Welcome to the April Mutual Fund Observer!
My mom used to say, “March sometimes comes in like a lion.” She never added, “and then it eats you.”
March, named for the God of War, strikes me for two reasons. First, it is the month that has encompassed a whole series of catastrophes in the financial markets and Continue reading →
The typical response from someone when they find out that I have retired is, “Congratulations! What do you do in your spare time?” To which I reply, “I volunteer at Habitat For Humanity and Neighbor To Neighbor, go to the gym, visit family, take day trips, and write financial articles.” I would get a more excited response if I replied that I go paragliding in Costa Rica. I do occasionally get a response from people wanting to know more about investing.
This article summarizes how Continue reading →
AI has a presence in almost every aspect of modern life, from summarizing buyer responses on Amazon to working with radiologists to discover incipient tumors on scans. Few industries have been as anxiously vigilant on the subject as investment management. Increasingly, managers are relying on AI to do part of their work and, increasingly, they wonder if it could eventually replace them entirely. (Spoiler: quite possibly.)
Artificial intelligence (AI) has Continue reading →
A young lady where I volunteer asked me when I started saving. I started saving as a child, but had no money saved until nearly thirty years later when I started down a “stable” career path after graduating with an engineering degree and an MBA. I described to her that Fidelity’s guideline is to have one year’s income saved by age 30 and 10 times your income by the time you retire. The next question was, “How do you protect your savings from severe corrections in retirement?” I explained that inflation is the silent risk of being too conservative and described target date funds as perhaps being ideal for someone starting out in savings when the daily challenges of home and work life weigh heavy on time requirements. Continue reading →
“Put your trust in God, my boys, and keep your powder dry!”
Advice attributed to Oliver Cromwell, in the poem “Oliver’s Advice” (1834)
Here are three simple truths Continue reading →
I have had conversations with friends and family, and the question comes up, “Where should I put my money [cash] to earn a safe yield. This comes from younger people starting to build a nest egg and older people wanting to protect their nest egg. The options asked about are high yield savings accounts, certificates of deposits (CDs), or paying off mortgages. One concept has confused people when talking about bond funds. There are two components to fixed income return: 1) the yield, which is typically paid daily, monthly, quarterly, or annually, and 2) changes in yield that impact the price of the bonds. If the yield Continue reading →
On March 26, 2025, the GlacierShares Nasdaq Iceland ETF was launched. The ETF tracks the MarketVector Iceland Global Index. The Index tracks both Icelandic companies (54.5% of the index) and companies in other Nordic nations that have a substantial footprint in Iceland (13% Luxembourg, 11% Norway, 7% Switzerland … followed by the US and the Faroe Islands, about equally weighted). Iceland’s economy is heavily dependent on just a handful of industries: energy production, tourism, fishing, and smelting aluminum. (Smelt and smelting?)
The market cap of Iceland’s two stock exchanges, the main exchange and the small/midcap exchange, comes to Continue reading →
CrossingBridge was recently named “Best Fixed Income Small Fund Family Group” at the 2025 U.S. LSEG Lipper Fund Awards Ceremony. As of February 28, 2025, CrossingBridge managed over $3.6 billion, specializing in investment grade & high-yield corporate debt with an emphasis on ultra-short & low-duration strategies as well as credit opportunities. The Firm’s core philosophy is “Return of Capital is more important than Return on Capital”. The accompanying picture on their website is very calming.
While MFO has not gotten to the point of sponsoring an award (much less a fancy-dansy awards banquet), we do Continue reading →
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 →
