Dear friends,
Welcome to the March issue of Mutual Fund Observer.
I am surprised, sometimes, at how much I now appreciate some of the stuff that I found most mindless and annoying in high school. (I’m still not there with Moby Dick; the whole idea of a monomaniacally obsessed old guy leading his Continue reading →
“We believe the pre-end period will be filled with unprecedented opportunities for profit.” — New Yorker cartoon
When we published “Not Built for This: The Argument for Infrastructure Investing in an Unstable Climate” in January 2025, our thesis was straightforward: climate destabilization would drive urgent, massive infrastructure spending as aging systems fail under environmental pressures they were never designed to withstand. Just two months later, this argument has been dramatically reinforced—not despite, but because of aggressive federal climate policy rollbacks. The New York Times offered this assessment on Continue reading →
Exchange-traded funds (ETFs) that are designed to be used in bond ladders with target maturities have been around for over a decade. They come in Corporate Debt BBB-Rated, High Yield, Inflation-Protected, U.S. Treasury General, and Municipal Bond Lipper Categories. They have the advantages of simplicity, diversification, liquidity, flexibility, and low expense ratios. The disadvantages are that an active investor may be able to selectively pick higher-yielding bonds, some of the bonds held in the ETF may be callable, the dividends are not as predictable as individual bonds, and in the final year the bonds that have matured are invested in Treasury bills.
Invesco manages Bulletshares bond funds and BlackRock manages iShares iBonds. A summary is shown in Table #1. Included in the iShares iBond ETFs totals Continue reading →
I wrote Business Cycle: Boring Bond Funds at Seeking Alpha in June 2019, describing the yield curve and that conditions were favorable to increase allocations to bonds. In hindsight, I believe that a “soft landing” would have been achieved had it not been for the COVID-induced recession. The conservative accounts that I manage are now fully invested in bonds. In this article, we will look at “Spicy Bond Funds” for those who are interested in high yield and safety. Spicy, but not too hot, and easy to manage!
There are several important considerations for investing in bonds. First, the S&P 500 earnings yield is less than the 10-year Treasury which Continue reading →
Investors are increasingly skittish. They are warned frequently that the top of the US equity market is feverishly overpriced and might bring the rest down when it falls. And, too, chaos in the national government is making them worried if not yet ready to abandon their lovelies. Interest is growing in finding ways to book gains independent of the stock market. One manifestation of that is the insane growth in economically inefficient buffered funds, and another is the rising interest in securing access to private equity. “Private equity” describes the wide world of corporations whose shares are Continue reading →
In the investment world, there’s an old saying: “There’s no such thing as a free lunch.” Yet the latest crop of exchange-traded funds (ETFs) offering both daily liquidity and exposure to illiquid assets might seem to promise just that—a financial equivalent of eating decadent cheesecake without gaining an ounce. Continue reading →
Parnassus International Equity Fund is in registration. The fund, managed by Ken Ryan, CFA, will be a large cap fund that invests in equity securities of non-U.S. companies. Expenses have not been stated.
Profunds has launched its Ether ProFund. The fund does not invest directly in ether, but rather ether future contracts. According to the prospectus, the fund has a Continue reading →
Dear friends,
Planting trees is a venture into the future, it is a hand held out to other generations.
Mirabel Osler
As I sit down to write this month’s letter, I’ve been wandering around my garden thinking what an unsalvageable mess it is: an unlovely and unidentifiable tangle of dead stems, fall leaves, stubble, trash mysteriously blown in, and the occasional corpse. (Typically avian.) It’s hard not to despair of it. And, hard not to imagine parallels to Continue reading →
There may be a place for tax-exempt municipal bond funds in the portfolios of middle-class and upper-middle-class American households as well as for those in the upper-income group. I have about 15% of my fixed-income funds invested in municipal bonds. They may be suitable in long-term after-tax accounts where you want to reduce taxes. State-focused municipal bond funds may also reduce state income taxes. This article discusses Continue reading →
A tradition dating back to the days of FundAlarm was to annually share our portfolios, and reflections on them, with you. My portfolio, indolent in design and execution, makes for fearfully dull reading. That is its primary charm.
This is not a “here’s what you should own” exercise, much less an “envy me!” one. Instead, it’s a “here’s how I think. Perhaps it will help you do likewise?” exercise. Continue reading →
What kind of investor are you? Do you want yield, safety, yield with a reasonable risk, or total return? I created a ranking system to combine Risk, Yield, Return, Quality, Trend, and Tax-Efficiency factors into an overall rating. I used yield divided by Ulcer Index which measures the depth and duration of drawdowns to limit the number of categories that I evaluate.
My favorites may not be the same as yours. Table #1 shows how I rank the categories. I will be discussing Continue reading →
Every day, Americans rely on 2.2 million miles of aging water pipes, some laid before the Civil War, to deliver life’s most essential resource. This vast network is crumbling beneath our feet, requiring over $2 trillion in repairs and upgrades by 2043. Yet this infrastructure crisis isn’t just about fixing what’s broken – it’s about building for a future where three-quarters of Earth’s land masses are becoming permanently drier and extreme weather events are the new normal.
For investors, this convergence of urgent infrastructure needs and climate adaptation creates Continue reading →
Uncertainty is in the air. Do you feel it? The price-to-earnings ratio of the S&P 500 is approaching 30 and is within bubble territory which implies below average long-term returns. Thirty-five percent is concentrated in the top ten holdings and 46% is concentrated in the Technology and Financial Sectors. The economy is stronger than expected and inflation pressures still exist so volatility is high. The yield on the 10-year treasury fell from 4.7% last April to 3.6% in September back up to 4.8% last month and has fallen to 4.6%. Bond investors are expecting rates to remain higher for longer and want to be compensated for duration risk.
President Trump campaigned on the platform of tax cuts which are a stimulus but Continue reading →
Dana Emery, Chair and CEO of Dodge and Cox Funds, has decided to retire on December 31, 2025. Effective January 1, 2026, David Hoeft will succeed her as the Chair while continuing his CIO role. Roger Kuo will succeed as the Chair while continuing to serve as President of the firm.
Harbor Capital plans to launch eight subadvised ETFs across several asset classes in the coming months, according to a filing with the Securities and Exchange Commission.
There will be Continue reading →
Dear friends,
Welcome to the January issue of Mutual Fund Observer.
January was named after Janus, the tutelary deity of the year’s first month. As tutelary, he was guardian, patron, and protector. Absent from the Greek pantheon, Janus was the Roman god of beginnings, transitions, and endings. It was the “transitions” part that led Romans to place the two-faced god near entries and passageways, where he oversaw their comings and Continue reading →
On Wednesday, 8 January, at 11 a.m. Pacific (2 p.m. Eastern), we will be conducting our year-end webinar to review funds and MFO Premium updates. If you can make it, please join us by registering here.
We will use MultiSearch Pre-Set screens and other custom criteria to review fund performance in 2024. MultiSeach is the site’s Continue reading →
My retirement planning for the past two years since retiring has focused on the Bucket Approach to have the right funds in the right investment buckets to have high-risk adjusted returns while minimizing taxes over my lifetime. This article focuses on forty of the top performing ETFs that I believe can form a good foundation for the coming decade. I wrote Investing in 2025 And the Coming Decade describing why I think bonds will outperform stocks on a risk-adjusted basis Continue reading →
There’s a famous New Yorker cartoon that we don’t have permission to reproduce. It shows a cheerful executive speaking from a lectern in a conference room.
And so, while the end-of-the-world scenario will be rife with unimaginable horrors, we believe that the pre-end period will be filled with unprecedented opportunities for profit!
Welcome to the case for infrastructure investing in Continue reading →
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“For the young the days go fast and the years go slow; for the old the days go slow and the years go fast.” – Anna Quindlen, Lots of Candles, Plenty of Cake: A Memoir of a Woman’s Life.
Secular bear markets with low returns along high volatility often deter younger investors from starting to invest, yet they offer tremendous buying opportunities. Prioritizing the long-term need to save for retirement over Continue reading →
