@Baseball_Fan,
Concentrated funds are OK as long as the managers are not averse to portfolio turnover. M* shows MRFOX has zero turnover (8/3
1/2023) and AKREX at 2% turnover. Not sure what the current MRFOX turnover is. I was hoping with heavy inflows they also would be able to buy new or more promising investments. But when I look at holdings at M*, as of Feb 29, of the
18 holdings 7 are three star (means fairly valued) and rest are two star or one star (means overvalued). No 4 or 5 star holdings (nothing in its holdings was undervalued). M* also says Portfolio P/E was 20, the same as for SPHQ as of that date (I estimated working backwards).
Based on
https://marshfieldfunds.com/As of the end of Q
1, the fund held 20% in cash. The fund probably received another
10% cash in inflows since Q
1. The fund strategy says, "The cash position will, on average, be in the range of 0-25% of the portfolio and will be an output of the Adviser’s buy and sell decisions, not a tactical maneuver."
The fund commentary indicates the fund was not static and had turnover during the quarter.
"The broad market today seems to be hosting a tent revival of sorts, with tech stocks as the talismanic centerpiece. But this too offers us an opportunity: instead of bemoaning the exorbitant price of stocks, we rejoice in our ability, as just noted, to sell those holdings that are hitting highs we believe are unlikely to be sustained or surpassed, at least in the medium term. Markets like this, whether held aloft by hope, euphoria, or (ir)rational exuberance, do tend to return to earth at some point. If opportunity is knocking today, we’ll answer the door with a smile. What we won’t do is join the pilgrimage to the top of the cliff. But by this point, we assume we’re preaching to the choir."
During April, the fund lost 4% while SPY lost about 6% but I guess that was not good enough for the fund to put some of its cash to work. I am guessing the fund can return zero and underperform until the current bull market tapers out or there is a material correction in the market. I guess, be prepared to test your patience for another 5 months. The Q2 portfolio and commentary may not be available timely (until much after the market conditions may have changed) to be highly relevant. The difficulty with the fund is lack of contemporaneous information but they do not have to worry about such tasks when the inflows are unrelenting.
"The Fund is premised on the belief that in order to outperform the market, an investment
strategy needs to be different from the market in as many ways as possible that add value on a risk-adjusted basis." [Bold added] Do not say you were not forewarned!
The problem with AKREX is that once Chuck left, the remaining team is probably just sitting on the existing portfolio clueless and watching heavy outflows. But I remember even when Chuck was around the fund had very low turnover, which is one of the reasons why I did not invest in AKREX even during its hay days.
Morale of these funds is that I think investors (unlike you) that have inertia in getting out of underperforming investments, should not invest in specialist funds like this. Sticking with
