Lesson learned: If you ever do a share class exchange to get the lower fees associated with the Institutional class shares, hold back a few shares of the Investor class so that you'll be permitted to invest new money in the event the fund family changes their relationship with your broker.
    Jim0445 in Fund Discussions
  • Alternative to Artisan International Value (ARTKX)?
    @LewisBraham: a video interview with ARDBX’s two co-portfolio managers, shows that they were former Artisan employees trained by David Samra. Each left Artisan for other positions, but were brought back 2-3 years ago by Samra to be part of the International Value team. Once they got a big cash position invested, the ARBDX team has been out front of the competition in 2023. Very promising.
    BenWP BenWP in Fund Discussions
  • T. Rowe Price Capital Appreciation
    @Jim0445. That sounds very strange. The fund is supposed to be open to additional purchases for existing shareholders. You could call a different brokerage and ask that if you transferred your account would they allow you to add to your shares. Heck I'd be interested in buying a few shares :) :)... Been wanting to get into TRAIX for years...
    MikeW in Fund Discussions
  • Infinity Q Capital Management Plans to Return $500 Million to Mutual-Fund Investors
    No, but I did include a news release from the US Attorney's office Southern District of New York:
    https://www.justice.gov/usao-sdny/pr/founder-and-former-chief-investment-officer-infinity-q-sentenced-15-years-prison
    TheShadow TheShadow in Fund Discussions
  • What day did WSJ include their first quarter report ?
    @Derf,
    Not exactly. Since April 1 fell on a Saturday, there was no way the results would be ready on Monday. It seems to depend on when the dates fall. For example, if the first of the month was on a Tuesday, it is possible the monthly results could be ready the upcoming Monday provided there was no holidays. The WSJ used to publish a yearly calendar on when certain articles were to be published, but I have not seen the calendar for a couple of years.
    Here is the mediakit page where you can find the editorial calendar page:
    https://mediakit.wsjbarrons.com/p/1
    Here is the editorial calendar/reports calendar for 2023:
    https://acrobat.adobe.com/link/review?uri=urn:aaid:scds:US:65e5d3c4-8bd1-3851-8704-d37d41372971
    TheShadow TheShadow in Other Investing
  • Merrill - its "cents-less" difficulty with money market funds
    It's been so long since I used a MMF with Merrill …
    It’s been a long time since I remember folks getting excited about money market funds. About 40 years. The 80s as I recall. :)
    BTW - If anybody missed it, this week’s Barron’s notes that municipal money market funds are now yielding a nice return. Around 4%. May be better than the plain vanilla variety - depending on tax bracket. Appears, however, they are not quite as secure as the taxable ones.
    hank in Fund Discussions
  • Best Returns on Currently Available CDs or Treasuries Maturing 2024 to 2025 ?
    @Old_Joe, if bond funds have already suffered the FEDs rate hikes, might they be a better alternative 2+ years down the road. I do understand trying to lock in a safe 5%+, but according to the yield curves that may not be feasible.
    MikeM MikeM in Other Investing
  • Best Returns on Currently Available CDs or Treasuries Maturing 2024 to 2025 ?
    Yes, what I was really looking for was something decent about two years out, but don't see anything at all like that.
    Old_Joe Old_Joe in Other Investing
  • Gold is taxing Form 8621
    FYI for anyone interested in investing in Gold and other precious metals.
    I have had small amounts in Gold over the years and have discovered several irritating tax issues.
    GLD pays for it's expenses buy selling a bit of the gold every month. This generates income for you the fund owner that has to be calculated and reported, usually as short term if I remember
    Last year I decided to buy some PHYS Sprott Physical Gold Fund and the website promised that if you complete a form 8621 you can avoid paying the 28% long term tax rate on collectibles.
    This is true, but 8621 is a real PIA that makes K-1 look simple. I think I figured it out, but it has to be filed with your 1040 and TurboTax will not support it. So you have to file by paper.
    Sprott is considered a foreign investment, even though it is traded in US.
    sma3 in Other Investing
  • Anybody care to recommend a good natural resources ETF?
    ”Jeremy Grantham had a long piece years ago, predicting dramatic increases in price of food and agricultural products for a number of reasons.”

    Yep - I’ve been thinking that way. But most of this stuff has really run up in price the past several years. I’d be cautious at this point.
    Spent hours looking at possibilities. Nothing stood out as a bargain. In the end, decided to sell just the silver miner. Replaced it with a CEF that monkeys around in the precious metals / commodities sectors. The second one (an industrial metals miner) appears on closer examination to be reasonably priced. So hung on to it. With a pair of largely speculative holdings like this I try to keep them in balance. If one runs out ahead, clip some and add to the other. Reduces risk to a degree. When both are falling together it’s time to move from single malt to blended.
    My 2-cents worth …
    - RAAX looks like an excellent longer term hold if somebody wants exposure to natural resources (notwithstanding valuations are rich). Actively managed. Appears to alter its allocation to various VanEck and non-house ETFs based on a proprietary formula. Appears heavily weighted to gold / precious metals at present. The .87% management fee is quite high as ETFs go. For a substantial portfolio spot, however, I’d prefer something passively managed and tied to an index. With volatile assets like this I think it’s better to be widely spread out and not have a manager trying to second guess which way markets will move. But longer term I’m confident they will do a fine job with the fund.
    - Looked long and hard at GRES. Morningstar rates it “gold”, but notes the IQ management team isn’t the best. What I like is the broad diversification across a wide spectrum of the natural resources markets. Few if any holdings reach or exceed 2% of portfolio. Timber and Ag are included, though you wouldn’t know it from M*’s description. It’s passively managed, sticking to a proprietary index and rebalancing quarterly. The .30% ER is excellent. What concerns me is the low AUM which Fido puts at $37 mil. One wonders how long it will survive. The other concern is that within the past few years the index it adheres to and methodology were both modified for reasons unknown. Plus, as I’ve mentioned before, I tried a couple other funds of theirs and was disappointed.
    hank in Fund Discussions
  • Anybody care to recommend a good natural resources ETF?
    @hank
    I hoped WSKY was the ticket for single malts, and if they liquidated ( which they eventually did for lack of interest) they would pay me in liquid assets, but no.
    I have spent some time looking at ETFs that are plays on the EV and climate change "revolutions" along with commodities and resources that will become more expensive with climate change. There are a lot of ETFs investing in metal futures that will be necessary for EVs, like Lithium, Copper rare earths etc. You would think they would take off like rockets, but the general decline in commodities, with increased recession fears has crushed many of them, but others like Silver are up 25% in six months.
    Jeremy Grantham had a long piece years ago, predicting dramatic increases in price of food and agricultural products for a number of reasons. I started looking at commodities back then, but it was pretty early. After a bump from the war in Ukraine, agricultural commodities have been relatively flat, but not down like the metals.
    It is hard for individual investors like us to make sense of this, without "inside" knowledge, and I am not sure that even the actively managed funds have this kind of expertise. Who would predict that bird flu would kill mostly egg laying chickens, rather than birds raised for meat?
    I think it makes sense to own a variety of funds with different focus, in addition to a general commodity fund. COM has been mentioned here before and so far seems less volatile than most.
    sma3 in Fund Discussions
  • Alternative to Artisan International Value (ARTKX)?
    ARTKX is categorized as international large cap value. I compared its metrics to a ARTGX plus a bunch of ILCV funds. What stood out was the ARTVX had a far lower Ulcer Index than its peers, so I ran a second screen for ILCV funds with an APR over 10 and an Ulcer Index under 10. I sorted those by Sharpe ratio and checked the correlation of the three most promising to ARTKX.
    Franklin Templeton International Low Vol, Hi Div ETF (LVHI) - better than ARTKX in every way over the past three years except total return LVHI book 15%, ARTKX 21%. The R2 is 85.
    Causeway International Value (CIVIX) - same returns, higher volatility. The R2 is 96.
    Fidelity International Value (FIVLX) - lower returns (17 vs 21%), comparable Ulcer Index (7.2 vs 6.5). High correlation (98) to Artisan, which implies they're playing the same game but Artisan is playing it better.
    Artisan Global Value (ARTGX) - high correlation (97) but slightly trails ARTKX in pretty much all metrics.
    All are top tier since the screen started with low Ulcer / high returns.
    For what interest that holds,
    David
    wdavidsnowball in Fund Discussions
  • Alternative to Artisan International Value (ARTKX)?
    Perhaps we should look into @LB article on Barron’s with respect to active foreign funds/ETFs. Thanks to @yogibearbull, he has summarized these funds.
    Barron’s Funds Quarterly (2023/Q1–April 10, 2023)
    https://www.barrons.com/topics/mutual-funds-quarterly
    (Performance data quoted in this Supplement are for 2023/Q1 and YTD to 3/31/23)
    Pg L3: After lagging for several years, the INTERNATIONAL/GLOBAL funds are relatively cheap (value cheaper than growth) and may outperform. Use risk control strategies – lower SDs, favorable U/D CR, etc. For the US investors in foreign funds, a strong DOLLAR has been a headwind. OEFs: AIVBX, BISAX, FISMX, FMIJX, GQGPX, RNWOX, SGENX, SIGIX, TBGVX; ETFs: ACWV, EFA, EFAV, EFG, EFV, EEM, HDG, HEFA, VIGI. (By @LewisBraham at MFO)
    Pg L8: The US-China DECOUPLING will take a while. China has also been tough on its big techs. But small-caps have escaped the watchful eyes of the Chinese government. OEFs: FHKCX, MCDFX, MCHFX, MCSMX, RNWOX, SIGIX, SGOVX; ETFs: ASHR, CHIQ, CNYA, CQQQ, CXSE, EWH, FXI, GXC, KBA, KWEB, MCHI, PGJ. (By @LewisBraham at MFO)
    Pg L9: GROWTH funds are rebounding, but be selective. Some former big techs have fallen off the growth wagon and some energy companies have joined. Large-cap growth (IVW, MGK, RPG, SCHG) has been outperforming small/mid-cap growth (IJT, RZG). The OEFs mentioned are HCAIX, TRBCX, VWIGX.
    EXTRA: FAITH-BASED funds cover a wide variety and several are rebounding. Vatican published its investment guidelines in November 2022 that also included responsible ESG. Private direct-indexing is a growing area. (By @LewisBraham at MFO)
    Fund news from elsewhere in Barron’s (Forthcoming Part 2).
    Pg 13, FUNDS. MUNI MONEY-MARKET funds (tax-exempt) with near juicy 4% yields are attractive. This is a tiny area with $130 billion AUM only vs $500 billion AUM pre-GFC-2008, and $5 trillion AUM for taxable money-market funds. These invest in floating-rate munis (VRDNs) that reset rates weekly according to the SIFMA rates. Typically, the SIFMA rates are 40-80% of (taxable) fed fund rates, but they are elevated now due to redemptions to pay taxes (so, these high rates may not last beyond April). These funds partner with BANKS to provide daily and weekly liquidity guarantees. By definition, their DURATION is considered to be the rate reset period regardless of the maturities of the underlying munis (so, don’t get alarmed when looking at their holdings and maturities). Mentioned are FTEXX / FTCXX, SWTXX, VMSXX, VTMXX. (Their overall structure and rate resetting process seem complicated and may have unknown risks)
    Pg 24, INCOME INVESTING. Selected REITs are attractive after their recent battering. Their earnings have been cut but the SP5500 earnings remain OK (so, the REITs client companies are doing fine). A FED pause will benefit the REITs, but RECESSION won’t, so it’s time only to nibble in REITs. Attractive REITs are industrial (PLD, ADC, GLPI), residential, self-storage, data-centers. Avoid REITs for offices and malls (big/regional or strip/local). Several publicly traded REITs are more attractive than private real estate (that suffer from lagging mark-to-market; negative news on monthly/quarterly redemption limits for several nontraded-REITs).
    Pg L33: In 2023/Q1 (SP500 +7.50%): Among general equity funds, best were LC-growth +13.52%, multi-cap-growth +11.35%, and worst were small-cap-value +0.77%, mid-cap-value +0.84%, equity-income +0.95%; ALL general equity categories were positive AGAIN. Among other equity funds, the best were sc & tech +18.80%, telecom +11.66%, global large-cap-growth +11.10%, and worst were financials -7.77%. Among fixed-income funds, domestic long-term FI +2.55%, world income +2.96%; ALL FI categories were positive too AGAIN (FI isn’t very refined in Lipper mutual fund categories listed in Barron’s). So, good 2022/Q4 (value shined) & 2023/Q1 (LC growth shined).
    LINK
    https://mutualfundobserver.com/discuss/discussion/60940/barron-s-funds-quarterly-2023-q1-april-10-2023#latest
    Sven in Fund Discussions