I hold a larger position in this fund and established it almost at its inception. I understand the reason holding large cash position, and also understand that we should consider this fund as a conservative allocation fund with cash as the other alternative asset. But with 75% in cash, this fund still lost .53% today in a slightly down market. Did I miss anything here with this fund, or should I move on to other real SCV funds?
Comments
BTW, I'm not familiar with this fund. Just took a look after you posted the question:
All of the fund's top 10 holdings were down today as can be expected in a down market, but several of them were down a LOT for a one day decline.
The Gold mining stocks had a horrific day, and that has affected your fund a lot. Take a look at the top 10 holdings of your fund.
Your opinions?
Take a look at the sector weightings. This fund goes its own way and does not look at what others are doing.
I would study the manager. I Googled him, and there is plenty to read about him, including several interviews, to understand his current and past thinking and investment strategy.
You could read his fund reports. There is a semi-annual report that came out in July of this year. And whatever shareholder communications he has.
Below are the calendar year returns. His first full year of operations, he was at the top of the heap. The next two years, the bottom......
Where he will be over the next few years is totally unpredictable
This fund is not going to perform like the category of SCV funds, as I don't think it has much in common with them. This fund is definitely a 'one man show'....the manager has definite opinions which are the reason for the current allocation.
So if you are looking for "small cap value" as an asset class, you are not really getting it here. Here you are getting a specific opinion about the markets and how to sidestep risk.
If you want the small cap value asset class, one way you can get that with a small cap value index fund. With this fund you get the manager and his specific opinions, not an asset class.
I bought into ARIVX and Cinnamond when it first came out because of his conservative style and the good press it got from David here at MFO. I dumped it when I saw his affinity to precious metal miner stocks. He has been caught in a value trap for years now and won't adjust. Ala Hussman? Maybe that's to harsh.
I see it as a unique conservative allocation fund.
It is better than its M* 1 star quantitative rating for investors more concerned with risk.
Experienced, true value manager. Watches downside. Great communication.
My biggest issue with the fund is same issue I have with most funds.
It charges too much.
Part of the reason is organizational overhead. But 1.41% on several hundred million AUM is indefensible.
ASTON continues to impose 12b-1 fees.
ASTON continues to impose high minimums ($1M) for institutional shares.
Regards,
Ted
Total PercentileRanking (09/08/2014)
1-Day 98%
1-Week 99%
1-Month 99%
3-Month 15%
YTD 72%
1-Year 99%
3-Year 99%
I own ICMAX
I own FPIVX
All high cash stakes.
I want to own future outperformers, not current outperformers. This is not about "conservative allocation fund". Buy the manager, not the fund. Will I time the market? Or will I let my manager time the market? Does Warren Buffet time the market? I consider these fully allocated positions. If I didn't I would buy index funds. Buying active management and then questioning that active management is ludicrous. If you want to be fully invested by index fund.
PS FPA Crescent has high cash stake too. M* is all messed up saying it has 46% bonds when a lot of that is short term treasuries.
thanks
SHORT-TERM INVESTMENTS — 37.6% (Cost $39,856,033)
State Street Bank Repurchase Agreement — 0.01% 07/01/13
(Dated 6/28/13, repurchase price of $39,856,033, collateralized by
$46,935,000 principal amount U.S. Treasury Bond —
2.75% 2042, fair value $40,657,444) . . . . . . . . . . . . . . . . . . .
But M* does not say "Bond" for FPIVX, it says Cash. FPACX owns several different treasury bonds with lower yields, i.e. more conservative, and M* says Bond.
Take a look at the asset allocation on the website
http://www.fpafunds.com/crescent
The FPA funds say on their website that FPACX has 6.3% cash, as of 6/30/2014
They give a different mix than M* is showing, but very little cash.
I'm not very enamored with the colors and circle chart they put together......perhaps a table clearly stating the asset classes with percentages would have done a better job, but here it is:
Anyways, I hope nothing changes for ARIVX. I have been okay holding it for the long term with certain expectations. If Cinnamond leaves after acquisition I'm going to be really pissed.
Regarding PVFIX (Pinnacle Value) I think that part of its performance has been helped by being so micro-cap oriented. The geometric av. market cap for Pinnacle is only $250m. (ARTVX is $1174 and ARIVX is $1181).
For reference, the micro cap ETF IWC has a market cap of $403 and , one of my favorites, WEMMX (Teton Westwood Mighty Mites AAA) is $483.
Regards,
Ted
Basically, it had a strong first year in 2011. But it's spent time in the barrel ever since.
The hefty 1.47%, which goes to pay RiverRoad, Aston, and now AMG among others, while holding nearly 80% in zero interest cash remains a drag.
The on-going bull market is casting a lot of defensive money manager in tough light. Mr. Cinnamond is in good company, if that helps any.
Numbers through November...
Gets 32 percent of the upside and 29 percent of the downside. It is conservative.