July 1, 2019

By David Snowball

Dear friends,

It’s not yet the height of summer, but it’s starting to feel like it at Augustana. Our summer classes, held only in June, have ended and the hubbub of the new year is still a distant cloud on the horizon. I visit campus to catch up on my reading – it’s what scholars do – and to pursue bits and pieces of administrative work for my dean. Rather than camp in my office all day, I wander around at lunchtime and recently discovered our always-bustling patio and picnic lawn look Continue reading →

One Hand Clapping

By Edward A. Studzinski

“In wartime, truth is so precious that she should always be attended by a bodyguard of lies.” Winston S. Churchill to Josef Stalin, concerning plans for coordinated deception, at a party celebrating Churchill’s 69th birthday, 30 November 1943

The second quarter of the year has provided investors with a variety of results, as well as a variety of Continue reading →

The Rise of the Active ETFs

By David Snowball

Active ETFs are a sort of hybrid between more-traditional ETFs and actively-managed mutual funds. Like traditional ETFs, they trade on the secondary market which means that the advisor doesn’t need to keep cash on hand in order to meet day-to-day withdrawal needs. Some of the expenses traditionally borne by the advisor either don’t exist (ETFs have fewer shareholder reports than, by law, mutual funds do) or are shifted to the brokerage firm. They also offer a structural tax advantage: shareholders aren’t responsible for the yearly tax consequences (and record-keeping) of the manager’s moves; shareholders are taxed only when they Continue reading →

Launch Alert: Harbor International Small Cap (HIISX)

By David Snowball

On May 23, 2019, Harbor Capital Advisors did a hard reset on Harbor International Small Cap (HIISX). Over its first three years, the fund’s returns trailed nearly three-quarters of its peers with only a tiny bit less volatility. Harbor chose to empanel a new subadvisor, Cedar Street Asset Management which was founded in April of 2016, is an employee-owned investment management firm and has $220 million in assets under management as of May 31, 2019. Since Cedar Street brings a distinct strategy that has little in common with their predecessors, MFO classifies this as Continue reading →

Launch Alert: Palm Valley Capital Fund (PVCMX)

By David Snowball

On April 30, 2019, Palm Valley Capital Management launched their first, and likely only, fund: Palm Valley Capital Fund (PVCMX). The managers are seeking long-term total return. The plan is to invest in a compact portfolio of high-quality, substantially undervalued small cap stocks.

What are they planning to do?

Their goal is to provide “an attractive Continue reading →

great horned owl

Matthews Asia Value (MAVRX / MAVAX) (Liquidated), July 2019

By David Snowball

This fund has been liquidated.

Objective and strategy

Matthews Asia Value pursues long-term capital growth by investing in a diversified portfolio of securities of undervalued companies from the Asian region. The target is firms that are high quality, undervalued with strong balance sheets, focused on their shareholders, and well-positioned to take advantage of Asia’s economic and financial evolution. The goal is to buy shares at a discount of 30% or more to their calculation of intrinsic value.

It is an all-cap portfolio, which translates to Continue reading →

Around the Isle in Eleven Days

By David Snowball

Chip and I aspire to travel internationally once every two years. Our hope, in part, is to get far away from the noise long enough that we actually manage to unwind. Our ideal trips feature cool sites, the opportunity to sit and talk with people, and one outstanding meal a day. Two years ago that took place in Scotland, this year Ireland, and two years hence, Italy. Continue reading →

Thirty days in The Shadows

By David Snowball

I write, frequently, with admiration and gratitude, about the contributions TheShadow makes both to our discussion board and to our final double-check of coverage in each month’s Briefly Noted column. For those wondering exactly how much cool stuff one person might extract from the swamp of SEC filings each month, here are The Shadow’s contributions for the month of June 2019.

The live, clickable version Continue reading →

old license plates on a wall

Funds in Registration

By David Snowball

Before funds and ETFs can be offered to the public, they’ve got to be submitted to the SEC which has 70 days to review the application. In general, advisers try to launch just before year’s end because that allows them to have clean “year to date” and calendar year results to share. The funds on-file this month will be eligible to launch in September, though not required to do so. A surprising number of advisors filed virtual “red herring” prospectuses: substantially incomplete documents that were pushed through to meet some self-imposed deadline but that fail to stipulate strategy, manager and costs.

There are a series of intriguing Continue reading →

old alarm clock

Manager changes, May and June 2019

By Chip

Each month, dozens of funds report manager changes to the SEC. The vast majority of those are inconsequential: one MBA-yielding member of a 12-person management team is popped out and another is popped in. This month’s compendium covers manager changes at 122 funds. That’s a larger-than-normal report mostly because we shared only a compressed list in our June issue, which reflected the competing time demands that Chip faced as she prepared for Ireland.

This month sees few blockbuster moves, though several “A” tier managers are Continue reading →

fountain pen writing a note

Briefly Noted

By David Snowball


“At a special meeting held on June 7, 2019, shareholders of Nuveen High Income Bond Fund did not approve the proposed reorganization of the Fund into TIAA-CREF High-Yield Fund that was previously approved by the Board of Directors of the Fund in December 2018 … the Board will review and take such action as it deems to be in the best interests of the Fund, including continuing to operate the Fund as described in the prospectus, liquidating the Fund, or such other options the Board may consider. Fund shareholders will be notified when the Board approves a course of action for the Fund.”

Shareholder democracy in action! The shareholders say “no” and Continue reading →