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.

Launch Alert: The Touchstone adoptees

By David Snowball

On October 30, 2017, Touchstone Investments finalized the adoption of a suite of Sentinel funds. The Sentinel funds were somewhere between “solid” and “outstanding,” depending on the fund in question, but they were not at all well known. Given the maturity of the mutual fund marketplace, Sentinel saw little prospect for growth and little reason to continue serving as adviser to the funds. Like a number of other firms, including UMB which recently sold the Scout Funds, Sentinel looked to sell the funds after (80) years in the business. Touchstone Investments stepped up.

Nine Sentinel funds were involved in Continue reading →

There’s no idea so dumb that it won’t attract a dozen ETFs

By David Snowball

I’m not sure that Bitcoins actually exist. I’ve never seen one, and I’ve never interacted with one. I can’t quite explain what they are, beyond invoking the term “cryptocurrency” (which leads me to wonder if its ghoulish story will eventually be popularized under the title, “Tales from the Crypto …”?). Our colleague Sam Lee is intrigued by the potential for the underlying software, though skeptical of Bitcoin per se.

Not quite as skeptical as Hamilton Nolan seems to be. Mr. Nolan, whose writing style occasionally makes Continue reading →

Funds in Registration

By David Snowball

Relatively few funds enter registration in November or December. Advisers really want to go live by December 30th, so that they will be able to show full-year results for 2018. As a result, lots of funds go into registration in October so that they can emerge from the SEC’s “quiet period” by the end of December. As a result, this month’s filings are limited to a handful of institutional funds that might offer retail shares, and a pack of high-visibility active ETFs from Vanguard. Continue reading →

Briefly Noted

By David Snowball

Updates

It’s been a good first year for Laura Geritz, the folks at the Rondure funds and her partners at Grandeur Peak. Rondure New World (RNWOX) has drawn $90 million in assets since its May 1, 2017 launch. Rondure Overseas (ROSOX) has drawn just $15 million so far, despite having stronger absolute and relative returns than its sibling. New World is an unconstrained all-cap fund investing in firms that are either in or are substantially tied to, the emerging markets. Overseas has a much lower market cap reflecting, in part, New World’s investments in huge multinational corporations that have substantial interests in the emerging world. Both funds have about 8% cash and portfolios that are reassuringly out-of-step with their peers; that is, both Continue reading →

Launch Alert: Northern Funds U.S. Quality ESG Fund (NUESX)

By David Snowball

On October 02, 2017, Northern Trust Asset Management launched Northern U.S. Quality ESG Fund.  It strikes me as a particularly interesting fund which combines two separately valuable commitments in a single low-cost platform.

The case for investing in high quality companies is almost definitional. No sensible person buys low quality anything when, for about the same price, they can get a high quality alternative. The key is having a viable definition of “quality” and a clear sense of how much of a premium a quality company might charge. Northern has done a Continue reading →

Elevator Talk: Sean Stannard-Stockton, Ensemble Fund (ENSBX)

By David Snowball

Since the number of funds we can cover in-depth is smaller than the number of funds worthy of in-depth coverage, we’ve decided to offer one or two managers each month the opportunity to make a 200 word pitch to you. That’s about the number of words a slightly-manic elevator companion could share in a minute and a half. In each case, I’ve promised to offer a quick capsule of the fund and a link back to the fund’s site. Other than that, they’ve got 200 words and precisely as much of your time and attention as you’re willing to share. These aren’t endorsements; they’re opportunities to learn more.

The conventional wisdom is that passive investing, particularly Continue reading →

Fuller & Thaler Behavioral Small-Cap Equity (FTHNX), November 2017

By David Snowball

Objective and strategy

FTHNX pursues long-term capital appreciation. The managers invest in a diversified US small cap equity portfolio. The managers seek out stocks where other investors are likely to make behavioral mistakes. If they conclude that an investor mistake is likely and the company has solid fundamentals, the portfolio managers generally buy the stock. They sell when the misbehavior has run its course, which tends to lead to a high turnover portfolio. That said, they do not automatically buy or sell based on a single security’s characteristics; they impose a risk management overlay that helps control exposures to sectors, size, and other characteristics. The fund currently holds Continue reading →

Funds in Registration

By David Snowball

A great month, especially if you’re rich. AQR has two new bonds funds tagged for $1,000,000 and $5,000,000 minimums. DFA has registered to launch Emerging Markets Sustainability Core 1 Portfolio and Global Core Plus Fixed Income Portfolio, kept so far from the hoi polloi that they don’t even list investment minimums. Rather, we suppose, like the restaurants that don’t list prices on the menu. Likewise, the Martin Currie Emerging Markets SMA Shares Fund will only be available to Legg Mason’s SMA customers. Joel Greenblatt has filed his latest fund, Gotham 500 Plus Fund, with a quarter million dollar minimum. It’ll invest long in large caps and long/short in small- to mid-caps. 17 of his 19 other funds have peer-beating returns since inception. RMB International Small Cap Fund has a $100,000 minimum for now, though an Investor class might come along one day. The advisor has no other international funds; remember, these used to be the Burnham Funds. The RQSI GAA Systematic Global Macro Fund will set you back 2.48% and $5,000,000. Continue reading →

Briefly Noted …

By David Snowball

 

The $12 million Global Strategic Income Fund (VEEEX) has a couple upgrades planned for the next month. “These changes included the appointment of a new adviser and sub-adviser to the Fund; revisions to the Fund’s investment objective; revisions to the Fund’s investment strategy; a change to the name of the Fund; changes to certain service provider agreements; and the addition of new share classes as well as the conversion of Class C Shares into Class A Shares.” Nominally the current version of the fund had a global, all-asset strategy; practically, it was a global equity fund with a 30-day SEC yield of 0.00%. The new fund will be Continue reading →

October 1, 2017

By David Snowball

Dear friends,

It’s finally fall, my favorite season of the year. The heat abates, the garden quiets, the apples ripen.  Chip and I will soon venture north to Wisconsin for leaf peeking and visits to 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). You’ve still got time to do better. In the Midwest, anyway, October is the month for Haralson and King David, Golden Russet and Creston, Enterprise and Voyager. Heck, you might find a few Lura Red or Wolf Rivers left, if you’re Continue reading →

The Story without a title

By David Snowball

In journalism, the headlines you read are generally an afterthought, crafted by a headline writer – not the story’s author – to fit the available space and grab attention. For us, story titles function differently: they’re “framing devices,” which we write early and which help us figure out how to explain the entire story.

This is “the story without a title,” because I’ve got Continue reading →

The wise reader’s two most important words. “Uh, no.”

By David Snowball

Having concluded that we’re not willing to pay for the services of professional journalists and editors, we’re increasingly getting what we paid for: stories written by robots, amateurs, dilettantes and self-interested parties posing as journalists. Here’s my monthly roundup of stories that made my head hurt, plus one opening note on Continue reading →

Elevator Talk: Ryan Caldwell, Chiron Capital Allocation Fund (CCAPX)

By David Snowball

Since the number of funds we can cover in-depth is smaller than the number of funds worthy of in-depth coverage, we’ve decided to offer one or two managers each month the opportunity to make a 200 word pitch to you. That’s about the number of words a slightly manic elevator companion could share in a minute and a half. In each case, I’ve promised to offer a quick capsule of the fund and a link back to the fund’s site. Other than that, they’ve got 200 words and precisely as much of your time and attention as you’re willing to share. These aren’t endorsements; they’re opportunities to learn more.

The good news is that, as a concept, “world allocation funds” makes Continue reading →

Launch Alert: Artisan Global Discovery Fund (APFDX)

By David Snowball

On August 21, 2017, Artisan Partners launched a near-clone of their very successful Artisan Global Opportunities Fund (ARTRX). Artisan organizes their managers into eight autonomous teams, with each team supported by an analyst corps and responsible for one or more funds. Global Discovery will be managed by the Growth team, which is also responsible for Global Opportunities, Mid Cap (ARTMX) and Continue reading →

Funds in registration

By David Snowball

It’s been a quiet month in the land of new fund registrations. There are ten new (mostly) no-load retail funds in the pipeline, as well as a half dozen loaded funds (which I’m mostly ignoring) and a slew of ETFs. The most intriguing development is the question, who’s offering the most pointless ETF? Candidates are the ProShares Decline of Bricks and Mortar Retail ETF which will surely compete with the ProShares Long Clicks/Short Bricks Retail ETF while the USCF Contango-Killer Natural Gas Fund (No K-1) takes on Continue reading →

Briefly noted

By David Snowball

I’ve lost track of many of the funds that we profiled back in the FundAlarm days. This month one surfaced, Capital Advisors Growth Fund (CIAOX), and it was awfully nice to see that (a) they’re still providing exactly what they promised long ago – cautious equity exposure with no glitz – and (b) we were right, nine years ago, in assessing it as an exceptionally solid citizen for equity investors interested in sleeping well at night.

Briefly the number of mutual funds liquidating matched the number of ETFs liquidating, then September 29th came around and Continue reading →

September 1, 2017

By David Snowball

Dear friends,

Our thoughts and prayers go out to the people in Houston and the surrounding Gulf Coast. The receding flood waters end one phase of the disaster and exposes the next.

Several mutual fund families have headquarters, or significant presence, in the Houston area. Those include Ascendant, Bridgeway, Crossmark Global (formerly Capstone), Invesco, Kerns Capital, Salient, Sarofim and Continue reading →

The Land of the Investment Dervishes

By David Snowball

America’s best-selling poet is a Muslim theologian who died 750 years ago. Jalal ad-Din Muhammad Rumi (alternately, Mevlana Jalaluddin Rumi) is not only namesake to Beyonce’s new child, but also founder of Sufism, a branch of Islam. Sufism is both mystical and ecstatic. Rumi was given to a whirling dance that reflects the boundless joy and energy that overwhelms a believer; it helped believers express and achieve ecstasy, was codified by his son and practiced by dervishes, literally “poor monks.” They became famous as whirling dervishes, who spun with an almost unhuman grace, energy and tenacity.

I thought of them as Continue reading →

Centerstone Investors (CETAX/CENTX), September 2017

By David Snowball

Objective and strategy

Investors Fund seeks long-term growth by investing, primarily, in an all-cap global equity value portfolio though there’s no formal limit on its ability to hold fixed-income securities, including private placements. The manager’s value discipline leads him to higher-quality firms whose stocks are selling at a discount to his assessment of their intrinsic value. As the stresses on the firm rise, so does the size of the discount he demands. The goal is to also invest with a margin of safety, which might also lead the fund to hold substantial amounts of cash when attractive and attractively-priced opportunities are not available. As of June 30, 2017, cash and cash surrogates comprise 26% of the portfolio. The manager expects to keep at least Continue reading →