Author Archives: David Snowball

About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles.

Funds in Registration

By David Snowball

We warned last month that we were “at the beginning of the annual insanity.” This month, it’s at flood tide.

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. Fund companies anxious to have a new fund up and running by December 31st need to have it in the hopper by the third week in October at the latest. And, my goodness, a lot of folks did find time to file.

The fund industry is given to fads and Continue reading →

Launch Alert: West Hills Tactical Core Fund

By David Snowball

On October 26, 2020, Frank Capital Partners launched the West Hills Tactical Core Fund (LEBOX).  The plan is to invest half or more of the portfolio directly, or through ETFs, in domestic large-cap stocks. The remainder will be placed in cash or options.  The fund will be managed by Alan McClymonds. From 2011 to 2015 Mr. McClymonds was a consultant for Whitaker Securities in New York, NY. Whitaker’s “primary goal is to provide global liquidity in the fixed income markets,” which they do for 200 or so clients.  From 2016 to present, Mr. McClymonds has been a private investor who was introduced to founder Brian Frank by a professional associate.

Three things to know Continue reading →

Launch Alert Redux: Evolutionary Tree Innovators Fund

By David Snowball

In our October issue, we shared a Launch Alert for ET Innovators. In late October we had the opportunity to speak with manager Tom Ricketts, and so share this expanded Alert.

On September 9, 2020, Evolutionary Tree Capital Management launched the Evolutionary Tree Innovators Fund (INVNX).  The plan is to invest in 25-35 domestic growth-oriented companies that qualify as “leading innovative Continue reading →

October 1, 2020

By David Snowball

Dear friends,

Welcome to autumn. It’s a season of such russet-gold glory that even Albert Camus (remember him from The Stranger and The Plague?) was forced to surrender: “Autumn is a second spring when every leaf is a flower.” It’s the time of apples and cinnamon, of drives through the Wisconsin countryside, and of gardens turning slowly to their rest.

Well, short drives through the Wisconsin countryside, anyway. Rather than the leisurely two-day circuit of western Wisconsin’s creameries, breweries (a nod to New Glarus), and orchards, I’ll mask-up and dart north to Gays Mills where I’ll try not to surrender entirely to the call of the orchards. You’d be amazed at the variety of flavors found in apples; there are about 200 varieties grown in the US, with the average grocery store stocking just a half dozen (including that flavorless favorite, Red Delicious). October is the month for Haralson and Continue reading →

Seven Canyons World Innovators Fund (WAGTX), October 2020

By David Snowball

Objective and strategy

The fund invests primarily in non-US growth companies that they believe are innovators in their sectors or industries. Nominally the managers can invest in “domestic and foreign … companies of any size.” As a practical matter, they invest in international small-cap companies. That’s reflected in the first four words atop their homepage:

While retaining the flexibility of Continue reading →

Harbor Global Leaders Investor (HGGIX), October 2020

By David Snowball

Objective and strategy

Harbor Global Leaders targets firms, worldwide, that are capable of generating sustainable, above-average, and relatively stable rates of earnings per share growth and strong free cash flows. The manager looks for companies that are leaders in their country, industry, or globally in terms of products, services, or execution. 

Their ideal business has six Continue reading →

Launch Alert: Vanguard ESG U.S. Corporate Bond ETF

By David Snowball

On September 24, 2020, Vanguard launched Vanguard ESG U.S. Corporate Bond ETF (VCEB) which tracks the Bloomberg Barclays MSCI U.S. Corporate SRI Select Index. The expense ratio is 0.12%. The ETF does not advertise a target maturity, other than to say that the maturities on portfolio securities will be “more than one year.” It also excludes small (under $750 million) bond issues.

There are about a dozen ESG-screened, fixed-income ETFs already in operation from BlackRock, DWS, Inspire, Nuveen, and PIMCO. Between them, assets are low Continue reading →

Launch Alert: Evolutionary Tree Innovators Fund

By David Snowball

On September 9, 2020, Evolutionary Tree Capital Management launched the Evolutionary Tree Innovators Fund (INVNX).  The plan is to invest in 25-35 domestic growth-oriented companies that qualify as “leading innovative businesses” (hence the ticker symbol).  The fund will be managed by Thomas M. Ricketts, formerly a senior portfolio manager on Sands Capital’s flagship Select Growth US Large-Cap Growth strategy, a $20+ billion Continue reading →

The Leader Board: Top Global Large-Cap Growth funds

By David Snowball

This month’s profile of Harbor Global Leaders (HGGIX) mentions “the top 10” global large-cap funds on several occasions. The argument for such funds is simple: in steady rising markets, almost – but not quite – everyone gets to win. In stagnant or declining markets, almost – but not quite – everyone suffers. Index funds work best when they can cheaply and efficiently capture the gains offered by rising markets. Concentrated growth funds hold out the prospect of identifying the small fraction of companies that can grow even when the world doesn’t. Those are companies that Continue reading →

Funds in Registration

By David Snowball

We are beginning of the annual insanity. 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. Fund companies anxious to have a new fund up and running by December 31st need to have it in the hopper by mid-October at the latest. The late September filings – we found 34 active funds and ETFs in registration – are the beginning of the annual flood.

Every month the ETF industry breathlessly trots out a few ideas designed to seize the moment. Think: “Virtual Work Continue reading →

Briefly Noted

By David Snowball

Updates

FPA has filed to launch FPA Queens Road Small Cap Value Fund. As we noted a couple of months ago, Bragg Capital, an adviser to the Queens Road Funds, entered into an agreement with FPA to have FPA take responsibility for marketing the funds. That allowed FPA to leverage their marketing group and allowed Bragg to focus on running two really exceptional funds: Value and Small Cap Value. This partnership is likely a substantial win for all involved, investors and advisors alike.

FPA, meanwhile, will no longer be managing the Continue reading →

September 1, 2020

By David Snowball

Dear friends,

Another school year has begun, likely the most fascinating in my 35 years as a college professor. My students were in class this morning, cheerful and masked. When asked about their summers, they did not say what the rest of us might: “it sucked.” To the contrary, they were uniformly positive about the experience (“I had a good summer! We didn’t get to travel anywhere, but I put in a lot of hours on my job and spent a bunch of time with my family!”) and hopeful for the year ahead.

The number of students was, quite understandably, reduced: Augustana welcomed something like 550 first-years when we’d normally see 700, with a lot of the deficit coming from international students – well more than a tenth of the college – not able (or willing) to travel Continue reading →

The Long (and Short) of It: Top-Tier Long-Short Options

By David Snowball

Writing in The Wall Street Journal, Simon Cable declared “‘Long-Short’ Funds Missed Their Moment” (8/9/2020, paywall). His argument: “The stock-market volatility in the first half of 2020 should have been a near-perfect period for ‘long-short’ mutual funds and exchange-traded funds to make a killing. Unfortunately, less than one in three such funds made money for investors during this tumultuous period.” His analysis was that the market’s moves were too quick for most investors to capitalize on them (even if they recognized the opportunity).

He notes that Neuberger Berman Long-Short (NLSIX) raked in the most cash and that the ProShares Long Online/Short Stores ETF had the top YTD performance.

“Most funds are mediocre” is not a terribly Continue reading →

Matthews Asia: High Profile Shuffle, Limited Downside

By David Snowball

On August 24, 2020, Matthews Asia announced a long set of manager changes and one fund liquidation. While they appear in a single document, there are at least two distinct triggering events behind them.

Event One: The departure of managers Tiffany Hsiao and YuanYuan Ji. Ms. Hsiao managed Matthews China Small Companies (MCSMX, since 2015) and, with long-time lead manager Michael Oh, Matthews Asia Innovators (MATFX, since 2018). Ms. Ji was the second manager of China Small Companies. Their departure was, so far as I can tell, a surprise to all. There is no word on their reason for leaving or their Continue reading →

Portfolio update #1: added Palm Valley Capital

By David Snowball

On August 26, I added Palm Valley Capital Fund (PVCMX) to my non-retirement portfolio.

Why does this make sense?

My portfolio has a simple, static asset allocation: 50% stocks, 50% not. Within stocks, the default is 50% here, 50% there plus 50% larger, 50% smaller. When we calculated the likely downside of my portfolio in a 2008-like event, the loss was in the range of 25%. That’s not catastrophic.

Currently, my portfolio is Continue reading →

Portfolio update #2: added T. Rowe Price Multi-Strategy Total Return

By David Snowball

On August 31, I added T. Rowe Price Multi-Strategy Total Return (TMSRX) to my non-retirement portfolio. I funded that position by transferring about half of my stake in T. Rowe Price Spectrum Income (RPSIX).

Why does this make sense?

I traditionally have minimal savings, in the sense of money in a savings account at the bank. That decision makes sense for me because my income is incredibly predictable (a perk of being a tenured senior member of the faculty at a strong college), though it grows minimally. Because savings accounts have for so long offered near-zero to negative real returns, I chose to keep the money otherwise destined for savings in exceedingly low volatility funds that offered the prospect of low- to mid-single-digit returns. RiverPark Short Term High Yield (RPHYX, 3% annual returns, 0.8% standard deviation, 1% maximum Continue reading →

Launch Alert: T. Rowe Price active ETFs

By David Snowball

On August 5, 2020, T. Rowe Price launched ETF versions of four of its largest actively-managed domestic equity funds.

Those are:

T. Rowe Price Blue Chip Growth ETF (TCHP)

  • The strategy targets mid- to large-cap, blue-chip companies that have the potential for above-average earnings growth and are well established. About 90% US stocks.
  • The strategy is managed by Larry Puglia, who has run it for 26 years.
  • The mutual fund version of the same name (TRBCX) is a five-star fund with a Silver analyst rating from Morningstar. It has $92 billion in assets.
  • The net expense ratio for the ETF is 0.57%, lower than the 0.69% charged by the fund.

Continue reading →

Launch Alert: Towpath Focus Fund

By David Snowball

On December 31, 2019, Oelschlager Investments launched the Towpath Focus Fund (TOWFX). The fund invests in 25-40 domestic stocks regardless of market capitalization. The fund is managed by Mark Oelschlager.

In general, we intend Launch Alerts to occur within six weeks of a fund’s launch. We entirely goofed up the Launch Alert for Towpath because we were looking for it under its preliminary name, Oelschlager Equity. As a result, we entirely missed the launch and the fund’s first eight months of existence. Regrets for the slip!

What do they do?

Towpath is a concentrated, all-cap equity fund. The portfolio currently holds 38 securities. About 11% of the portfolio is invested in non-US stocks. Portfolio construction begins with macro-level Continue reading →

Osterweis Emerging Opportunity (OSTGX), September 2020

By David Snowball

Objective and strategy

OSTGX pursues long-term capital appreciation. Their target universe is high quality, small- to mid-cap companies with the ability to generate rapid, sustainable revenue growth. The markers of quality include: (1) a distinct proprietary advantage; (2) a leading position in the industry; (3) potential for margin expansion; and (4) the presence of a strong management team. “Rapid revenue growth” translates to organic growth that averages 30% annually. It invests primarily in domestic companies; as of June 30, 2020, 11% of the portfolio is invested internationally though the prospectus permits up to 30%. As of June 30, 2020, just over 50% of the Fund’s assets were invested in securities within the health care and information technology sectors, slightly lower exposure than the Continue reading →