https://www.sec.gov/Archives/edgar/data/926678/000119312523208784/d538281d497.htm
497 1 d538281d497.htm 497
BRANDES INVESTMENT TRUST
Brandes U.S. Value Fund
Supplement dated August 10, 2023
to the Fund’s Summary Prospectus and Prospectus dated January 28, 2023
and the Statement of Additional Information dated January 28, 2023
Brandes Investment Partners, L.P., the Advisor to the Brandes U.S. Value Fund (the “Fund”), has recommended, and the Board of Trustees of Brandes Investment Trust has approved, the liquidation and termination of the Fund. The Advisor’s recommendation was primarily based on the fact that the Fund is not economically viable at its present size, and the Advisor did not anticipate that the Fund would experience meaningful growth in the foreseeable future. The liquidation is expected to occur after the close of business on September 28, 2023. Pending liquidation of the Fund, investors will continue to be able to reinvest dividends received in the Fund.
Effective August 17, 2023, the Fund will no longer accept purchases of new shares. Beginning September 25, 2023, the Fund’s assets will be converted into cash and cash equivalents, as a result the Fund will no longer pursue its stated investment objective and policies effective September 25, 2023. Shareholders of the Fund may redeem their investments as described in the Fund’s Prospectus. Accounts not redeemed by September 20, 2023, will automatically be closed and liquidating distributions, less any required tax withholdings, will be sent to the address of record.
If you hold your shares in an IRA account directly with Northern Trust Company, you have 60 days from the date you receive your proceeds to reinvest your proceeds into another IRA account and maintain their tax-deferred status. You must notify the Fund or your financial advisor prior to September 28, 2023 of your intent to reinvest your IRA account to avoid withholding deductions from your proceeds.
Please contact the Fund at (800) 395-3807 or your financial advisor if you have questions or need assistance.
This Supplement should be retained for future reference.

We know that compounding on investments made early in one’s lifetime makes a huge difference in one’s financial success. Even though I was a very low earner when I started my career in 1970, we still were able to buy a house in 1973 based on my income alone. Interest rates were around 4%. I borrowed the 5% down payment from my father. My employer, despite paying me a pittance, paid 10% into my retirement account at TIAA. With one kid, one starter home, one car, and a frugality drummed into us by our Depression-era parents, we eventually realized quite amazing gains on what we honestly did not know would become our sources of “wealth.”
In today’s economy, as @Anna aptly points out, the young couple setting out on a path similar to ours, face overwhelming obstacles. The price of a starter home, in almost any part of the country, now presents the biggest barrier, to say nothing of the huge down payment. What employer these days would be paying 10% of base salary into retirement? It seems trite to say that our kids won’t do as well as their parents, a complete reversal of what had been accepted wisdom about the American economy. The American Dream, for a great many of our brethren, is nothing more than a chimera. The participants on MFO, IMHO, have a whole lot to be grateful for. I’m not sure that my kids, who are between 25 and 43, will be able to feel secure in their retirements.

If the other shoe is dropping, it would be interesting to know if anyone here changed their investments based on that.

The shoe never stopped dropping. People just took their eye off it while AI animated the reporting of the financial press on Mr. Market's animal spirits.
Bank CD's, money markets, or T-Bills have been a constant topic of conversation here for the past few months. Some people here seem to be tweaking their short-term investments on a regular basis; and in line with their own needs, and perceptions of risk. Count me in that crowd.
Moody's report should not surprise anyone that has taken cash out of a bank deposit,or CD, and put it someplace else that pays a higher rate, or offers a competitive rate with more flexibility.

By Nick Maggiulli
Of Dollars And Data focuses on personal finance using data analysis. Nick Maggiulli is the Chief Operating Officer for Ritholtz Wealth Management LLC.
Why Income is the Key to Financial Success

Moody's downgraded the credit of several regional banks, citing rising costs and the troubled commercial real estate sector.

It’s been about five months since Silicon Valley Bank and Signature Bank collapsed. Shortly afterward, First Republic folded. But since then, things have been relatively calm in the banking world.
That is, until this week.
The ratings agency Moody’s announced that it downgraded the credit ratings of several regional banks, citing problems related to rising interest rates and troubled loan portfolios. A lot of the problems in the banking sector that emerged earlier this year haven’t gone away.
One big issue Moody’s cited is bank deposits. That’s because rising interest rates have put pressure on banks to prevent customers from pulling their money out.
“In order to keep those deposits, they have to pay more,” said Ana Arsov, Moody’s co-head of bank ratings.
Deposits started falling about a year ago. But after banks announced their second-quarter financial results last month, Arsov said, it became clear that their source of funding for loans is still strained.
“We believe that the system is relatively stable, but those funding strains will continue,” she said.
Moody’s also said a lot of regional banks could run into trouble with their commercial real estate loans, since many borrowers aren’t producing revenue from all the offices that are still sitting vacant.
“The smaller banks tend to have more of that local footprint, so that makes them a little bit more susceptible to commercial real estate and commercial office space as well,” said Stephen Biggar, a bank analyst with Argus Research.
Biggar said banks are well aware that some of those loans could go bad. And they have been taking steps to prepare: “Adding more to loan loss provisions and doing more to the credit underwriting to make them less susceptible to future problems in that area.”
Regulators have stepped in too, with proposals meant to make the banking sector healthier overall.
But regulators aren’t likely to impose new rules that quickly, said Kathryn Judge, a law professor at Columbia.
“Generally speaking, you don’t want to force banks to undergo significant and costly changes during periods of time when credit is less available,” Judge said.
She said this week’s downgrades are a sign that that period of time is going to last a while, even though dramatic bank failures, like those earlier this year, are likely behind us. “We’ve instead shifted to the mode of the turmoil that is more of a slow burn, where the various challenges that these banks are facing continue to persist.”
That means regional banks will keep paying more interest to depositors and lending out less of their deposits.
Justin Ho reported this story from Vista, California.

@wabac,
You raised good points. A portfolio can have several goals. Performance is always important. But, I also think that risk-adjusted performance is more important, at least for me, and that can be measured by the Sharpe ratio.
The following are several simple measurements I set for myself
1) My stock portion must beat the easiest most common index VOO/VTI. If I don't beat it, my stock portion must have a better risk-adjusted performance.
2) My bond portion should beat good bond funds, starting with BND and DODIX.
3) If I have 50/50, must beat W+W (Wellington, Wellesley)
4) For a conservative portfolio, must beat Wellesley.
The above is just a start, a minimum. I also know about great funds over the years, such as PRWCX and PIMIX.
I'm very critical of my own portfolio. It's all data-driven. No excuses are allowed. It doesn't matter if you use 3 or 10-15 funds, or how you do it.
Suppose I want to set up an easy buy and hold portfolio for a retiree, see below 2 real-life examples.
1) In order to make my wife's investment decisions easier, I set up a written plan for her to invest in only 3 funds. I only trust 2 choices indexes + Vanguard funds managed by Wellington. Wellington Management is the oldest, it's conservative, team style, and not one dominant manager, with a very cheap expense ratio. Since our money isn't with Vanguard, we would have to own the more expensive funds(not Admiral), but it's still cheap.
For a younger age, until age 70-75 and still having a taxable account...45% VWINX...25% VWAHX(HY Muni)...30% VSMGX. Because of HY Muni bonds which are hybrid, this portfolio is more like 40/60
Older than 70-75 or taxable account is gone: 40% VWINX(40/60)...30% VWEHX(HY Corp)...30% VSMGX(60/40). Because of HY Corp bonds which are hybrid, this portfolio is more like 45/55.
2) An older relative retired around 2002 and told me he saw several financial advisors and they want to charge him 1% and he really doesn't trust any of them. Markets are volatile and he wants a stable LT simple portfolio and all his money is at Vanguard. Based on the amount of money he had, he needed about 3.5% yearly withdrawal and wants a conservative portfolio. I told him he can be in just 35-40% stocks and the rest bond and to invest in just 2 funds VWIAX+VCCGX. If he needs more money, just sell shares from both funds at equal amount of money. Just keep several thousands in the bank, use your SS and distributions from these 2 funds and if you require more just sell shares from both at 70/30 (VWIAX+VCCGX).
In the first 10-15 years, this guy called me every 2-3 years and thanked me how I saved him so much money and how it works well.
Below are the results(link)including 3.5% annual withdrawal, and they show that KISS investing and spending worked very well. This portfolio was able to support the 3.5% and grow at 6% (including the 3.5% withdrawal).

@FD - Personal offense? None. But thanks. I appreciate the sentiment.
From your latest linked article - Why Average Investors Earn Below-Average Market Returns :
“Investor behavior is illogical and often based on emotion. That does not lead to wise long-term investing decisions.”
Yes. That’s pretty widely known and has been discussed here before. But it says nothing regarding your earlier (unsupported) assertion, “I have seen a lot more investors who lag the market when they own more funds, I mean over 5-7 funds.”
In addition to the obvious disconnect between what you asserted earlier and what your linked article says, let’s recognize a few relevant facts.
- “Average investors” includes all those with workplace defined contribution plans. That’s a lot of people who may have little or no investment interest or experience. And it includes all ages, from young adults buying their first home to folks with 50+ years investing experience. Lately, too, it has come to include the thrill-seeking “meme” crowd with little regard for fundamentals. All these and more fall within the realm of ”average investor”.
- “Average investors” don’t frequent investment forums like this one. Can’t speak for wherever else you’ve been, but this community represents a select slice of the investing public. Participants possess above average intelligence, are well read and highly motivated. Some have professional backgrounds in finance or financial journalism.
- To your initial assertion about number of funds … . I will contend that 8-10 high quality funds along the lines of PRWCX or JHQAX should perform as well on average as 1 or 2 equally high quality ones. The number of funds alone does not determine whether one “beats the index.” The overall quality of those holdings may.
- Indexes carry no cash reserve as funds do. So they have a built-in advantage actively managed portfolios do not possess.. “Tit-for-tat” active will underperform an index.
- Not all investors want to track or match the S&P’s performance. Some of us are pleased we didn’t lose 18% last year. We’ll sacrifice some future return if it means avoiding such dramatic 1-year losses.
- Your criticism of owning more than 5-7 funds misses the point that many investors manage several portfolios. I have a Roth, Traditional IRA, and Taxable account. Each is viewed in a different time-frame and tax perspective. Some have long-term portfolios, mid-range ones and short term investments for more immediate needs. Some manage for a spouse. Some have limited-option workplace plans - plus other outside investments.
Thanks for the linked article. But, since it contained nothing I didn’t already know, I checked the “not helpful” box at the end.

+1 old joe Maybe FD is short for Financial Demagogue or Dork !

Us cibc CD rates
12 MONTH CD
5.36% APY
24 MONTH CD
4.75% APY
We may charge a 30 day penalty if you withdraw your CD funds before maturity.
We’re backed by CIBC, a 150-year-old Toronto-based global financial institution. Our U.S. headquarters is in Chicago, Illinois.
https://us.cibc.com/en/agility/certificates-of-deposit.html

Selecting the best mutual funds to achieve long-term financial goals remains a challenging task for investors. Russel Kinnel, Director of Manager Research for Morningstar, has dedicated nearly three decades to this endeavor. He oversees Morningstar’s North American Morningstar analyst ratings committees, responsible for vetting the prestigious Morningstar medalist ratings frequently cited in the financial world.
Link

Thanks @dtconroe,
Hope both of us are alive & well in 15 years.
Worth noting that money market funds back in the 70s and up to the 2007-09 financial crisis were less regulated and, while quite safe, took on more risk than they can today. So those 15-20% rates are a bit over-stated. Apples to oranges.
Doubt I’ll ever succumb to going all to cash. Admittedly, that would have been the smart move 18-20 months ago before the bottom fell out of equities. I enjoy investing and tracking a widely diversified portfolio too much to give it up (a “fool’s errand” perhaps). But the bumps in the road are getting harder to ride out with age.

“ … in my lifetime as an investor, I haven’t seen cash yields this high ”
Gosh, I do remember earning 15-20% on money market funds during my early working years. :)
Along with that, the aisles in grocery stores (1970s) were often filled with store employees busy changing the previously marked prices to try and keep up with the ongoing increases. Without bar codes / scanners every bottle of ketchup or loaf of bread carried a marked price. One wonders if all this remarking itself contributed to the inflation rate.
No doubt. Cash at today’s 5% (+ -) looks very compelling, especially to the “over the hill” crowd.

I am also experiencing some degree of nostalgia with some of the recent posts, especially looking at the past 15 years. Around the 2000 to 2007 period, CDs were paying 5+% and I was shopping banks for the best CD rates and terms. Then the financial markets went into a crisis period, with banks closing, major business closings, and the government cutting rates, stimulating the economy, and trying to focus on financial stabilization and economic growth. I have never seen anything like the Covid years, supply chain and manufacturing disruptions, and the renewed fight against inflation in the last few years. 5+% CDs are back, we are fighting inflation again, but now I am in retirement, focused more on preservation of assets than accumulation of assets. I hope I am around for another 15 years so I can participate in investing philosophy, but the odds are that I will not be alive.

Good news is that Fitch is NOT downgrading all US financials to AA+ (as the S&P did in 2011). So, Fitch is maintaining AAA ratings for "New York Life Insurance Company, Northwestern Mutual Life Insurance Co. and Teachers Insurance and Annuity Association of America".
https://www.fitchratings.com/research/insurance/insurance-aaa-unaffected-by-us-downgrade-financial-conditions-key-risk-02-08-2023

@Yogibearbull. Thanks. I was wondering today whether some U.S. corporations carry a higher credit rating than the U.S. government. Sounds from your comment that some do. Quite remarkable.
Fitch did reference political instability in the reasons for the downgrade. Something everyone should keep in mind.

Good news is that Fitch is NOT downgrading all US financials to AA+ (as the S&P did in 2011). So, Fitch is maintaining AAA ratings for "New York Life Insurance Company, Northwestern Mutual Life Insurance Co. and Teachers Insurance and Annuity Association of America".
https://www.fitchratings.com/research/insurance/insurance-aaa-unaffected-by-us-downgrade-financial-conditions-key-risk-02-08-2023

Try this yourself.
Check your credit score.
Go apply for a bunch of credit (credit cards, student loans, HELOC,etc.)
Max out all of these cards
Apply for more Credit
Max that out
You discuss your credit related debt with your wife… she says, “raise your debt ceiling”
You divorced your wife on grounds of insanity
Your net worth is cut in half
Your 2.5 kids move back in with you
Your Ex-wife never moves out because it's too expensive for her to buy or rent
She starts dating your financial advisor
He now collects more than 1% for his services
You lose your job
You check your credit…oops, you have been downgraded.

Highlights:
It’s important to recognize how your financial behaviors may impact your credit scores
There are several factors that are used to calculate credit scores
There are many different credit scoring models, or ways of calculating credit scores

Makes sense to me why US Credit score just dropped!
https://equifax.com/personal/education/credit/score/how-do-your-actions-affect-your-credit-scores/

@old_Joe
I agree the lack of a sweep account is a very big negative for Schwab. I just forgot to move a large T bill redemption to a MMF for a month and figure it really cost me
Vanguard is a disaster, Schwab is cheap and costing me money, but I hate to put all my accounts at Fido.
I worry about a company that is privately help and does not have to report financial results regularly.
There are problems with them all
Anybody else satisfied with other alternatives?

Timing for debt downgrade is never ideal. While odd, Fitch had the US on negative outlook and may have deliberately avoided the period around the debt-ceiling fiasco, a mistake that the S&P/McGraw Hill made on 2011.
Only 2 US nonfinancial companies, JNJ & MSFT, are rated AAA. These aren't related to the US debt rating.
But in 2011, all US financials were downgraded to AA+ or lower on the theory that no US financial could have debt rating higher than the US. This when only the S&P did the downgrade. IMO, some US financial could easily be AAA, if not for this artificial ceiling.
There was a temporary hit to stocks in 2011 after the S&P downgrade, but McGraw-Hill suffered more. Basically, it disappeared as a public company, and today, there are public S&P Global/SPGI (in the meantime, it also gobbled up all of the Dow Jones indices) and only private McGraw-Hill Education.
For years, people said that 2 out of 3 major ratings counted, so the US remained AAA/Aaa even after the S&P downgrade.
But now, with Fitch (owned by Hearst; also publishes Cosmopolitan, Seventeen, etc) joining S&P, 2 out of 3 becomes AA+.
Moody's/MCO (with 13.45% owned by Warren Buffett/BRK) remains at Aaa.
The SEC recognizes 10 NRSROs - Nationally Recognized Statistical Rating Organizations, but so far, the big 3 count. Note that DBRS is now owned by M*; Kroll is the old Duff & Phelps. www.sec.gov/about/divisions-offices/office-credit-ratings/current-nrsros
Edit/Add. There was a Fido alert last night of an event in my brokerage account. It was on the downgrade of my Treasury holdings. Schwab & Vanguard haven't sent similar alerts yet.

SPY and IEF (7-10 yr Treasuries) 1 year prior and 1 year after, July, 2011. Keep in mind, many financial markets and economies had still not settled from 2008, especially Europe. One would have made money in many bond areas.
Global markets Aug 1, 11:30pm EST (active data, click anytime)
I don't think the big money, at this time, cares about the Fitch move.
Edit: PERHAPS a nice excuse to take some profits from the hyper performance this YTD in some categories, at least by some of the big players.

Similar story to @Crash / Warnings started popping up a year ago on my ipad that “Your device is infected by a virus.” Ignored them at first. After a few weeks I could see signs they had ripped into my DejaOffice files on the device and had been trying to export the contents. Will never know how much, if any, they made off with. This is having a modern device updated regularly with Apple’s latest IOS. First known episode in over 20 years using both Apple products and the DejaOffice app. (You can store an awful lot of personal / financial data over that time.)
Anyway, eventually I paid for a basic Norton anti-virus package. No more problems. But the issue did cause me to have to delete all the contents of my ipad and start over. Fortunately, had saved copies of older uncorrupted DejaOffice files I was able to reload - though somewhat out of date.
Footnote: This wasn’t too long after moving from cellular based wi-fi (slow) at home to Starlink’s broad-band service (much faster). I’m thinking the faster internet connection made me more vulnerable to being hacked. Just a guess.
No problems since all that.
Well … a few months later I received a notice from IdentityGuard that someone had tried unsuccessfully to change the password on my account with them. It failed because the person’s identity couldn’t be confirmed. Had the attempt succeeded, they’d have gained access to all my credit reports / files.

I believe that both Fido and BoA used to use Yodlee but no longer do so.
FullView is okay, used to be superior, but now My Financial Picture is more quickly complete and up to date, in my experience. Also a simpler account management interface.