@JoJo26, I am sorry but when some manager comes out of nowhere and wants to manage my money, he better be prepared to lose his shirt like me. It's one thing blindly investing into GP funds knowing well before that they had a stellar record of managing and stewardship at Wasatch.
I will never invest in a funds without manager ownership. When I made a mistake I have sold. When others have pointed out no manager investment I have sold. And I don't even ask any questions later. It's not a matter of returns, it is a matter of principle. It is irrelevant to me what research says about manager fund ownership. If research showed companies like Wells Fargo who screw customers become the best of companies in the aftermath, does not mean I'm going to open an account with them or even consider doing so. They are dead to me until they are the last bank on earth (since I'm not a hypocrite, but they freakin' better be the last bank on earth). There is a clear choice between who you chose to invest and do business with, and when you have that choice I think we take it. THAT is the only control we have.
And ownership debate has to be relative. It is one thing staying invested in FAIRX when manager has no investment and another when you know he has $46 MM + (last time I checked fews years back). It does make a difference. One reason I never invested with Bill Miller who said he had $1MM investment and was buying a $70MM yacht.
It would be good to know a manager who has $500K invested in his fund, what his net liquid worth is. If is net liquid worth is less than $2MM (say) and he has $500K (for instance) invested that's commendable. We don't know. If I see GP managers start buying yachts for $70 MM I will sell.

As pass through entities, REITs generally don't report their breakdown of ordinary divs, cap gains, and return of capital until January 31. Likewise, funds pass through income, so they can't begin computing what they're passing through until they have info from their underlying REITs. Hence the delay.
Here's Vanguard's FAQ on real estate funds, and American Century's page about their real estate fund tax reporting:
https://personal.vanguard.com/us/help/FAQTaxesContent.jsp#1099REIT
https://www.americancentury.com/content/americancentury/direct/en/investment-planning/tax-center/real-estate-funds.html
I take it as a given that real estate funds report late. What intrigues me is why T. Rowe Price singles out PRSVX in addition to its real asset funds (including real estate) for late reporting.:
https://individual.troweprice.com/public/Retail/Planning-&-Research/Tax-Planning/Prepare-Your-Taxes/Tax-Information-Mailing-Schedule

@JoJo26 , in thinking about the managers investment into their own funds I agree with you. I don't think it matters much about "skin in the game". I may even argue it to be a detriment if the manager applies the portfolio to return what they need from the portfolio. There needs could be very different than yours. Also agree with the 401k analogy in buying company stock.

At least when you invest in the single stock of your employer, your bonus likely isn't tied directly to the performance of the stock. There is, obviously, the idiosyncratic risk of putting your 401(k) in a single investment, which is no doubt stupid. I don't think you entirely understand the point...

@msf wrote:

A cheap, actively managed Vanguard fund will do just fine.

17 Actively Managed Vanguard Funds that beat the index listed here:
funds-newsletter.com/feb17-newsletter/feb17-new.htm

@hank - I like Barber and Odean (the authors of the summary you cited), but as something directed toward nonacademics, the summary glosses over too much for my liking. Here's a copy of the underlying paper: Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors.
For example, they present the odds of picking a big eight winner as 4.1% and the odds of holding only losers as 9.6%. What they don't tell you is how much you would win or lose in each case. If I were to tell you that those were the odds, but in the first case you'd win $1000 and in the second case you'd lose $20, I think you'd be happy to play that game. It's expectation values that matter, not raw odds. By citing the latter, they are appealing to incorrect intuitions.
That's why it's important to go to the paper, which I've only briefly skimmed. You'll find their definition of monthly turnover on p. 779 (pdf p. 7). It's similar but not identical to the way funds (or at least M*) define fund portfolio turnover. Doesn't matter too much - your intuition is likely pretty close here. Yes, Dick Strong certainly set a high bar - 700%+.
From my limited exposure to Taiwan investing (talking with people when I visit), it does feel like there's more trading going on there. Sort of like Silicon Valley, where people in startups keep tabs on their options and company price.
@MJG - Zero entry cost (no load) mutual funds have been around since 1928. On p. 22 of Kiplinger's Changing Times, June 1960, you'll find a list of eight large no load funds along with an offer to get a list of a dozen smaller no loads if you'll send a dime to them. The page does note that "the only way to find a no-load fund like this is to dig into the records yourself." Entry costs were never obnoxious in your lifetime, if one knew where to look. My father owned one of the funds on the Kiplinger page which he gifted to me (UGMA) many years later.
Dalbar keeps talking about the average investor when what it is actually talking about is the average investment dollar. Sharpe doesn't make this error when writing about how the average dollar will underperform the market by the overhead of investing, no more, no less. Which is why it isn't index vs. active that matters, but the cost of ownership. A cheap, actively managed Vanguard fund will do just fine.

I don't always get why people care so much about manager ownership. I get the whole "eat your own cooking story," but if they are truly intelligent and prudent investors, they shouldn't be tying up a bunch of their liquid net worth in the products they're managing - that is not diversifying at all (compensation and investments all tied together... IMO, this is synonymous to employees putting their 401(k) money in employer stock.

It looks like the only manager that has over a $1 million in any fund is Gardiner. He's also the only one to have more than $500,000. Everyone else has $100,000-$500,000 or less. The Global Micro cap only has two people with anything in it (per SAI).

@msf - Found an interesting study which does attempt to quantify "turnover" rate by various investor classes. I'll confess I haven't had time to read most of it. And I don't fully understand how they define "turnover rate."
Maybe food for future thought.http://www.safalniveshak.com/wp-content/uploads/2012/07/Why-Do-Investors-Trade-Too-Much.pdf
Caution: It appears this study is based (at least in part) on investors in Taiwan: "(We) have analyzed the account records of thousands of investors. Our analyses have used data from discount and retail brokerage firms in the U.S. We have also analyzed the trading records of all investors in Taiwan.
(Dick Strong set the trading bar pretty high for the rest of us in his day. :))

https://www.sec.gov/Archives/edgar/data/915802/000104916917000049/fit-grandeurpeakemopm22017.htm
497 1 fit-grandeurpeakemopm22017.htm
FINANCIAL INVESTORS TRUST
SUPPLEMENT DATED FEBRUARY 1, 2017 TO THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR THE GRANDEUR PEAK
EMERGING MARKETS OPPORTUNITIES FUND (THE "FUND") DATED AUGUST
28, 2016
Effective January 30, 2017, Spencer Stewart is no longer serving as a Portfolio Manager of the Fund. Therefore, all references to Spencer Stewart with respect to the Fund in the Prospectus and Statement of Additional Information are hereby deleted as of that date. Blake Walker and Zach Larkin will remain as Portfolio Managers of the Fund.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
FOR FUTURE REFERENCE.

Assuming we are in a period of rising interest rates, I would urge caution on any aggressive, long-duration, HY investment. Most investors are not seeking long-term volatility, and that is exactly what they will likely get. Search for non-index funds with exceptional managers who have a long track record who manage the fund cautiously and who hate to lose money. There are a handful out there, but those who look for good RELATIVE returns could have disastrous years.

Possibly not. HYBs act more like stocks then bonds.
https://www.invesco.com/pdf/HYBRR-FLY-1.pdf
http://news.morningstar.com/classroom2/course.asp?docId=5401&page=4
http://blogs.barrons.com/incomeinvesting/2016/04/12/surprising-strategy-for-high-yield-go-down-in-quality-if-rates-rise/

Hi Guys,
Jack Bogle is a great man. He changed the investment business forever and in so doing he significantly reduced investment costs for all investors. I remember when the entry costs for buying a mutual fund were obnoxious. Yes, for the last 40 or so years, Bogle has sung the same song. But it is a song that has revolutionalized an industry to its very core and deserves repititions.
Index investing now owns roughly 30% of the mutual fund industry market share and is gaining every day. Even a giant agency like the state of California is firing some of their active investment management and replacing them with Index advocates. Returns are likely to improve with that decision as costs are reduced and bad decisions are eliminated.
Index investing will never totally replace active investing management. We need active investors for price discovery purposes. I have seen TV shows that estimated we only need about a 20% to 30% active market players to satisfy that purpose. Indexing still has a long growth potential.
There is reliable data on the average fund holding period for the individual investor. It's about 3 years. Equity fund investors hold their funds for a little over 3 years while bond fund holders are slightly less patient at just under a 3-year average period.
That trading frequency generates sad outcomes for the average fund holder since his return is only about 1/2 of what the fund he invests in earns. Women do better with their investment decisions than their male counterparts.
Here is a Link to the DALBAR site that has a ton of investor data:
https://www.qaib.com/public/qaibquarterly
I suspect most MFOers do not subscribe to the DALBAR service for access. So here is a Link to a brief summary of the DALBAR data designed to encourage a sale of their service:
http://www.dalbar.com/Portals/dalbar/cache/News/PressReleases/DALBAR Pinpoints Investor Pain 2015.pdf
This DALBAR summary tells the sad tale without comment. Here is another Link that interprets these same investor data sets:
https://blog.folioinvesting.com/2012/05/11/the-most-common-mistake-investors-make/
Enjoy. I hope many MFOers are among the more patient investors. Trading frequently is indeed hazardous to our wealth.
Best Wishes.
Additional Input: I referenced the DALBAR research without providing an accessible Link. I just discovered a Link that does yield an example of the DALBAR work. Here is that Link:
https://www.bellmontsecurities.com.au/wp-content/uploads/2015/04/2015-DALBAR-QAIB-study.pdf
I have not read their report in detail, but it appears to support the observation that individual investors suck on average. Of course, no MFOers are average!

FYI: Index funds will grab more than half the assets in the investment-management business by 2024 "at the latest," Moody's Investors Service Inc said in a research note on Thursday.
Investors are increasingly buying relatively cheap funds that mimic benchmarks, while shunning active portfolio managers who strive to beat the market and often come up short. Passive funds currently account for 29 percent of the U.S. market, according to Moody's.
Regards,
Ted
http://www.fa-mag.com/news/index-funds-to-surpass-active-fund-assets-in-u-s--by-2024--says-moody-s-31190.html?print

T. Rowe Price? According to M*, it offers 155 different funds (counting only one share class per fund). But that still includes several clones, e.g. TRAMX and TRIAX (Africa &Middle East - "regular" and Institutional funds). Knock those off and you still have about 115. If you like counting clones, add in about ten VA clones, not to mention clones sold by other companies, such as ITCSX (a Voya-marketed version of PRWCX).
PRCPX might survived if structured as an interval fund. Several bank loan funds started out that way.
Not sure what you mean by average active investor. Do you mean the average investor who invests largely or primarily in active funds? That would be interesting to study.
Or do you mean the average of investors who actively (i.e. frequently) trade? That wouldn't be so interesting, because by definition they're all trading a lot, regardless of what their average is.

As I'm putting together my tax return, I see that Vanguard won't mail the VGSLX 1099-DIV form until later this month. Anyone know why REIT numbers are late, and is there an estimate that I can use?

DSEUX is available at Fido with TF. DLEUX is not (yet) available.

$5K min in IRAs, but $100K min in taxable accounts.

You'd kind of have to assume this would happen eventually. It's too bad because it seems like he's done really well at GP but hopefully they really are as prepared as they suggest. There's a lot of stuff going on between GP, Wasatch, Rondure and even at GP all by itself that isn't very common. I'd be pretty happy if things settled down and they just managed money.

I agree. This is mildly concerning to me. I'm not going to sell my position because I won't be able to get back in, but wouldn't love the "noise" toned down a bit for the rest of 2017.

There's a big difference between multi-sector funds and vanilla investment grade bond funds. The former in general, and PIMIX/PONDX in particular contain mortgage bonds, junk bonds, foreign bonds.
Here's a good 11 page primer by Nuveen on various factors to consider with bonds. It talks about how the starting environment matters on pp. 2-3. Factors such as yield curve steepness and the speed and number of Fed raises.
With those factors in mind, it discusses (and shows graphically) how different types of bonds are expected to react to changes and how they have reacted in fact during different periods of rising rates. pp. 4-5. "Exhibit 4 shows how asset classes with more yield and varied performance drivers generally performed better ..."
It then discusses why this time is different on pp. 6-8. Some of what it mentions: a lower starting interest rate; a domestic monetary policy that is different from that of other countries (this difference may tend to moderate the increase in long term rates); rates rising toward "normal" vs. tightening for the purpose of cooling the economy.
It puts all this together to suggest that "Focusing portfolios on sectors with more yield potential and less sensitivity to changes in interest rates can help offset price declines caused by rising rates. ... We also like broadly flexible, multi-sector bond portfolios in this environment." pp. 8-9.
That's different from what you get in "any other intermediate bond fund."

@MikeM2 This is way more than you are bargaining for but am just now working on a free update to something I wrote long ago. Below is a small part of that and a work still in progress. So I apologize for the tedious read. As you will see below, I am not a fan of diversification. I was unable to attach the equity curves mentioned below. If someone can explain how to attach a document from my computer on the board would be glad to do so. The part on bonds is at the very end.
"So let’s get into my particular style of trading. It may well not be anyone’s cup of tea and that suits me just fine. First off you have to know I have an extreme aversion to risk. Such an aversion that some could argue I had no business whatsoever trying to make it as a trader. So to compensate for my risk aversion I developed a methodology that eliminates risk and volatility as much as possible. I realize the academics might say otherwise, but to me volatility *is* risk. Unlike most traders who thrive on volatility, it is my enemy. My primary goal as a trader is to NOT lose or as little as possible. To cut my losses in the blink of an aye. To not think/analyse - just react when price moves against me.
Once I changed my mindset back in the spring of 1985, my goal was to make money every month. A goal that has remained my primary constant to this very day. I could best achieve that goal by low risk, yet consistently profitable strategies. Hitting singles and doubles and then using the compound effect to accumulate wealth over the years.
For me, profitable low risk trading and consistently compounding my capital over time can be summarized in three words - TIGHT RISING CHANNELS. Tight rising channels have little to no volatility. With the tight rising channel pattern and its inherent low volatility that enables me to deploy (in increments) 100% of my nest egg. So what does a tight rising channel look like. It looks much like my equity curves as previously shown in this update of my futures trading and my mutual fund trading.
You may wonder how I handled tight rising channels while day trading stock index futures - an asset class notorious for its wild intraday swings. What I did was uncover three particular early morning patterns which more often than not led to later day tight rising channels in the futures. I uncovered these patterns from my constant monitoring of the market and the stock index futures via the CNBC tape. Unfortunately the CNBC tape nowadays is a different animal of that back in the 80s and 90s.
I have discussed these day trading patterns ad nauseam in books, magazine articles, and seminars so no need to go into detail on them here. Plus, I overlayed these patterns with a host of indicators, primarily sentiment, on whether or not to take the trade. That is where the art of trading came into play. These patterns were such that I traded maybe 3 or 4 times a week at best.
While consistently profitable as a part time day trader, because of my aversion to risk I was unable to ever trade more than one contract. The stock index futures are leveraged vehicles and leverage can be a killer. My monthly profits were a very modest and mundane $716 a month over a 122 month period. I had other part time employment which paid the bills. This enabled me to roll my day trading profits into the trading of mutual funds. That is where I made my real money as a trader. In fact, there were two monthly periods where I made more money in the funds than the entire 122 months I day traded the stock index futures.
So why mutual funds? Primarily because since they are diversified with a large number of holdings, they are more prone to tight rising channels when they are in uptrends. Secondarily, everyone trades the futures, options, and individual equities, while very few trade mutual funds. That alone, not following the trading herd, is reason enough for me. My entire life I have never been a follower or into grouthink. So I would like to believe that streak of independence is also what led me into the trading of mutual funds.
In the 90s, I was focused most on trading sector funds - technology, healthcare, leisure, etc. as well as small cap growth funds. While Fidelity had a host of sector funds, they also imposed short term trading fees. That led me to INVESCO which also had several sector funds and where there were no fees for in and out trading. I also had a trading account at the now defunct Strong Investments.
I believe a large part of anyone’s success has an element of luck - being in the right place a the right time. I could not have been any luckier than having my accounts at INVESCO and Strong. I could trade free of any commissions and fees and as often as I wanted. I fully participated in the new fund effect back in those days being that both firms brought new funds to the market frequently. I could also dateline international funds whenever the datelining pattern occurred.
Datelining and the constant in and out trading without fees are now a thing of the past. But I adjusted. As my account grew over time, my aversion to risk became even more extreme. That led me to the trading of bond mutual funds, more specifically high yield corporates, high yield munis, and floating rate. This was an easy transition as junk bonds had always been my one true love in the financial arena dating back to the early 90s when I began trading them along with the sector funds. The bond funds were custom made for me because they had even tighter rising channels due to even less volatility. So it was much easier to deploy 100% of my trading capital there."
























(From an email)
Grandeur Peak Global Advisors
Dear Fellow Shareholders,
Spencer Stewart has decided to follow his heart and pursue a new path. As a result, he will be leaving Grandeur Peak shortly. Spence joined us in August of 2011, just after we had set up the firm. His first day with Grandeur Peak was on a plane to South Korea, and he has probably logged more miles than anyone else at the firm since then. Spence has been a great colleague, and has proven that he is a skilled investor. We are very grateful for his dedication and hard work to help us bring the vision of Grandeur Peak to life.
As of January 30th, Spence is no longer a lead portfolio manager of the Grandeur Peak Emerging Markets Opportunities Fund. Spence and I have been the managers of the Fund since its inception in 2013. For now, I will be the lead portfolio manager and Zach Larkin will continue as the guardian portfolio manager. Instead of immediately replacing Spence with another co-manager, Stuart Rigby will step in as a senior analyst to help in our oversight of the portfolio. Since the Fund is essentially a carve-out of our global portfolio, the management of the Fund is already part of our team’s daily portfolio considerations.
Beyond Spence’s investment insights and role managing the Emerging Markets Fund, he is also the primary analyst on roughly three dozen companies, so he leaves sizeable shoes to fill. Fortunately, because of our structure, the entire team is engaged in vetting and selecting our portfolio holdings, we have multiple people involved in the day-to-day management of each fund, and we have a secondary analyst on every owned company. In this respect, we already have people in place to fill the hole.
We wish Spence the very best in selecting his next pathway. We will certainly miss him around the office (and on the road).
If you have any further questions, feel free to reach out to our client team (Mark Siddoway, Amy Johnson, or Eric Huefner). You are welcome to reach out to me as well.
Best Regards,
Blake
Blake Walker
CEO
[email protected]
801-384-0002
The objective of all Grandeur Peak Funds is long-term growth of capital.
RISKS:
Mutual fund investing involves risks and loss of principal is possible. Investing in small and micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.
Investing in foreign securities entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investments in emerging markets are subject to the same risks as other foreign securities and may be subject to greater risks than investments in foreign countries with more established economies and securities markets.
An investor should consider investment objectives, risks, charges, and expenses carefully before investing. To obtain a prospectus, containing this and other information, visit www.grandeurpeakglobal.com or call 1-855-377-PEAK (7325). Please read it carefully before investing.
Grandeur Peak Funds will deduct a 2.00% redemption proceeds fee on Fund shares held 60 days or less. For more complete information including charges, risks and expenses, read the prospectus carefully.
Grandeur Peak Funds are distributed by ALPS Distributors, Inc. (“ADI”). Mark Siddoway, Amy Johnson, and Eric Huefner are registered representatives of ADI.
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