On May 17, 2024, Otter Creek Advisors launched the Otter Creek Focus Strategy ETF (OCFS). In doing so, they are providing an existing separately managed account strategy which launched on May 29, 2020, as an ETF. Otter Creek was founded in 1991 to manage a long/short hedge fund and, in 2013, launched a long/short mutual fund. That four-star fund Continue reading →
I love a good mystery. WPG Partners Select Hedged is one. It is live, tracked by Morningstar, and available through Schwab, but appears on neither the Boston Partners nor WPG websites. Here’s what to know.
On May 31, 2024, Boston Partners launched WPG Partners Select Hedged, a long/short small-cap fund from its WPG Partners subsidiary. Boston Partners manages Continue reading →
On July 10, 2024 – T. Rowe Price launched T. Rowe Price Intermediate Municipal Income ETF (TAXE), an actively managed ETF. Price has 16 other ETFs, including semi-transparent and transparent equity and income funds but this is the first that does not directly mirror an existing fund.
The fund is co-managed by James Lynch and Charlie Hill, who collectively have 53 years of investment experience, and have served Continue reading →
Dear friends,
Welcome to Really, Really Summer … and to the July issue of Mutual Fund Observer.
Summertime is an especially blessed and cursed interval for those of us who teach. On the one hand, we’re mostly freed from the day-to-day obligation to be in the classroom. Some of us write, some travel, and some undertake “such other duties as may from time to time be assigned” by our colleges. On the other hand, we hear the clock ticking. All year long, as we try to face down a stack of 32 variably literate essays at 11 p.m. Sunday night, we think “If I can just make it to summer, I’ll Continue reading →
Briefly brilliant performance isn’t all the tough. It requires rather more luck the skill and it can be wildly profitable for the adviser, though deadly for the investors. ARK Innovation ETF is, of course, the current poster child for boom-then-bust. The fund posted triple-digit returns in 2020, saw its assets explode then promptly (and predictably) crashed. Anyone who bought five years ago and has devoutly held on has lost 1% annually and has trailed 99.9% of all similar investors. Those who bought at the peak three years ago have clocked annual Continue reading →
No liquidations, no mergers, and 100% of funds posted above-average returns. Of the 68 firms with a 100% 10-year success rate, 41 also have a perfect five-year record.
| Firm Success Ratio 10-Year | Firm Success Ratio 5-Year | # of funds | |
| Appleseed | 100 | 100 | 1 |
| Auer | 100 | 100 | 1 |
| Bretton Fund | 100 | 100 | 1 |
| Caldwell & Orkin | 100 | 100 | 1 |
| Cantor Fitzgerald | 100 | 100 | 2 |
| Changing Parameters | 100 | 100 | 1 |
| Channel Investment Partners | 100 | 100 | 1 |
| Clark Fork | 100 | 100 | 1 |
| Cook & Bynum Capital | 100 | 100 | 1 |
| Disciplined Growth Investors (DGI) | 100 | 100 | 1 |
| Dodge & Cox | 100 | 100 | 6 |
| Equity Investment | 100 | 100 | 1 |
| First Foundation | 100 | 100 | 2 |
| Freedom | 100 | 100 | 1 |
| Hamlin Capital Management | 100 | 100 | 1 |
| Hillman | 100 | 100 | 1 |
| Hood River Capital Management | 100 | 100 | 1 |
| Investment House | 100 | 100 | 1 |
| Ironclad Funds | 100 | 100 | 1 |
| Kopernik | 100 | 100 | 2 |
| Lyrical Partners | 100 | 100 | 1 |
| MainGate Funds | 100 | 100 | 1 |
| Matisse Funds | 100 | 100 | 1 |
| Meehan Focus | 100 | 100 | 1 |
| Moncapfund | 100 | 100 | 1 |
| Needham | 100 | 100 | 3 |
| New Alternatives | 100 | 100 | 1 |
| OCM | 100 | 100 | 1 |
| Otter Creek | 100 | 100 | 1 |
| Payson | 100 | 100 | 1 |
| Performance Trust Asset Management | 100 | 100 | 3 |
| Port Street Investments | 100 | 100 | 1 |
| Private Capital Management | 100 | 100 | 1 |
| Seafarer | 100 | 100 | 1 |
| Smead | 100 | 100 | 2 |
| Sound Shore | 100 | 100 | 1 |
| Sparrow | 100 | 100 | 1 |
| Stringer Asset Management | 100 | 100 | 1 |
| Teberg | 100 | 100 | 1 |
| Terra Firma Asset Management | 100 | 100 | 1 |
| Vericimetry | 100 | 100 | 1 |
Inevitably some of the 10-year winners have tailed off more recently. It’s reassuring that only 17 of 68 funds (25%) have tailed off badly, with fewer than half of their 10-year funds still thriving.
| Firm Success Ratio 10-Year | Firm Success Ratio 5-Year | |
| Fuller & Thaler | 100 | 83 |
| WCM Investment Management | 100 | 75 |
| Bridge Builder | 100 | 75 |
| Grandeur Peak | 100 | 71 |
| Trillium | 100 | 50 |
| Prospector | 100 | 50 |
| Medalist Partner | 100 | 50 |
| Jensen | 100 | 50 |
| Campbell & Company | 100 | 33 |
| Oakhurst | 100 | 25 |
| Swan Wealth Advisors | 100 | 20 |
| YCG FUNDS | 100 | 0 |
| Reaves | 100 | 0 |
| Polen Capital | 100 | 0 |
| Polaris Capital Management | 100 | 0 |
| MP 63 | 100 | 0 |
| MAI | 100 | 0 |
| Long Short | 100 | 0 |
| Lisanti Capital Growth | 100 | 0 |
| JAG Capital Management | 100 | 0 |
| EIP Funds | 100 | 0 |
| Edgewood | 100 | 0 |
| Copley | 100 | 0 |
| Conestoga | 100 | 0 |
| Clifford Capital | 100 | 0 |
| BBW Capital | 100 | 0 |
| Akre | 100 | 0 |
Our colleague Devesh Shah has been in search of a reason to have any direct international exposure. That is, for an answer to the question, “Why should I invest one cent in an international equity fund?” He notes that the default for many endowment portfolios is 18% international, but that – over the course of the 21st century so far – the actual efficient frontier portfolio held only 5% international equity.
International stocks are 40% of the total global capitalization. They are Continue reading →
Dear friends,
It’s been a whirlwind month for us. In just about 30 days, I got married (waves to Chip!), finished my 68th trip around the big ball o’ fire in the sky, bade farewell to my 40th group of seniors (just a heads up, world. They’re coming for you!), visited with the managers from FPA (really, if you put Mr. Scruggs in a cardigan he’d totally rock the Mr. Rogers’ look), watched the Dow hit 40,000 and visited my brothers and sisters in Pittsburgh for the first time in two years.
Hi, guys.
You made it. You survived Covid and being kicked off campus midway through spring of your freshman year. You survived a year of Zoom. You survived that weird casserole the dining commons kept serving. You survived me. And, at the end of it, you were standing together, laughing and glowing. We’re incredibly proud of you and hopeful for the good you can do in the world.
I’ve never aspired to deliver a “last lecture” for graduates, but you might consider Continue reading →
The fund seeks capital appreciation by investing in the stocks or preferred shares of U.S. small-cap companies. The manager pursues a sort of “quality value” strategy: he seeks high-quality firms (strong balance sheets and strong management teams) whose stocks are undervalued (based, initially, on price/earnings and price-to-cash flow metrics). Because it is willing to hold companies as their market cap rises, the portfolio has about 9% invested in mid-cap stocks that it bought when they were small caps.
In general the portfolio holds Continue reading →
Dear friends,
Welcome to the May issue of Mutual Fund Observer. We’re glad you’re here.
May marks the end of my 40th year of teaching at Augustana College. (And no, they’re not free of me yet. I’m back again in the fall!) It’s an amazing place that has grown a lot over the course of my career. We were founded in 1860 by educated immigrant parents who were anxious to preserve the traditions of their (Scandinavian) homelands while Continue reading →
The strategy is to assemble a portfolio of 35-70 stocks. The target universe is high-quality, dividend-paying securities of U.S. and non-U.S. companies, including those in emerging market countries. GQG Partners primarily relies on fundamental, rather than quantitative, research to evaluate each business based on financial strength, sustainability of earnings growth, and quality of management. The investment strategy is quality first; from the pool of firms that meet its Continue reading →
There’s so much we can’t explain:
What’s the universe made of? (Hint: it doesn’t actually seem to be “matter and energy”)
What lives in the ocean’s “twilight zone”? (“It’s remote. It’s deep. It’s dark. It’s elusive. It’s temperamental,” according to Woods Hole … perhaps the most mysterious and vital space on the planet)
What killed Venus? (The planet, not the goddess. Best guess is that it Continue reading →
Dear friends,
It’s April. I spent much of the Easter weekend wearing a t-shirt out to work in the gardens. It was glorious. Today, the forecast is for hail. Tomorrow? Snow.
Next week? Oh, I don’t know … dragon fire?
And still, it behooves us to be grateful for what we have. The world’s most corrosive force is not greed. It’s envy, which is driven by the sense that what we have just isn’t enough, and bitterness that others have more. That’s a theme that Charlie Munger reflected on repeatedly: “I have conquered envy in my own life. I don’t Continue reading →
Dear friends,
In like a lion, out like a lamb? The Total Stock Market Index has risen 12% in the past three months, as has the S&P 500. Nvidia stock is up 76% in the same period while semiconductor stocks inched up … 48%.
The thermometer in Davenport today topped 76 degrees, just a bit warm for a late winter day. We heard that participants in the March 1st Polar Plunges at locations across the upper Midwest had to be Continue reading →
As we go to press, the S&P 500 is at its highest level in history: 5137. It set a record by passing 5000 for the first time on February 12, then another record high of 5100 two weeks later.
In reality, of course, the S&P is not rocketing upward. The S&P 7-to-10 is, with the other 490-493 stocks as an afterthought. The top 10 stocks contributed 93% of the index’s 2023 gains. Goldman Sachs declares that the “S&P 500 index is more concentrated than it has ever been,” while Amundi, Europe’s largest Continue reading →
There are two paths that investors can follow, and pretty much only two.
This involves three steps. Invest in a risk-aware strategy. Fund it regularly. Get on with life. There will be ups and downs but, with time, you’ll win.
This involves Continue reading →
Dear friends,
February is a fraught month, historically. For Romans, it once did not exist. And then it did, as the last month of the year, with the new year beginning when the crops were first sewn and all eyes looked to the future. Februalia, the festival of purification, was the last chance to put the misdeeds of the past behind us and to be prepared to build a future upon a solid foundation.
It’s also the month in which Augustana launches its Spring semester; as I ponder the snow piles on campus, I could imagine a more Continue reading →
College professors are, quintessentially, learning machines. Give us 15 minutes of peace, and we’ll sink happily into piles of data, stacks of books, beckoning journal articles, or quiet processing.
And the reality of the matter is that almost no one gives anyone 15 minutes of peace these days.
Why 15 minutes? Read Mihaly Csikszentmihalyi, Flow: The Psychology of Optimal Experience (2008). Flow is a state of complete immersion in a project, and it seems to take us 15 minutes or so to get in the flow. Every “do you have just a minute?” kicks us back out and costs us another 15 minutes to get back.
Augustana’s January Term is Continue reading →
Someone will always be getting richer faster than you. This is not a tragedy.
I’ve heard Warren say a half a dozen times, “It’s not greed that drives the world, but envy.”
Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?
Charles Thomas Munger (1924-2023)
Each year I share Continue reading →
