jhqax closing to new investors 5.25% front-load. Nope. This method sounds too complicated for ME. (I had to edit this down just a bit. Straight from the Morningstar report.)
...will close to new investors starting March 12, 2021. The fund will no longer be able to receive subscriptions from new investors from that date; however, existing investors will continue to have the ability to make additional investments or to reinvest distributions. Assets under management have swelled to $15.6 billion as of Jan. 31, 2021, following a rush of inflows in 2020. Soft-closing the fund is a prudent decision aimed at preserving the strategy’s ability to effectively execute options trading, and further reinforces its Morningstar Analyst Rating of Silver for the cheapest share classes.
Attractive fees, a transparent and consistent process, and an experienced manager elevate JPMorgan Hedged Equity ahead of its peers... Morningstar Analyst Rating of Silver.
...aims to provide smoother equity returns by a systematically implemented options strategy. (T)he team purchases puts 5% below the S&P 500’s value. To offset the cost of the puts, the team first sells puts 20% out-of-the-money ...to protect the fund from quarterly losses in the 5%-20% range; if markets fall less than 5%, the fund should fall in line with the market, and if the market falls more than 20%, the fund should incur the same incremental losses beyond negative 5%. The team also sells call options to generate enough option premium income to cover remaining cost of the hedges. The systematic options overlay structure has led to a dependable outcome even in the most volatile markets, such as in the first quarter of 2020, when it contained losses to less than 5%.
Hamilton Reiner is the lead manager and architect of the strategy. Reiner joined JPMorgan in 2009 and has over three decades of equity and options trading experience.
Assets have grown at a staggering rate, but the strategy should be able absorb the influx relatively easily as it uses liquid securities. In the past three years through August 2020, assets have grown from just over $1 billion to nearly $9.7 billion thanks to solid performance and low fees. Institutional and retirement share classes, in particular, are a lot cheaper than the options-based Morningstar Category average. These low fees coupled with JPMorgan’s transparent process make it an interesting option.
This fund uses a well-defined and thoughtful approach to options trading. Its transparent and repeatable process should deliver predictable results over the long term. The strategy earns an Above Average Process rating.
The strategy aims to provide a smoother ride to equity investing by purchasing 5% out-of-the-money put options and selling 20% out-of-the-money put options over a U.S. equity portfolio. This structure, called a put-spread, is designed to protect capital when markets sell off 5%-20% in a given quarter but also has a lower cost compared with outright put protection. However, since the short option position is so far out-of-the-money, management also sells a call option to cover the price of the long put position. The call options are usually sold 3.5%-5.5% out-of-the-money, depending on the amount of income needed to cover the cost of the long put, but periods of heightened volatility can move that target higher. The level at which the call strikes are written will determine the strategy’s upside cap for the quarter.
The team intends to generate a small level of alpha in the equity portfolio by slightly overweighting attractively priced stocks and slightly underweighting expensive stocks based on fundamental analysis. Since the constitution of the equity portfolio closely replicates the S&P 500, the use of the index options is not problematic from a hedging perspective.
The core long equity portfolio should track the S&P 500 closely as it constrains tracking error to 1.5% annually. It aims to outperform that index by tweaking the individual stock exposure within a 1-percentage-point range using a dividend discount model that ranks stocks from most attractive to least attractive based on forecast earnings and company-specific growth catalysts. The team creates a well-diversified portfolio that mitigates risk associated with individual holdings, with the resulting portfolio holding around 200 stocks. Sector weightings resemble the S&P 500 with modest underweightings in real estate and consumer staples and a small overweighting in consumer discretionary.
The team constructs a zero-cost option overlay at the beginning of each calendar quarter and resets it at the end of the quarter. Call premiums received should improve with persistently high market volatility and higher interest rates, thus improving the strategy’s upside in such a market environment. This was the case at the beginning of 2020’s second quarter when the call options had a strike price closer to 7% out-of-the-money following a period of extremely high volatility. However, in periods of serious market stress (such as Black Monday in 1987, where the S&P 500 dropped 23% in a single day), the short out-of-the-money put leg of the spread may expose the fund to additional losses.
An experienced and dedicated manager and access to JPMorgan’s ample resources earn this strategy an Above Average People rating.
The core team tasked with managing this strategy is small, but concerns about its size are assuaged by the options overlay’s systematic implementation and access to a strong support team. Lead portfolio manager and strategy architect Hamilton Reiner joined the firm in 2009 and has extensive experience trading derivatives, with a career dating back more than three decades. Prior to joining JPMorgan, Reiner held senior positions at Barclays Capital, Lehman Brothers, and Deutsche Bank, and he spent the first 10 years of his career at O’Connor and Associates, an options specialist firm. It was announced last year that Reiner would be responsible for leading JPMorgan’s U.S. structured equity team, although this new responsibility should not interfere with his portfolio management duties on the option-based strategies. Raffaele Zingone, the other named portfolio manager, joined the firm in 1991 and is responsible for the equity portfolio implementation. He directs JPMorgan's deep bench of 26 equity analysts, who average 20 years of industry experience.
Reiner has more than $1 million invested alongside investors, signaling a strong alignment of interest between management and shareholders. Zingone has between $500,000 and $1 million invested in the fund.
Parent |
Above Average Jun 2, 2020
J.P. Morgan Asset Management’s strong investment culture, which shows through its long-tenured, well-aligned portfolio managers and deep analytical resources, supports a renewed Above Average Parent rating.
Across asset classes and regions, the firm's diverse lineup features many Morningstar Medalists, such as its highly regarded U.S. equity income strategy that’s available globally. There's been some turnover in the multi-asset team recently, but it remains deeply resourced and experienced. Manager retention and tenure rates, and degree of alignment for U.S. mutual funds compare favorably among the competition. Managers' compensation emphasizes fund ownership over stock ownership, which is distinctive for a public company.
The firm continues to streamline its lineup and integrate its resources further. For instance, in late 2019, the multi-asset solutions division combined with the passive capabilities. The firm hasn’t launched trendy offerings as it’s mostly expanded its passive business lately, but acquisition-related redundancies and more hazardous launches in the past weigh on its success ratio, which measures the percentage of funds that have both survived and outperformed peers. Fees are regularly reviewed downward globally; they're relatively cheaper in the U.S. than abroad. Also, the firm is building its ESG capabilities and supports distinctive initiatives on diversity.
Performance
This strategy has consistently met performance expectations.
Since its December 2013 inception, the strategy has returned 7.8% annualized through August 2020, beating the options-based category average by nearly 4.7 percentage points annualized. It has also outperformed on a risk-adjusted basis. Its Sharpe ratio of 1.0 since January 2014 trounces the category average of 0.3.
The options overlay is designed to protect capital when the S&P 500 drops 5%-20% in a given quarter. This means investors will be exposed to losses if the S&P 500 loses less than 5% in a three-month period. However, this hasn’t stopped the strategy from achieving its goal of lower volatility relative to the S&P 500. Since December 2013, it has had a 6.7% monthly standard deviation compared with the S&P 500's 13.8%. Moreover, the maximum drawdown (based on monthly data) has been limited to negative 7.9% relative to the S&P 500’s negative 19.6%.
Investors should note that the intraquarter experience will vary given that option pricing is dynamic until expiration. Options’ values are marked to market daily, which often results in intraquarter deviations from the quarter-end return. For example, the strategy was down nearly 19% at one point in the first quarter of 2020 but ended the period down 4.9%.
Price
It’s critical to evaluate expenses, as they come directly out of returns. The share class on this report levies a fee that ranks in its Morningstar category’s second-cheapest quintile. Based on our assessment of the fund’s People, Process and Parent pillars in the context of these fees, we think this share class will be able to deliver positive alpha relative to the category benchmark index, explaining its Morningstar Analyst Rating of Bronze.
Grandeur Peak Advisors is closing several of their funds "[1]"Hard Closure": means that these Funds will no longer accept purchases, from new or existing investors, through financial intermediaries unless the purchase is part of: (1) a retirement plan which held the Fund prior to this closure, (2) an automatic reinvestment of a distribution made by the Fund, or (3) a de minimis annual rebalancing approved by a member of the Grandeur Peak client team. The Funds will remain open to purchases from existing investors, and to new investors who purchase directly from Grandeur Peak Funds. The Funds retain the right to make exceptions to any Fund closure or limitation on purchases.
So it appears one can still buy directly through the fund , YES or NO ?
Derf
Waiting for the Last Dance -- Jeremy Grantham I listened to that Grantham interview on Bloomberg 2-3 times one day recently. He lays out a convincing case. But there are equally good arguments on both sides.
As far as Grantham’s argument goes he’s focused on three areas: (1) He thinks artificial risk asset impetus has been supplied from over a decade of easing by the Fed and other central banks. Since he doesn’t think this can continue much longer (deficits / unrealistically low rates) he sees an eventual popping of the “bubble”. (2) He sees a near hysterical chasing of return today irregardless of risk - a euphoria he equates with the final stages of bull markets. (3) He takes issue with high valuations in some sectors - technology particularity.
It should be noted that Grantham is more sanguine re value stocks, thinking there are pockets of opportunity in that depressed sector. He sounds downright bullish on emerging markets - if one has a long enough time horizon.
Each investor needs to consider his own time frame, risk tolerance, overall financial situation before undertaking any changes. I’ve grown a bit more cautious over the past couple months. The last two years were good to most investors. So, irrespective of Grantham, I see no compelling reason for a retiree to be overly aggressive at this point. I’m sharing how my allocation has changed in recent months as I try to protect 50+ years of accumulated retirement savings. Your situation is doubtless different and so should be your approach.
* End of 2020: Alternatives 25%, Equity/Balanced Funds 25%, Diversified Bond 25%, Cash & cash alternatives 15%, Real Assets & Commodity 10%.
* Today: Alternatives 33%, Equity/Balanced 20%, Diversified Bond 20%, Cash & cash alternatives 15%, Real Assets & Commodity 7%, Benchmark Fund (PRSIX) 5%.
Explanatory Notes:
- TMSRX accounts for about 50% of the alternative portion. PRPFX comprises most of the rest.
- I’ve gone much shorter on the diversified bond holdings. DODLX is the riskiest one at 50%. The rest consists of short term bond funds like newly opened TSDLX.
- I’ve moved most of the cash into a medium duration TIPS index fund,
- I’ve switched from TRRIX to PRSIX as my benchmark and have added a small allocation to that fund. One difference between the two above funds ... PRSIX commits 0-10% to a Blackstone hedge fund. TRRIX does not.
- There remains a small spec position in a mining fund.
Grandeur Peak Advisors is closing several of their funds Just received an email from GP. Here is the email:
February 12, 2021
Dear Fellow Shareholders,
With the continued strength of global markets and the performance of the Grandeur Peak Funds, we find it necessary to announce the following fund closures effective as of market close on Friday, February 26, 2021.
Moving to Hard Closure[1]:
Grandeur Peak Global Opportunities Fund (GPGOX/GPGIX)
Grandeur Peak International Opportunities Fund (GPIOX/GPIIX)
Grandeur Peak International Stalwarts Fund (GISOX/GISYX)
Grandeur Peak Global Micro Cap Fund (GPMCX)
Moving to Soft Closure[2]:
Grandeur Peak Emerging Markets Opportunities Fund (GPEOX/GPEIX)
As you know, we carefully review capacity at both the strategy and firm level. We are committed to keeping our investment strategies nimble to fully pursue their investment objectives without being encumbered by their individual asset base or the firm’s collective assets. Achieving performance for our clients remains our paramount objective as always.
Funds Remaining Open:
Grandeur Peak Global Reach Fund (GPROX/GPRIX)
Grandeur Peak Global Stalwarts Fund (GGSOX/GGSYX)
Grandeur Peak Global Contrarian Fund (GPGCX)
Grandeur Peak US Stalwarts Fund (GUSYX)
Thank you for your continued trust. If you have any questions, don’t hesitate to reach out to me or a member of our Client Relations Team.
[1]"Hard Closure": means that these Funds will no longer accept purchases, from new or existing investors, through financial intermediaries unless the purchase is part of: (1) a retirement plan which held the Fund prior to this closure, (2) an automatic reinvestment of a distribution made by the Fund, or (3) a de minimis annual rebalancing approved by a member of the Grandeur Peak client team. The Funds will remain open to purchases from existing investors, and to new investors who purchase directly from Grandeur Peak Funds. The Funds retain the right to make exceptions to any Fund closure or limitation on purchases.
[2] "Soft Closure" means that the Fund will close to new investors seeking to purchase shares of the Fund through third-party intermediaries subject to certain exceptions for financial advisors with an established position in the Fund and participants in certain qualified retirement plans with an existing position in the Fund. The Fund will remain open to purchases from existing investors, and to new investors who purchase directly from Grandeur Peak Funds. The Funds retain the right to make exceptions to any Fund closure or limitation on purchases.
Emerald Small Cap Value Fund change in liquidation date updated:
https://www.sec.gov/Archives/edgar/data/915802/000139834421003133/fp0062314_497.htm497 1 fp0062314_497.htm
FINANCIAL INVESTORS TRUST
Emerald Small Cap Value Fund
(the “Fund”)
Supplement dated February 12, 2021
to the Fund’s Prospectus and Statement of Additional Information
dated August 31, 2020, as supplemented
As previously disclosed, on December 8, 2020, the Board of Trustees (the “Board”) of Financial Investors Trust (the “Trust”), based upon the recommendation of Emerald Mutual Fund Advisers Trust (the “Adviser”), the investment adviser to the Fund, a series of the Trust, determined to close and liquidate the Fund on or about January 11, 2021. The date for such liquidation is now expected to be on or about February 26, 2021 (the “Liquidation Date”).
If the Fund has not received your redemption request or other instruction prior to the close of business on the Liquidation Date, your shares will be redeemed, and you will receive proceeds representing your proportionate interest in the net assets of the Fund as of the Liquidation Date, subject to any required withholdings. As is the case with any redemption of fund shares, these liquidation proceeds will generally be subject to federal and, as applicable, state and local income taxes if the redeemed shares are held in a taxable account and the liquidation proceeds exceed your adjusted basis in the shares redeemed. If the redeemed shares are held in a qualified
retirement account such as an IRA, the liquidation proceeds may not be subject to current income taxation under certain conditions. You should consult with your tax adviser for further information regarding the federal, state and/or local income tax consequences of this liquidation that are relevant to your specific situation.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
Grandeur Peak Advisors is closing several of their funds https://www.sec.gov/Archives/edgar/data/915802/000139834421003172/fp0062329_497.htm497 1 fp0062329_497.htm
FINANCIAL INVESTORS TRUST: GRANDEUR PEAK FUNDS
GRANDEUR PEAK EMERGING MARKETS OPPORTUNITIES FUND
GRANDEUR PEAK GLOBAL MICRO CAP FUND
GRANDEUR PEAK GLOBAL OPPORTUNITIES FUND
GRANDEUR PEAK INTERNATIONAL OPPORTUNITIES FUND
GRANDEUR PEAK INTERNATIONAL STALWARTS FUND
(Each, a “Fund,” and together, the “Funds”)
SUPPLEMENT DATED FEBRUARY 12, 2021 TO THE SUMMARY PROSPECTUS AND PROSPECTUS OF THE FUNDS DATED AUGUST 31, 2020, AS SUPPLEMENTED FROM TIME TO TIME
Effective as of the close of business on February 26, 2021, the Grandeur Peak Global Opportunities Fund, Grandeur Peak International Opportunities Fund, Grandeur Peak International Stalwarts Fund and Grandeur Peak Global Micro Cap will no longer accept purchases, from new or existing investors,
through financial intermediaries unless the purchase is part of:
●a
retirement plan which held the Fund prior to this closure,
●an automatic reinvestment of a distribution made by the Fund, or
●a de minimis annual rebalancing approved by a member of the Grandeur Peak client team.
Also, effective as of the close of business on February 26, 2021, the Grandeur Peak Emerging Markets Opportunities Fund will close to new investors seeking to purchase shares of the Fund through third party intermediaries subject to certain exceptions for financial advisors with an established position in the Fund and participants in certain qualified
retirement plans with an existing position in the Fund.
The Funds remain open to purchases from existing investors, and to new investors who purchase directly from Grandeur Peak Funds.
The Funds retain the right to make exceptions to any Fund closure or limitation on purchases.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
Forecasting Never. Works If forecasting never works, why should one invest in the stock market at all and why does our society allow everyone's retirement to be dependent upon something that is completely unpredictable? Isn't "in the long-run stocks go up" a forecast?
MRLOX / MALOX all retirement in 1 fund - question for passive investor. Need advice. R shares are closer to C shares (level load, never converting) than to B shares (back end declining load, converting).
Here's what
the prospectus for MRLOX says about C and R shares:
If you select Investor C or Class R Shares, you will invest the full amount of your purchase price, but you will be subject to a distribution fee of 0.75% per year for Investor C Shares and 0.25% per year for Class R Shares and a service fee of 0.25% per year for both classes of shares under plans adopted pursuant to Rule 12b-1 under the Investment Company Act. Because these fees are paid out of the Fund’s assets on an ongoing basis, over time these fees increase the cost of your investment and may cost you more than paying other types of sales charges. In addition, you may be subject to a deferred sales charge when you sell Investor C Shares within one year.
B shares got a bad rap, only partly deserved. The extra 0.75%/year in fees before converting had a net effect roughly the same as paying 5.25% up front (A shares). So they didn't hurt investors much more (or less) than "normal" loaded funds. But because they were sold as "putting 100% of your money to work", the pitch was deceptive.
Similarly, C shares let people think they weren't paying loads. A difference is that unlike B shares, these shares (until some fund families
recently relented) never converted.
MRLOX / MALOX all retirement in 1 fund - question for passive investor. Need advice. Jon, MRLOX compares decently with the Vanguard Balanced Index on several risk and performance measures. It is not a pure equity fund so comparing it to the SP500 performance will lag due the bonds AND the foreign sleeve. The MFO Premium site's quick search shows details some of which you have likely seen. It's free for individual funds in the QuickSearch Function at the top. One thing I though of ....my wife's 403b(teacher) started out in a higher share category and then over time converted to the A shares with the lowest annual expense ratio. Your friend's shares are in a R-retirement share so I don't know if that is fixed for life or decreases over time to become A shares(over 5-7yrs this what happened to the B shares she had). HR folk have no idea about many of the expenses etc and with a little pushing folks have gotten better deals from 401k/403b plans. I wasn't able to screen shot a little data but give it try.
MRLOX / MALOX all retirement in 1 fund - question for passive investor. Need advice. MALOX is a solid world allocation fund. For over two decades (until about a decade ago), it paced PRWCX (a domestic allocation fund) nicely. It returned less over the past decade, likely because international investments generally returned less. For example, VGTSX returned 5.10% over the past decade (ending Feb 3) vs. VTSMX's 13.55%.
Depending on how long he intends to continue working, its roughly 65/35 allocation could be quite reasonable. So a first question is why consider a 100/0 allocation going forward as he edges toward retirement? (Your aversion to target date funds reinforces the impression that you prefer equity funds.) After that one could get into global vs. domestic.
There's also a question of mechanics. Generally in-service withdrawals of 401(k)s are not allowed until one is 59½; even then only if the plan allows it. So that part of his retirement assets would seem to have limited options until he's nearly 60. It likely could not be turned over to a brokerage to manage. This also means that we can only talk in generalities (types of funds).
I also notice that he's invested in a a fund with a 0.50% 12b-1 fee. That is considered a load and adds up to way more than 5% or so that one might have paid instead with a front end load. (It charges 0.34%/year more than the A shares that are generally available NTF.) This suggests that most or all of his 401(k) investment options come with high fees. Outside of suggesting doing a rollover into cheaper funds as soon as he is able, I don't know what else could be done about this.
MRLOX / MALOX all retirement in 1 fund - question for passive investor. Need advice. Ok, so I have a close friend and he’s in his 50’s. We were discussing investing in general for the first time today. He doesn’t know much about investing. It turns out his entire 401k or retirement is invested in one fund - MRLOX. He’s not even sure how he ended up in the fund but he’s there.
So I looked it up and researched it a bit out of genuine concern but knowing I will never give advice without also asking him to run it by a fiduciary ... so in my quick analysis it seems like he’s better off in a S&P 500 Index or Total Market Index. It’s not that MRLOX is a terrible fund but it hasn’t beaten the 500 Index consistently. It’s been fine recently.
What would you recommend? A 500 Index or total market index, a target fund (uggh), stay with MRLOX or pay a brokerage a 1% fee to invest for him (not that he would go for that)... Again, any recommendation will be followed with -run it by an investing professional or fiduciary. Just wanted the community’s opinion. Is there a better option for him? Oh and he’s asking for my advice. It’s not unsolicited.
More talk & thoughts on using Monte- Carlo The good & bad Hi Old Joe,
It's good to hear from you. As you likely know I retired almost 25 years ago. At that time no Monte Carlo-like codes were available to me so I wrote my own simple version of that tool. It served me well but was not all inclusive.
Today's versions of that tool are much more complete and powerful. They will aid potential retirees in making good decisions. I will always take the opportunity to encourage their application for that purpose.
That 's surely a far distant application from their original use which was to help design the atomic bomb. The current applications are a tiny bit more sedate but more widely applied. The investment industry is a most frequent user to help in the retirement decision making process. But you knew that already.
Added comment: If a professional advisor does not make use of a sophisticated Monte Carlo tool, he or she is short changing his client. Monte Carlo is certainly not the total picture but can be a significant input. It is available so it should be exercised.
Best Wishes
Emerald Small Cap Value Fund change in liquidation date update:
https://www.sec.gov/Archives/edgar/data/915802/000139834421001868/fp0061770_497.htm497 1 fp0061770_497.htm
FINANCIAL INVESTORS TRUST
Emerald Small Cap Value Fund
(the “Fund”)
Supplement dated January 29, 2021
to the Fund’s
Prospectus and Statement of Additional Information
dated August 31, 2020, as supplemented
As previously disclosed, on December 8, 2020, the Board of Trustees (the “Board”) of Financial Investors Trust (the “Trust”), based upon the recommendation of Emerald Mutual Fund Advisers Trust (the “Adviser”), the investment adviser to the Fund, a series of the Trust, determined to close and liquidate the Fund on or about January 11, 2021. The date for such liquidation is now expected to be on or about February 12, 2021 (the “Liquidation Date”).
If the Fund has not received your redemption request or other instruction prior to the close of business on the Liquidation Date, your shares will be redeemed, and you will receive proceeds representing your proportionate interest in the net assets of the Fund as of the Liquidation Date, subject to any required withholdings. As is the case with any redemption of fund shares, these liquidation proceeds will generally be subject to federal and, as applicable, state and local income taxes if the redeemed shares are held in a taxable account and the liquidation proceeds exceed your adjusted basis in the shares redeemed. If the redeemed shares are held in a qualified
retirement account such as an IRA, the liquidation proceeds may not be subject to current income taxation under certain conditions. You should consult with your tax adviser for further information regarding the federal, state and/or local income tax consequences of this liquidation that are relevant to your specific situation.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
Building Downside Protection For Retirees The VIX shot up to over 37 yesterday but today it was back to under 30. That's why I'm not a robot and did nothing. VIX is only one main thing I'm looking at, I also look at the big picture and try to understand why/what.
The people who buy when VIX is high are similar to the ones who buy when things go down. I don't buy falling knives, I wait for the rebound, and then I buy. How, when and the rest are part of the whole system. It's not a science, it's based on my decisions at that moment and the ability to reverse back quickly too if I made a "mistake". I also sold at the end of October last year but when risk was down I was fully invested within 3 days. That was a "mistake" but it's part of the system. I rather not lose too much at retirement.
