July 1, 2017

By David Snowball

Dear friends,

It’s summer time, an especially blessed and cursed interval for those of us who teach. On the one hand, we’re mostly freed from the day-to-day obligation to be in the classroom. Some of us write, some travel, some undertake “such other duties as may from time to time be assigned” by our colleges. On the other hand, we hear the clock ticking. All year long, as we try to face down a stack of 32 variably-literate essays at 11 p.m. Sunday night, we think “if I can just make it to summer, I’ll recharge and it’ll be great!” About the first thing we notice when summer does arrive, is that Continue reading →

Autonomous vehicles, huge gaping sinkholes and your portfolio

By David Snowball

I wonder, occasionally, about a world dominated by self-driving cars, sometimes called “autonomous vehicles.” GM announced in June that they’ve piloted 180 autonomous vehicles and that they’ve got the capability to begin mass production of them. For now, they’re committing $600,000,000 a year to the development.

Last year, Goldman Sachs projected that, between driver-assistance technology and autonomous vehicles, the market will grow from about $3 billion in 2015 to $96 billion in 2025 and $290 billion in 2035. One key is Continue reading →

Summer Musings

By Edward A. Studzinski

“Change is the law of life. And those who look only to the past or the present, are certain to miss the future.”

      John Fitzgerald Kennedy. Speech, Frankfurt, 25 June 1963.

The first six months of 2017 are gone, and most global markets have surged during that period. So those like me who thought valuations were starting to look extreme at the beginning of the year, once again cried “wolf” too soon. For those six months, Vanguard’s S&P 500 Admiral Fund achieved a total return of 9.3%, with an expense ratio of four basis points. Many actively managed funds, alas, did not perform quite as well for their investors, although their managers continued to do quite well, purchasing Continue reading →

Inside Smart Beta Conference – New York 2017

By Charles Boccadoro

Matt Hougan of Inside ETFs and Dave Nadig of ETF.com hosted an Inside Smart Beta Conference this past month in New York City. Their career paths overlapped at ETF.com, which promotes itself, arguably so, as the “world’s leading authority on exchange-traded funds.” I find both Matt and Dave articulate thought leaders on ETFs and investing generally. They co-authored CFA’s A Comprehensive Guide to ETFs. Continue reading →

great horned owl

Matthews Asia Credit Opportunities (MCRDX/MICPX), July 2017

By David Snowball

*Matthews Asia liquidated their two fixed-income funds in March, 2023. Manager Teresa Kong subsequently left the firm. In consequence, the information for Marathon Value should be read for archival purposes only.*

Objective and strategy

The managers seek total return over the long term. They invest in debt issued by Asian corporations, governments and supranatural institutions. The managers invest, primarily, in high-yield, dollar-denominated debt though they define that term broadly enough to incorporate both high-yield bonds and debt-related instruments such as convertible bonds, hybrids and derivatives with fixed income characteristics.  Around 20-25% of the portfolio has been in convertible bonds since inception, and that percentage is been pretty stable from year to year. 


Matthews International Capital Management, LLC, the Investment Advisor to the Matthews Asia Funds, was founded Continue reading →

Launch Alert: Artisan Thematic Fund (ARTTX)

By David Snowball

On April 24, 2017, Artisan Partners launched Artisan Thematic Fund (ARTTX). The managers seek to identify secular themes that will have an enduring impact on business, ideally identifying those themes sooner and more clearly than their competitors. There’s a point at which a development transitions from being geeky-cool to being a driver of corporate profits; Artisan refers to that as Continue reading →

old license plates on a wall

Funds in Registration

By David Snowball

Before fund companies are allowed to offer mutual funds to the public, they need to submit them to SEC review. The SEC has 75 days to ponder the fate of the newly-registered funds before allowing them to proceed. The registration period is also called “the quiet period” because fund companies are not allowed to talk about their funds in registration. This month’s good news is that most of the mutual funds in registration are sensible strategies from respected shops: Artisan, AQR, Brown Advisory, T. Rowe Price and others. The other part of the news is that the ETF industry continues to crank out a freakish mishmash. That includes the Quincy Jones Streaming Music, Media & Entertainment ETF, the Republican Policies Fund (GOP), the Democratic Policies Fund (DEMS) and the European Union Breakup Fund (EUXT). Continue reading →

old alarm clock

Manager changes, June 2017

By Chip

It’s been a relatively unexciting month on the manager change front, perhaps with folks regrouping over the quiet summer months. Five of the departures were triggered by announced retirements, which is a bit higher than usual. FPA got bounced off the team at Litman Gregory Masters Smaller Companies (MSSFX). On the one hand, that’s not terribly surprising: the managers’ main charge, FPA Capital (FPPTX), has trailed 94% of its Morningstar peers over the decade that lead manager Dennis Bryan has been in place. On the other hand, it is surprising that they lasted so long: FPA has been managing a portion of the portfolio for a decade, while the average tenure of managers at MSSFX is two to three years. It’s worth pondering the implications of that turnover: Litman Gregory’s specialty is manager selection and they have a lot of resources to deploy in finding the best managers and still, within a very few years, the majority of them are no longer contributing enough to remain. It does highlight the Continue reading →