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our October issue is live, and other stuff

Dear friends,

We posted our early autumn issue of the MFO monthly this morning. I tried to focus a bit more on individual funds that might be worthy of attention.

Seven Canyons World Innovators (WAGTX) started life as Wasatch Global Tech, morphed into Wasatch World Innovators, and following founder Sam Stewart to his new firm and became Seven Canyons World Innovators. The manager commentaries are unusually lucid and thoughtful. I'm struck, in particular, by their discussion of whether the entire (developed) world has become Japan: slow growth, aging population, vast debt, no room for more monetary stimulus and at risk of stagnation. Their argument is "true enough, but some Japanese firms did fabulously well. Let's learn from them." Both raw and risk-adjusted performance is consistently top tier.

Harbor Global Leaders (HGGIX) sort of caught Ed's eye about a month ago, and I promised to write a bit about them. The short story is that this used to be a Marsico-led fund and, three years ago, became of somewhat different Sands-led one. The Sands team has had top tier returns but ... their Lipper peer group is a bit squishy since it's a "global" group that includes domestic funds and their shareholder communications are pretty bad. Like Fidelity, Harbor uses a template for their reports which limits the manager to about 100 words of useful content and they don't push any material that's not required. As a result, my read on them is a bit thin.

Evolutionary Tree Innovators just launched with the leadership of a guy who used to be a bigwig at Sands Capital. The strategy seems to be an ... uh, evolution of the domestic large-growth strategy he helped pursue at Sands. Two problems. (1) A near-institutional minimum and (2) limited access to role in the non-public version of the investment vehicles.

The Matthews folks have moved to Artisan, but it looks like they'll be working with private rather than public vehicles.

Lynn Bolin does another rich job of reasoning through his shopping list. Lynn is skeptical of the state of markets and the economy over the next five years and was looking for funds that (a) have flexibility in their mandate and (b) use it well. There's ground for lively discussion there.

Speaking of "lively discussion," the off-topic board is less closed than it was. With any luck at all, I've succeeded in modifying the settings so that folks can post there but O-T posts don't appear on the "recent discussions" view that is the default landing page for the discussion board. That way, if folks want to participate in off-topic discussions they can but the landing page highlights on-topic discussions instead. Thanks, especially, to O.J. for helping me think about this.

And thanks, especially, to The Shadow. Usually Briefly Noted is the product of parallel investigations: Shadow tracks filings and I track filings, with his work helping me be sure that I haven't screwed up and missed important stuff. This month was vaguely a disaster for me and I was about 95% dependent on his finds. Fortunately, Shadow does amazing work, which saved me. So, thanks!

David

Comments

  • Seven Canyons is an interesting fund. My one concern with it is its level of concentration, which is by design, versus its competitors at Wasatch and Grandeur Peak. It has 40% of its assets in its top ten stocks. Of course, producing blowout numbers often requires concentration, but the individual stock risk from that concentration is worth noting, especially when the stocks are of small-cap and foreign companies that can be considerably more volatile than large U.S. companies.
  • edited October 2
    David are you sure that your up coming trip to southern WI. to procure apples is just a 2/nd thought . I hear the beer from brewery near New Glarus is very tasty !! Also the Spotted Cow is sold only in WI. so a trunk full would be a great investment ! And while in the area a stop for cheese , to please the palate .

    Enjoy your trip, Derf
    P.S. Take two days & relax !
  • Well, thanks very much for the comment above. I've celebrated the Off-Topic reopening with a heartfelt commentary on the present situation.

    Thanks much, David!
  • Thanks David! Will Ed be back next month?
  • edited October 2
    @David_Snowball,

    You're welcome!
  • Thank you very much.

    I have invested with Harbor funds for long time. I agree that the commentary from the subadvisor/manager is "light" even in annual reports. Andrew Foster of Seafarer funds and David Giroux of T. Rowe Price are exemplary on this aspect. Harbor hires managers with good track record and change them when their performance trail their benchmark for several years. Expense ratio of investor shares are reasonable and the lower fee institutional shares requires $50K.

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