Morningstar conference: the Day Two agenda Dear friends,
Day Two is always a bit challenging.
8: Cliff Asness of AQR and Rob Arnott of Reseach Affiliates riff on "the big picture" questions as the General Session speakers.
9: John Bragg and Steve Scruggs, Queens Road Value and Queens Road Small Cap Value. We'll likely chat about the recent reopening and why you'd do it in a market they're skeptical of.
11: Shannon Ericson, LMCG International Small Cap fund and LMCG Global Market Neutral Fund. The global market neutral fund has a, well, global portfolio, which strikes me as an interesting twist.
12: Mark Travis and Matt Berquist, Intrepid Capital and the Intrepid Funds. Mr. Travis is the firm's founder, president and CEO, as well as a portfolio manager. Matt is one of the marketing/media guys.
1:45: David Marcus, Evermore Global Value. He's a "special situations" investor with roots in the Mutual Series funds. Really thoughtful guy, wonderfully diverse experiences.
2:30: Matt Shaver, Lyndhurst Partners. Lyndhurst is a sort of marketing firm that tries to identify a handful of small, distinctive firms and help them succeed.
3:30: Mike Dzialo, founder of Managed Asset Portfolios and manager for Catalyst/MAP Global Capital App fund and Catalyst/MAP Global Total Return. Tiny, solid 3-year numbers.
5: John Blau, Poplar Forest. Mr. Blau had been president of Oppenheimer Asset Management and now leads to outreach/marketing effort for Mr. Harvey and the Poplar Forest funds. I'll be likely to ask about the relatively new Outliers fund.
7: Dinner with Gregory Nathan, manager of FPA US Value (formerly Perennial) since September 2015. It's been an ugly first year and the fund has surprising low cash holdings (10%) by FPA standards. I'll be interested to hear what he has to say.
In any case, if you have topics you'd like me to pursue with any of these folks, please do let me know. I'll learn what I can on your behalf.
As ever,
David
discussion topics for Andrew Foster Dear friends,
Charles and I will have dinner Monday with Andrew Foster, "the seasoned and skilled skipper" (saith Morningstar) of Seafarer Overseas Growth and Income.
Emerging Markets High Yield Bond - What is his 1 yr,
5 yr, 10 yr outlook.
Get Real: Billions Set To Pour Into Real-Estate Investments According to a recent Morningstar Instant Xray analysis (6/3) my portfolio holds about 6.1% in real estate while the 500 Index hold about 2.4%. This is about 2.5 times what the Index holds so, with this, I plan to do nothing as some of my funds might be buying (maybe some selling). Anyway, 6% to 9% is all I wish to hold in any of the minority sectors of materials, real estate, communication services and utilities; and, 9% to 12% in any of the majority sectors of consumer cyclical, financial services, energy, industrials, technology, consumer defensive and healthcare. Overall in the minority sectors I am holding a total of 28% which is more than double the 500 Index weightings with the balance being held in the majority sectors (72%). On average this computes to about a 7% weighting in each of the minority sectors and a 10% average weighting in each of the majority sectors.
Get Real: Billions Set To Pour Into Real-Estate Investments FYI: (This is a follow-up article)
A big change is coming in how stock indexes measure the market, one that's likely to push tens of billions of dollars into real-estate investments, according to estimates. All that cash could drive further gains for a group of stocks that's already done quite well since the financial crisis. Critics say it could also make an area of the market that they call overvalued even more so.
The deluge of cash is the result of a re-think by index providers about how they see the market's construction. The Standard & Poor's
500 and other indexes have long split the market into 10 main sectors, such as technology companies or utilities or industrials. After the market closes on Aug. 31, S&P Dow Jones Indices and MSCI will carve out real estate to become the 11th sector.
Regards,
Ted
http://bigstory.ap.org/article/ebe0d17e6ae747f89df70a400299c2bd/get-real-billions-set-pour-real-estate-investments
Vanguard: How America Saves FYI: This summer marks the 10th anniversary of the Pension Protection Act of 2006 (PPA)—landmark legislation designed to enhance workers’ retirement security—being passed into law. Coinciding with this milestone, Vanguard today released a special 1
5th anniversary edition of its How America Saves report with findings that reflect the impact of the law on improving plan construction and participant investing behaviors in defined contribution plans over the past decade.
How America Saves, Vanguard’s comprehensive annual defined contribution report, has become a premier source of 401(k) data and serves as a resource to Vanguard plan sponsor clients and the industry at large as a plan benchmarking tool. First published in 2000, the report is based on 1,900 plans and 3.9 million participants.
Regards,
Ted
https://pressroom.vanguard.com/nonindexed/HAS2016_Final.pdf
Closed End Junk Bond Funds Bought this in early Dec.Reinvesting monthly divs.Cut div by
5% in Feb.No history of Roc distributions.Watch for weakness if oil prices drop.Non marginable
@SchwabBabson Capital Global Short Duration High Yield Fund
(Ticker:BGH)
Strategy
Fund will invest at least 80 percent of its managed assets in corporate bonds, loans and other income-producing instruments that are rated below investment grade
Fund may invest up to
50 percent of its managed assets in bonds and loans issued by foreign companies
Seek to maintain a weighted average portfolio duration of three years or less
Weighted AveragesMarket Price ($) $88.
57
Duration (Yrs) 2.33 yrs
Leverage 23.60%
Global
36.
57% non-US
Number of Holdings
130 issuers
as of 4/30/2016
Industry % of AssetsOil And Gas 14.09%
Chemicals, Plastics And Rubber 9.32%
Healthcare, Education And Childcare 8.16%
Automobile 6.74%
Finance 6.
56%
Cargo Transport 4.8
5%
Containers, Packaging And Glass 4.67%
Electronics 4.27%
Telecommunications 4.26%
Leisure, Amusement, Entertainment 4.23%
http://www.babsoncapital.com/assets/user/media/Babson_Capital_Global_Short_Duration_High_Yield_Fund_Factsheet.pdfhttp://www.cefconnect.com/fund/BGH
any of these look good? Interested to see this. I've been tracking LXP, Lex. Realty Trust. It's on their list. But by now, I'm thinking that it would be smart to wait for a pullback. Too close to
52-week high, yes? Screaming BUY, according to Morningstar. But that is literally just one man's opinion. If anyone's interested to look further, check it out on a page called "Simply Wall Street." You can hunt down any stock there. Limit of 10. When that happens, erase your cache, and it will magically think you are new, when you go back to it. You can construct a stock Watch List there, also.
http://www.morningstar.com/stocks/XNYS/LXP/quote.html
How Aberdeen Small Cap Fund Crushes Its Peers Crushes its peers? From the current manger's start date through July 2015, it barely beat the category average. It's had one good year.
China's A-Shares Prepare To Flood Your ETFs FYI: (Click On Article title At Top Of Google Search)
This week could be a momentous one for index geeks. A ruling on how China’s mainland stocks are classified would affect $1.
5 trillion tied to emerging-market indexes operated by MSCI—and, ultimately, the exchange-traded funds based on those benchmarks.
At issue is whether MSCI deems China’s A-shares—stocks listed on exchanges in Shanghai or Shenzhen—as “emerging” instead of their current status as unaffiliated “stand-alone” players. MSCI has formally insisted since 2013 that improvements in China related to market accessibility could lead to a change in the designation.
Regards,
Ted
https://www.google.com/#q=China’s+A-Shares+Prepare+to+Flood+Your+ETFs+Barron's
any of these look good?
Intermediate Term Bond Fund @msf- thanks again for your help on this stuff. I did miss the "little balloon", but in going back to take another look they
both seem to have the same balloon note, so all things being equal, something still doesn't add up.
PGBOX has (unless waived) a front-end load of up to 3.7
5%.
So $100 invested Jan 1 would have left you with $100 x (1 - 3.7
5%) x (1 + 3.09%) = $99.22, a loss of 0.78%.
But WOBDX shares have no load, so $100 would have gotten you $100 x 1 x 3.16% = $103.16.
Intermediate Term Bond Fund @msf: Schwab says YTD (as of
5/31) return for WOBDX is 3.16% vs -0.78% for PGBOX yet the only difference between the two seems to be an ER of 0.
59% for WOBDX vs 0.76% for PGBOX.
Can that be right? The historic ratings summary for WOBDX is also significantly better than that of PGBOX. How to account for such a difference between two funds with essentially the same makeup?
It's just one fund - simply two different share classes (like Vanguard Investor and Admiral shares). I found the retail class by looking at the M* "purchase" page for WOBDX and picking another share class. So even before looking at the Schwab site, the answer must be "no, that cannot be right" assuming both figures are from
5/31, and the figures reported are purely fund performance.
But they're not. If you look at the
Schwab performance page for the A shares, you'll see a little "balloon" to the right of "YTD Return". Mouse over that. It reads:
YTD Return is adjusted for possible sales charges, and assumes reinvestment of dividends and capital gains
This points to something I think Schwab (and other brokers) do wrong. They incorporate the impact of loads into funds that they sell load-waived. It makes the funds look worse than they are. You're seeing this in performance figures that are lower than what you'd get with the load waived.
This problem also shows up in the M* star ratings on their pages. Schwab reports PGBOX's 3 year and
5 year ratings as two-star. But the
3 and 5 year ratings of PGBOX.lw are three-star.
Intermediate Term Bond Fund I like every fund mentioned above but if you don't already own it, its BIV all day every day. Great overall performance over every relevant time frame, up in 2008, only one down year ever, a mere 3.58%. Great solid portfolio, inversely correlated with equities, low ER. Don't over think it.
