SAGAX FUND THOUGHTS? Here's what I can share from owning ZVNBX, one of the two Zevenbergen funds -- the other N class being ZVGNX.
The fund managers are very focused and articulate about their reasons for owning a concentrated portfolio of two large cap growth funds, the outcome of running separate managed accounts for 30 and 26 years in these products.
In general, the main difference between ZVNBX and ZVGNX (Genea) is that the latter is focused on founder-led companies (Musk, Bezos), does not own any health care companies, and is invested in more companies that are, let's say, very early in the curve.
Some nuts and bolts:
From a revenue side, their initial hurdle rate is owning companies that have a minimum growth rate of 15% but a revenue growth rate of between 25-30%, and if they can't grow at that rate, they consider selling. They want to own companies whose business model can sustain that growth rate for 1-3-5-10 years, those companies they consider durable.
(An example of a company they own is NOW (Service NOW), a tech company. It recently said that they expect $7.4T in digital transformation in the next three years.)
These funds can be volatile, and so investor returns lag investment returns, which they often do in many funds, as most of us know. Overall, however, they have had positive inflows since inception.
The average portfolio turnover since inception has been 30%.
Platform availability continues to expand. Having two LCG funds has not been as easy to market, and the firm has a small marketing budget. In mid-April total AUM was about $65M despite being in existence for less than 5 years. It's $95M now.
Schwab offers both N classes NTF for a purchase of $100.
While M* classifies the funds as LCG, they consider the funds all-cap. They can drive attribution in the small and mid cap space as well.
These offerings are worth investor awareness, additional thoughts, and what the initial poster is asking.
Just when you think the market is overpriced One of the most infallible and rare momentum indicator is triggered and says stocks will be much higher six months down the road. Wish I had posted this yesterday as the indicator kicked in close of Wednesday. But I couldn’t believe my data and called a technical market guru yesterday to see if my data was correct. He said yep, the indicator sure did kick in. Anyway Marty Zweig’s ten day advance/decline ratio greater than 2 to 1 kicked in.
The way you compute this as shown in Marty’s book Winning On Wall Street is simply take the total 10 day NYSE advances and the total 10 day declines. Whenever that is greater than 2 to 1 you have a momentum buy thrust. You wouldn’t think this that rare but in his updated book you only had 11 instances of this occurring between 1953 and 1996. In all 11 instances the market was higher six months later and by an average of 15.2%.
Since the book and since the last signal listed in the book we have had two additional signals. March 2009 and as I discussed previously last year, January 2019. Those six months gains were higher than 15.2%. Unfortunately this indicator has been bastardized a bit by a computer formula and that formula shows another two signals. But when I went back and checked those signals did not qualify as described by Marty.
Marty’s double 9 to 1 up volume/ down volume indicator kicked in one day after the recent March low. I was surprised to see this other indicator kick in after an already 40% rise in the markets. Like everyone else I have never seen a market so detached from economic realty. So will be interesting if we keep marching higher for yet another 6 months or this time around the indicator fails. I have always been a disbeliever in traditional technical analysis and its associated mumbo jumbo. Yet always had the utmost respect and fully utilized Marty’s two momentum indicators most especially his up/down volume indicator.
SAGAX FUND THOUGHTS? You could purchase one of the Zevenbergen Funds (Growth or Genea) investor class for $2,500.00 which is the same for the "A" class of Virtus Zevenbergen Innovative Growth Fund minus the load (maybe different if using a brokerage). Both Growth and Genea are large cap growth funds.
While the funds, e.g. SAGAX and ZVNBX, appear to be clones, there are small differences. The Virtus version is an order of magnitude as large, though still small: $
504M vs. $46M. The holdings are slightly different, even in their top ten. The Virtus version has higher turnover (91% vs. 29%), while sporting a slightly lower ER (1.2
5% vs. 1.30%). I find that somewhat surprising, since submanaged funds typically add a layer of cost.
(Vanguard funds being an exception since Vanguard drives a hard bargain with money mangers, e.g. Vanguard Primecap Core (VPCCX) at 0.46% vs Primecap Odyssey (POSKX) at 0.6
5%)
Given the very growthy nature of the Zevenbergen funds and their highly concentrated portfolios (33-3
5 stocks), I agree that these are high octane funds. Looking at SAGAX's 2008-2010 performance (
see chart) it is clear that this is an aggressive fund that can suffer big (over
50%) losses that are greater than those of its peers.
Where I might part company with Skeet is in calling this a momentum fund. Momentum funds typically have high turnover. It's hard to see a 29% turnover fund following a momentum strategy.
(RE-DO), still crazy and playing again.....(NOT) Exited AAA gov't bonds What next to replace bonds?
Yes, please respond to
@Sven.
I find it encouraging that the 10-year Treasury is over .90% this morning after dipping below .
50% briefly in March-April. My understanding of the rate curve is quite limited, but I’d expect returns on very short term investment grade bonds will start improving if this trend continues. So, for those needing to “park” money short-term or wishing to pull risk off the table, it’s a healthy development.
Ed, in last month’s
Commentary, referenced using a “
barbell“ investment approach. Never been my cup of tea, but with cash yielding so little it also makes sense to me. With a barbell (my crude understanding) an investor loads up on both ends. On one end are riskier assets like equities and on the other end are investment grade securities with the duration to be set by the investor. Personally, I’ve favored the 3-10 year duration bond funds, but have some limited spec positions (thru RPSIX) on the conservative end of the barbell as well.
If using the barbell, one may exit low yielding cash positions and assume that should the risk assets fall, some increase in value at the conservative (bond end) will mitigate the damage.
