Hi, guys.
I wanted to follow up with the GP folks before sharing anything. Exchanged notes with their president yesterday, and we've just sent this note to the folks on MFO's mailing list. I wanted to share if with you against the prospect that any of it is interesting to you.
David
- - - - -
On February 12, Grandeur Peak announced their intention to institute a "hard close" for four funds and a soft close on one fund. A hard close is one that stops additional purchases by both new and existing shareholders; a soft close stops new investors from opening accounts. The funds affected are:
Hard closed: Global Opportunities, International Opportunities, International Stalwarts and Global Micro Cap.
Soft closed: Emerging Markets Opportunities.
Each of the affected funds returned between 30-50% in 2020; Global Micro Cap and Emerging Markets have already posted double-digit returns for 2021. The hard closed funds all have four star ratings from Morningstar and are MFO Honor Roll funds; in addition, International Stalwarts is an MFO Great Owl which signals consistently first-tier risk-adjusted returns.
The public explanation was "we carefully review capacity at both the strategy and firm level. We are committed to keeping our investment strategies nimble to fully pursue their investment objectives without being encumbered by their individual asset base or the firm’s collective assets."
I asked president Eric Huefner to talk a bit about the necessity to close a $60 million fund and the oddity of hard-closing one of their least capacity-constrained funds. He noted that Global Micro Cap closed on the day it was launched but has doubled in size in the past 12 months. That's due to modest inflows, "sticky" investors and a 50% return in 2020. Grandeur's goal is "total investment flexibility in the micro-cap arena"
The Stalwarts funds were created, primarily, to serve the needs of investment advisors who had worked with Grandeur for years but found that Grandeur's "core" funds were now closed and, hence, inaccessible to new clients. The suite of Stalwarts funds were designed to give investors access to Grandeur's style through funds that targeted slightly larger (hence, more liquid) stocks. The hope was that those funds would not have to close as quickly as the small- and micro-cap focused core funds. I asked about what had happened to limit capacity. Mr. Huefner noted that total capacity for the Stalwarts strategy - funds + SMAs, US/global/international - was in the $5-7 billion range with International having more assets than the other two combined. "We soft closed the Int’l Stalwarts strategy in June [but] the AUM in the International Stalwarts strategy has still grown more than 40% since then. Given the continuing rapid growth, it felt necessary to close it in order to preserve space for our other Stalwarts strategies."
If you believe that the market will continue on its recent trajectory, dominated by US large tech stops, then there's nothing much you need to do. If you believe that the market might be rotating in response to a new administration, a new environment or simple exhaustion, you might anticipate international outperforming domestic, developing outperforming developed, small outperforming large. These funds are at the vanguard of investing in those style.
Possible responses to their closing:
Check your target asset allocation, whether for the individual fund or the asset class it represents. Consider whether you want to make an additional allocation now, in an admittedly pricey market, to bring your investment in line with your target.
In my case, Global Micro Cap is my third-largest holding and represents 15% of my portfolio. As much as I'm delighted by its performance - 18% annually since launch - it would be hard for me to justify allocating more there now.
Consider alternative GP funds as options. The young Global Contrarian fund has an R-squared of 97 against Global Micro Cap. Both have substantial micro cap exposure (about 40%) with Contrarian's stocks being a bit larger and noticeably lower priced than Micro Caps.
Similarly, Global Stalwarts has a correlation to International Stalwarts of 98 and a nearly identical Sharpe ratio, annual return and maximum drawdown. Global is about 55% international.
Consider Rondure, Wasatch and Seven Canyons funds as options. All four families are driven by Wasatch alumni. While they have very distinctive perspectives and strengths, all have a shared perspective on global small- and micro-cap investing and a respect for their investors as partners. By way of example, Rondure New World (four star, $250 million) has an R-squared of 95 against Emerging Markets Opportunities and Wasatch EM Small Cap (four star, $520 million) has an R-squared of 93. These are all very solid advisors with investor-centered cultures and strong records, though not identical strategies. Between them, 11 of their 24 eligible funds (those with records of three years or more) have earned an MFO Great Owl designation.

Hi @LewisBraham and @Old_Joe

Is it me or is there something unsavory sounding to the word "money" as a verb? It makes it sound like money is something you do instead of something you earn through work.

Financial Literacy ??? Is this the question related to "money" as a verb or just a random thought placed in this thread?
I've been outside removing too much snow and the static temp is -10 F. Perhaps I just have a brain freeze with the money and verb statement.
Lastly, if I didn't want to expand the reserve of our money by something I do (investing); with the base money having arrived over many years of what was earned through hard work; I would be spending my time at web pages discussing why my fudge brownie recipe is better than yours.
Thank you for the reply.
Catch

How does TSDLX differ from PRWBX ? TSDLX has 27% foreign vs PRWBX 16% . NTF at Schwab, but tf at Fidelity.

H Carew - I’ll dare to guess here based on recollection.
I believe PRWBX is focused a bit shorter on duration (1-3 years). TSDLX appears to be targeting the 3 year range - give or take. Hard to know for sure because TSDLX has only been open about 6 weeks.
By prospectus TSDLX is allowed to invest something like 30% in junk bonds - though they’re not planning to go that high. PRWBX is for the most part investment grade.
So, under “normal” conditions (HA) you’d expect TSDLX to do a little better.

Well, I'll discover what becomes of these indicators some time Tuesday morning.
Note: I've checked these links periodically over several years and have not seen "all green" (as I write) for Global Markets.
FINVIZ futures (11pm, EST)
Global Markets Overview (11pm EST)
Informational purposes only :)
Good Evening,
Catch

Taking reports of side effects now the vaccines have been given to over 40 million people is fraught with difficulty, as there is no longer a placebo group to compare to. Anyone who has a serious medical problem after the vaccine will likely be reported to the FDA but that does not mean that the vaccine caused the stoke or heart attacks or whatever. The frequency of adverse reaction the FDA reports in post marketing studies are reflective of whatever reports they receive.
30,000 people were in both of the Pfizer and Moderna studies which is a huge number. It is large enough to give us confidence that the most serious side effects would show up, and could be compared to their frequency in the placebo group.
I would suggest people who are interested read the original FDA data both Moderna and Pfizer submitted. You can quickly go to the section on side effects and see the actual data that compares the vaccine recipients to their placebo counterparts. The tables are clear and easy to follow.
Here is Moderna
https://www.fda.gov/media/144434/download
The text for "deaths" follows.
"Serious Adverse Events Deaths As of December 3, 2020, 13 deaths were reported (6 vaccine, 7 placebo). Two deaths in the vaccine group were in participants >75 years of age with pre-existing cardiac disease; one participant died of cardiopulmonary arrest 21 days after dose 1, and one participant died of myocardial infarction 45 days after dose 2. Another two vaccine recipients were found deceased at home, and the cause of these deaths is uncertain: a 70-year-old participant with cardiac disease was found deceased 57 days after dose 2, and a 56-year-old participant with hypertension, chronic back pain being treated with opioid medication died 37 days after dose 1 (The official cause of death was listed as head trauma). One case was a 72-year-old vaccine recipient with Crohn’s disease and short bowel syndrome who was hospitalized for thrombocytopenia and acute kidney failure due to obstructive nephrolithiasis 40 days after dose 2 and developed complications resulting in multiorgan failure and death. One vaccine recipient died of suicide 21 days after dose 1. The placebo recipients died from myocardial infarction (n=3), intra-abdominal perforation (n=1), systemic inflammatory response syndrome in the setting of known malignancy (n=1), COVID-19 (n=1), and unknown cause (n=1). These deaths represent events and rates that occur in the general population of individuals in these age groups.
Non-fatal Serious Adverse Events Among participants who received at least one dose of vaccine or placebo (N=30,351), the proportion of participants who reported at least one SAE from dose 1 to the primary analysis cutoff date (November 25, 2020) was 1% in the mRNA-1273 group and 1% in the placebo group. The most common SAEs occurring at higher rates in the vaccine group than the placebo group were myocardial infarction (0.03% in vaccine group, 5 cases vs. 3 cases in placebo group), cholecystitis (0.02% in vaccine group, 3 cases vs. 0 cases in placebo group), and nephrolithiasis (0.02% in vaccine group, 3 cases vs. 0 cases in placebo group). The small numbers of cases of these events do not suggest a causal relationship. The most common SAEs occurring at higher rates in the placebo arm than the vaccine arm, aside from COVID-19 (0.1% in placebo group), were pneumonia (0.05% in placebo group) and pulmonary embolism (0.03% in placebo group). Occurrence of other SAEs, including cardiovascular SAEs, were otherwise balanced between treatment groups. "
I think it is fair to say these vaccines are very safe, and at least so far, very very effective

Up TO DATE is probably the best single source for updated medical information available to health care professionals. It is not cheap ($350 a year) but it is peer reviewed and edited by top academic physicians, many of them from Hopkins, Harvard, Yale, Stamford and other "top ten" medical schools
Here is their summary recommendation and summary of Side effects
" For individuals who are eligible for vaccination according to local allocation priorities, we recommend COVID-19 vaccination (Grade 1B). Selection of vaccine depends on local availability. The different vaccines have not been studied head-to-head, and thus, comparative efficacy is uncertain."
A Grade 1 B recommendation
A Grade 1 recommendation is a strong recommendation. It means that we believe that if you follow the recommendation, you will be doing more good than harm for most, if not all of your patients.
Grade B means that the best estimates of the critical benefits and risks come from randomized, controlled trials with important limitations (eg, inconsistent results, methodologic flaws, imprecise results, extrapolation from a different population or setting) or very strong evidence of some other form. Further research (if performed) is likely to have an impact on our confidence in the estimates of benefit and risk, and may change the estimates.
Moderna Safety and side effects – Local and systemic adverse effects were dose dependent and relatively common after the second dose; most were of mild or moderate severity (ie, did not prevent daily activities or require pain relievers) [61]. Among participants younger than 65 years, fever occurred in 17 percent, and severe fatigue, headache, myalgias, and arthralgias occurred in 10, 5, 10, and 6 percent, respectively.
Pfizer ( essentially the same) Safety and side effects – Local and systemic adverse effects were dose dependent and relatively common after the second dose; most were of mild or moderate severity (ie, did not prevent daily activities). Among participants younger than 55 years, fever occurred in 16 percent and severe fatigue, headache, and chills, occurred in 4, 3, and 2 percent, respectively [49]. Rates among older participants were slightly lower. "
This has been what I have heard form friends and family who have been vaccinated. Young people have more side effects, but at the same time they are more able to deal with them.

I listened to that Grantham interview on Bloomberg 2-3 times one day recently. He lays out a convincing case. But there are equally good arguments on both sides.
As far as Grantham’s argument goes he’s focused on three areas: (1) He thinks artificial risk asset impetus has been supplied from over a decade of easing by the Fed and other central banks. Since he doesn’t think this can continue much longer (deficits / unrealistically low rates) he sees an eventual popping of the “bubble”. (2) He sees a near hysterical chasing of return today irregardless of risk - a euphoria he equates with the final stages of bull markets. (3) He takes issue with high valuations in some sectors - technology particularity.
It should be noted that Grantham is more sanguine re value stocks, thinking there are pockets of opportunity in that depressed sector. He sounds downright bullish on emerging markets - if one has a long enough time horizon.
Each investor needs to consider his own time frame, risk tolerance, overall financial situation before undertaking any changes. I’ve grown a bit more cautious over the past couple months. The last two years were good to most investors. So, irrespective of Grantham, I see no compelling reason for a retiree to be overly aggressive at this point. I’m sharing how my allocation has changed in recent months as I try to protect 50+ years of accumulated retirement savings. Your situation is doubtless different and so should be your approach.
* End of 2020: Alternatives 25%, Equity/Balanced Funds 25%, Diversified Bond 25%, Cash & cash alternatives 15%, Real Assets & Commodity 10%.
* Today: Alternatives 33%, Equity/Balanced 20%, Diversified Bond 20%, Cash & cash alternatives 15%, Real Assets & Commodity 7%, Benchmark Fund (PRSIX) 5%.
Explanatory Notes:
- TMSRX accounts for about 50% of the alternative portion. PRPFX comprises most of the rest.
- I’ve gone much shorter on the diversified bond holdings. DODLX is the riskiest one at 50%. The rest consists of short term bond funds like newly opened TSDLX.
- I’ve moved most of the cash into a medium duration TIPS index fund,
- I’ve switched from TRRIX to PRSIX as my benchmark and have added a small allocation to that fund. One difference between the two above funds ... PRSIX commits 0-10% to a Blackstone hedge fund. TRRIX does not.
- There remains a small spec position in a mining fund.

Before they were all the rage, Mrs. Ruffles's employer, which was owned by private equity, merged with a SPAC a few years ago to go public. It has done well based on the share price. Unfortunately, its sponsor started a few more SPAC’s whose mergers have not been so successful.

Regarding being late to the party in buying the stocks of vaccine makers, consider the example of one high-flyer, NVAX. This company, started about 35 years ago by Johns Hopkins scientists, had never produced a successful vaccine until the current entry in the COVID sweepstakes. Every time there was a scare such as SARS and the like, including the flu, NVAX would be touted as the company most likely to get a vaccine candidate to market. The shares rose and fell (mostly fell) in accordance with the rumors; investors did not profit. I’ll grant you a Présidents Day virtual medal if you stuck with this stock, even when it was under $2, and now have a massive profit. Please give me enough time to inform the foundary that they need to strike a medal.
My wife and I had sore arms after our first Pfizer shot February 9 and we are scheduled for the second one on March 2. We feel fortunate and are prepared for a day of chills and fever post-shot.

An extra note: even after her first afib episode and its treatment, my wife's cardiologist said "You must get the second shot".
The danger of Covid outweighs the side effects of the vaccine.
David

I'm just going to add that I did NOT have an afib reaction to the first shot although I've had afib issues for over ten years. Three ablations, every medication known, etc. Again, anecdotal, but don't just assume that the shot will kick it off. All the reactions seem to be hit-or-miss depending on the individual, and prediction seems unfruitful.

It is never too late to buy Moderna and Pfizer stocks. I think health care funds/ETFs will do well for years to come. Pfizer stands to make over $10 billions per year for COVID-19 vaccine, and the battle has just began.

"With so many adverse effects not sure many will take c19 vacc in 2022. Many Healthcare workers report feeling very sick fevers tireness and flu symptoms after 2nd dose...takes 4 6 wks to develop immunity against c19 which may explains reinfection even after 2nd dose vaccines"
OK, so let's just take this apart a little...
"With so many adverse effects".. .
• Exactly how many, as a percentage of shots given?
• Can you cite a reliable source for this?
"Many Healthcare workers report feeling very sick fevers tireness and flu symptoms after 2nd dose."
• Again, exactly how many, as a percentage of shots given?
• Again, can you cite a reliable source for this claim?
"takes 4 6 wks to develop immunity against c19 which may explains reinfection even after 2nd dose vaccines"
• Exactly what is that supposed to mean? What "reinfection"? Are you stating that people who have already had the virus have become reinfected?
John, over the years you have compiled quite a record of unreliable, unsubstantiated, or obviously incorrect statements here on MFO, which you present, often completely out of any reasonable context, as "facts".
While that unenviable record has usually dealt with financial or political matters, I suggest that the issues concerning Covid 19 are far too serious for such careless and unhelpful comments.

Howdy @JonGaltIII
Since the 2010 census, about 10,000 baby boomers a day (retire, too) have crossed the age 65 threshold and by 2030, all boomers will be at least age 65. From 2019 data the boomers are about 72 million in population. Our house is boomers x 2. While there are now and will be failures of individual holdings within healthcare, I still fully consider this a growth area for equity. These folks will require more maintenance than the under 40 age group, yes? There will be the fails of hospitals, health insurance companies and the best laid plans for the next magic drug. There will likely also be continued mergers and acquisitions of big and small companies in many areas. This sector has had its recent funky periods (2015-2016), so it is not a slam dunk; but I still have faith in the broad sectors.
From the devils advocate perspective, One would have to perform an overview of personal holdings to discover how much exposure your holdings have to healthcare now and how much you desire. The 3 below breakdowns give a hint to health sectors from various funds.
Our own personal perspective is provide equity exposure that is meaningful to performance of the entire portfolio. We generally do not hold less than 10% of total portfolio in a given investment area. Performance may allow this number to become 25%; but this is an individuals judgement; based upon portfolio risk and faith in the sector.
Our healthcare holdings travel the road between United Healthcare and genomics and whatever else is in the mix. The healthcare holdings over the years has more than paid for our supplemental insurance plans via United Healthcare. Invest in what you (and many others) use.
Though FSMEX is currently open, the last hard close was a no-notify close at the end of a business; without a grace period.
Lastly, if one were to have a full tour of various medical areas in a large hospital; you'd be able to view a large number of products from companies where you hold investments.
My 2 cents worth.
Take care,
Catch
AS OF 12/31/2020
FSPHX Portfolio Weight
Biotechnology 24.27%
Health Care Equipment 20.25%
Managed Health Care 18.10%
Pharmaceuticals 18.03%
Health Care Services 8.04%
Life Sciences Tools & Services 6.93%
Health Care Technology 1.51%
Health Care Facilities 1.36%
Application Software 0.65%
Research & Consulting Services 0.29%
Other Diversified Financial Services 0.08%
Investment Banking & Brokerage 0.02%
FSMEX Portfolio Weight
Health Care Equipment 55.23%
Life Sciences Tools & Services 23.09%
Managed Health Care 5.75%
Health Care Supplies 3.90%
Health Care Technology 3.79%
Health Care Services 3.46%
Biotechnology 2.34%
Application Software 0.86%
Insurance Brokers 0.52%
Apparel, Accessories & Luxury Goods 0.38%
Research & Consulting Services 0.36%
Textiles 0.22%
Investment Banking & Brokerage 0.03%
FSPGX Portfolio Weight (likely a typical growth index weighting)
Information Technology 44.88%
Consumer Discretionary 16.67%
Health Care 13.49%
Communication Services 10.99%
Consumer Staples 4.53%
Industrials 4.51%
Financials 1.86%
Real Estate 1.61%
Materials 0.80%
Multi Sector 0.54%
Energy 0.08%
Utilities 0.02%

Foreign stuff is still only 10% of my portf. TEN percent, to be exact, and NINE percent of THAT is in PRIDX. It is a SMID fund. I was a bit surprised to see:
21% in Consumer Cycl.
Tech. 17.31
Healthcare 15.32
Industrials 14.45%.
...I'd have figured Healthcare to be on top.
In the old regime before the '08-'09 Crash and prior to Covid, my thinking was that Europe was the "Old World" and was full of "old money," which mostly just sat there, doing... not much of anything. ... But if I'm not mistaken, European gov'ts are putting their markets on a meth-high, just like in the States, and maybe an even stronger dose. Of course, they have the EC to deal with, for member States. And I'm NOT intending anything negative about the EU and how it works. Better than FIGHTING and KILLING in a THIRD World War!
... Years ago, I did some reading about "Red" European bonds and "Blue" European Bonds. I do not think that the EU ITSELF as an entity is issuing any bonds, yet. Which is to say: I don't think there are any "Blue" bonds to buy, yet. Difficult, I suppose, to arrange for such a thing. How would a float like that be funded? In the EU, you have States that are in better health economically than many others....

Interesting reading here. I owned FSELX for a while. I subscribed to the notion that AI will be growing and semiconductors is a prudent long term high growth play. It probably still is but the gyrations with NVidia and Intel - I couldn't take the volatility and sold it. It was probably a mistake. Long term... this is likely a good bet.
Another fund I had was @Puddnhead FSDAX . I bought it 5 years ago before the last administration took office. It was a pure guess that a focus on Defense and build up would be positive for this fund. I did sell it in late 1999 or early 2020 (I can't recall exactly when). Pudd - are you still in it?
I save a little space to speculate in sector funds or "trending" spaces. In 2021 - I'm in EM + Small Cap + Healthcare as my trending...

Not sure about early data but influenza incidents way down this yr compared to previously (probably because of masks)
Dr FU stated previously c19 vaccines maybe annual events from now onward
With so many adverse effects not sure many will take c19 vacc in 2022. Many Healthcare workers report feeling very sick fevers tireness and flu symptoms after 2nd dose...takes 4 6 wks to develop immunity against c19 which may explains reinfection even after 2nd dose vaccines
In Austin Tx they are staring to vaccinate 60 years or older now or if you have other underling med conditions
Stay safe

Sure. Its efficacy rate under trial conditions is virtually identical to Pfizer's. Along with Pfizer's vaccine, it appears to be more effective than AstraZeneca's against the South African strain. At the moment, it (along with some of the other vaccines) is the best thing available.
According to the FDA in its EUA letter:

Based on the safety and effectiveness data, and review of manufacturing information regarding product quality and consistency, it is reasonable to believe that Moderna COVID‑19 Vaccine may be effective. Additionally, it is reasonable to conclude, based on the totality of the scientific evidence available, that the known and potential benefits of Moderna COVID‑19 Vaccine outweigh the known and potential risks of the vaccine, for the prevention of COVID-19 in individuals 18 years of age and older.

https://www.fda.gov/media/144636/download
The FDA goes on to require the following fact sheet to be provided to vaccine recipients:

WHAT IS THE MODERNA COVID-19 VACCINE?
The Moderna COVID-19 Vaccine is an unapproved vaccine that may prevent COVID-19. There is no FDA-approved vaccine to prevent COVID-19.
The FDA has authorized the emergency use of the Moderna COVID-19 Vaccine to prevent COVID-19 in individuals 18 years of age and older under an Emergency Use Authorization (EUA).

https://www.modernatx.com/covid19vaccine-eua/eua-fact-sheet-recipients.pdf

LA Times: The FDA didn’t ‘approve’ Pfizer’s COVID-19 vaccine.
https://www.latimes.com/science/story/2020-12-12/why-fda-didnt-approve-pfizer-covid-19-vaccine-eua

In the case of a vaccine, authorization can be granted if “the known and potential benefits outweigh the known and potential risks,” the FDA says.

Some (most?) people equate that with "generally safe"; I read it as "safe enough".
In anticipation of "look at the evidence" response, here's more from the LA Times:

• It was 95% effective at preventing cases of COVID-19 in both Latinos and non-Latinos.
• It was 100% effective in Black people.
• It was 94% effective in people who were at least 56 years old. (The older you get, the greater the risk of a serious case of COVID-19.)
• It was 95% effective in those who had at least one medical condition that made them more likely to develop a serious case of COVID-19.
• It was 96% effective for people who were obese, another condition that makes people more vulnerable to COVID-19.
Yet none of this was enough for the vaccine to win official FDA approval.

One can certainly disagree with the FDA and assert that the vaccines are "generally safe", i.e. safe for general (not just emergency) use. Everyone is entitled to an opinion.

I have owned the Eventide offering for a couple years--good performance but concentrated in biotech so higher beta than others mentioned as well as expense ratio. Although not a prerequisite, I note that the portfolio manager is a physician which may enhance the on-board appreciation and understanding of therapeutic potential and market of holdings.
Also hold IHI, which may benefit even further once elective procedures regain their pre-Covid status

@bee I read every one of those MFO posts via search. I saw a lot of folks support FSMEX... but I posted on the off chance someone had some info or reasoning why they would prefer FSPHX more. So far, the search is proving FSMEX or the ETF is the favored option from the people here. That’s what is great about this site. The history ‘ search is dense with good info. It also gives me a sense of people’s investing style/. Thanks for sharing. Have already learned a lot from your posts.
One thing I’ve learned over the last couple of years... is to not be so sentimental with funds and keep them just because of past or even current performance when there are better ones out there outperforming and it’s “easier” (lazy) to just keep the one you have.