October 1, 2019

By David Snowball

Dear friends,

We live, indeed, in interesting times.

You might think you hear in that statement an echo of “an ancient Chinese curse, ‘may you live in interesting time.’” Yes and no. I was thinking of the phrase but it’s not ancient. Also not Chinese. It appears to have been invented in 1936 by a member of the British foreign service who was trying to sound … uh, profound.

The sentiment remains, though the source is not Continue reading →

Getting What You Paid For: High capture ratio funds

By David Snowball

Investors are interested in returns: the answer to the question, “how much are you going to make me?” Sophisticated investors are interested in how those returns are delivered.

Over the current market cycle, Fidelity Blue Chip Growth (FBGRX) has returned 10.7%, among the best of all funds. AMG Yacktman Focus (YAFFX) trails it at 10.5% and costs a lot more to boot (1.27% versus 0.72%). On surface, that’s pretty clear: Fido offers Continue reading →

A More Robust Down-side Market Metric

By Charles Boccadoro

“A ‘receding sea’ is not a lucky offer of an extra piece of free beach, but the warning sign of an upcoming tsunami.” ― Jos Berkemeijer

Most of the metrics we’ve implemented at MFO address down-side risk. Our principal MFO Rating is based, not on Sharpe, but on Martin, which uses the so-called Ulcer Index to normalize any excess return. Ulcer Index …

(Peter Martin was recently mentioned in Brain Livingston’s article: “Widely followed risk-return measure for stock portfolios is debunked after 55 years.” It is not Martin Ratio.)

Martin is a risk adjusted return measure that answers the question: how much Continue reading →

Sideways Markets

By Charles Lynn Bolin

Every strategy should be evaluated not just on a “benefit of being right”, but at least as importantly, on a “cost of being wrong”, basis…

The Little Book of Sideways Markets, Vitaliy N. Katsenelson

I just finished The Little Book of Sideways Markets (2010) by Vitaliy N. Katsenelson. Mr. Katsenelson is a value investor, an author and CEO of a small but classy Colorado investment advisor; he offers a singularly engaging personal bio on his well-read Contrarian Edge blog. His two books cover the same ground, but are written for different audiences: professional (Active Value Investing) and lay (The Little Book of Sideways Markets). His concern here is with markets that can go up and down for 10 or 20 years and end up near where they started. In this article, I look at investing in a turbulent market which I believe will occur over the Continue reading →

Emerging Market Value investing revisited

By David Snowball

About a year ago we identified emerging markets value funds as one of the market’s few bright spots, at least if valuations are important. (And they are.) Since we published that story, three things occur to us.

  1. Some emerging markets value funds have, indeed, done well.
  2. The long-term case for emerging market value remains strong.
  3. The options for prospective EM value investors have become clearer

Continue reading →

great horned owl

Crawford Dividend Opportunity (CDOFX)

By David Snowball

Objective and strategy

Dividend Opportunity pursues attractive long-term total return with below market risk. They pursue that goal by investing in a portfolio of small cap US companies that demonstrate a consistent pattern of earnings and dividend growth. Their discipline is bottom-up, value-oriented and focused on company fundamentals. There are currently Continue reading →

great horned owl

Invenomic Fund (BIVRX/BIVIX/BIVSX)

By David Snowball

Objective and strategy

Invenomic Fund is seeking long term capital appreciation. They pursue that through a widely diversified long-short portfolio comprised, primarily, of domestic stocks. The long and short portfolios each held about 130 positions, as of August 2019. The long portfolio is generally fully invested in undervalued, timely stocks while the size of the short portfolio varies based on the opportunities available. The long portfolio is all-cap and might include equity securities other than just common stocks. The fund’s short portfolio is broadly diversified and targets stocks which Continue reading →

Launch Alert: Grandeur Peak Global Contrarian

By David Snowball

Grandeur Peak Global Contrarian Fund (GPGCX) launched on Tuesday, September 17, 2019. It is Grandeur Peak’s first fund launch since 2015. Like the other core Grandeur Peak funds, Global Contrarian is capacity-constrained and will, in all likelihood, be closed to new investors in relatively short order. The exact strategy capacity, the Grandeur Peaks folks tell us, is hard to pin down because it’s affected by the liquidity of the names in the portfolio and the demands from some of the other GP funds whose portfolio overlaps it. Certainly more than $100 million, likely well under $300 million.

Of the seven Continue reading →

old license plates on a wall

Funds In Registration

By David Snowball

The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. Most funds currently in registration will become available by late October.

Our list contains 22 new funds and active ETFs. We don’t track Continue reading →

old alarm clock

Manager Changes, September 2019

By Chip

Every month we track changes to the management teams of equity, alternative and balanced funds, along with a handful of fixed-income ones. Why “a handful”? Because most fixed-income funds are such sedate creatures, with little performance difference between the top quartile funds and the bottom quartile, that the changes are not consequential. Even in the realms we normally cover, the rise of management committees dilutes the significance of any individual’s departure or arrival.

This is another of the months in which the number of funds making changes is relatively large – 55 – but the number making dramatic changes is minimal. Alger Emerging Market’s Continue reading →