Author Archives: TheShadow

About TheShadow

The Shadow here! Like Mark, I’m a long-time member of the MFO community. I’ve started over 2300 discussion threads, most focusing on developments in the fund industry. I am a personal investor that was introduced to mutual funds when I was young to fund my college education. As I have grown older, I have expanded my mutual funds holdings to a point where I probably have too many; however, this year they all did extremely well due to the overall performance of the market. I work in the financial industry regulating the consumer finance industry in my state. My hope for the months ahead is that I might share word of developments in the finance industry – the comings and goings, launches and liquidations, the fun and the follies – with you.

Briefly Noted …

By TheShadow

AKRE Focus ETF is in registration. The Fund invests primarily in securities of companies listed on U.S. stock exchanges. Investments consist primarily of common stocks of companies of any size market capitalization. John H. Neff will be the portfolio manager. Expenses have not been disclosed. Mr. Neff also comanages Akre Focus Fund, which was founded by the namesake Charles Akre. Mr. Akre was remarkable, engaging, and … well, old. He retired from day-to-day management about three years ago. Since then Akre Focus Fund has performed in the way it was designed: exceptional in down markets, reasonable in up markets. In the absence of Mr. Akre, that seems not to have convinced shareholders to stay:

In the fund’s three “laggard” years, including 2024, it’s made an average Continue reading →

Briefly Noted

By TheShadow

Updates

SEC slaps GQG: The US Securities and Exchange Commission levied a $500,000 fine against GQG Partners and Rajiv Jain for violations of whistleblower protection laws and issued a cease-and-desist order against the illegal practices. At base, GQG required (some?) new hires and one former employee to sign agreements which would make it difficult for them to disclose wrongdoing on GQG’s part. “Whether through agreements or otherwise, firms cannot impose barriers to persons providing evidence about possible securities law violations to the SEC, as GQG did,” said Corey Schuster, Co-Chief of the Division of Enforcement’s Asset Management Unit.

As of 27 September 2024, GQG’s website did not reflect any discussion of the action. Reports in other media note that GQG “acknowledged the SEC’s jurisdiction in the case Continue reading →

Briefly Noted

By TheShadow

Updates

Tortoise Capital Advisors is merging three closed-end funds, with combined assets of over $300 million, into a single actively managed ETF. The current funds are Tortoise Power and Energy Infrastructure Fund (TPZ), Tortoise Pipeline & Energy Fund (TTP), and Tortoise Energy Independence Fund (NDP). They will be supplanted by the Tortoise Power and Energy Infrastructure ETF which will adopt TPZ’s strategy for its own. As a warning Continue reading →

Briefly Noted

By TheShadow

Updates

As of July 19, 2024, the Amplify High Income ETF went from passively tracking an index of the top 45 US closed-end funds to tracking the top 60.

Briefly Noted . . .

The US Securities and Exchange Commission reserves the right to study any proposed fund offering for 70 days before the adviser is permitted to offer the fund for sale to the public. During that time, (a) the SEC might require substantive or editorial changes to the fund’s prospectus and (b) the adviser is permitted to Continue reading →

Briefly Noted

By TheShadow

Updates

Effective June 3, 2024, David Baron and Michael Baron became Co-Presidents of Baron WealthBuilder Funds and of Baron Asset Management. Ron Baron remains Chairman, CEO, and Portfolio Manager.

On or about August 28, 2024, IQ Winslow Large Cap Growth ETF and IQ Winslow Focused Large Cap Growth ETF will change from semi-transparent active ETFs to fully transparent active ETFs which will publicly disclose all of its actual portfolio holdings on a daily basis. Continue reading →

Briefly Noted

By TheShadow

Updates

Morningstar expresses concerns with Akre Focus (AKREX).

On March 31, 2024, this portfolio had double-digit stakes in four different stocks … Such hefty positions aren’t the only concerns here, though. The transition from firm founder Chuck Akre to younger managers and analysts has been rocky, featuring several unexpected departures. The investment team currently consists only of manager John Neff and two research analysts.

There has been a serious problem with outflows from the fund, in almost a quarter since Mr. Akre formally separated himself from day-to-day management at the end of December, 2020. Firm assets Continue reading →

Briefly Noted

By TheShadow

Fidelity Investments is planning to charge a $100 servicing fee when placing buy orders on exchange-traded funds issued by nine firms. The new servicing charge, which may be imposed on ETFs issued by Simplify Asset Management, AXS Investments, Day Hagan, Sterling Capital, Cambiar, Regents Park, Rayliant, Adaptive, and Running Oak, is set to take effect on June 3. The new fee will apply to ETFs that do not participate in a maintenance arrangement with Fidelity.  Fidelity may update its “Surcharge-Eligible ETF” list again.    

Poster Rforno noted that Calamos Investments LLC announced the launch of 12 structured protection exchange-traded funds which seek to provide 100% protection and equity upside to a predetermined cap over one-year outcome periods (before fees and expenses). The ETFs are Continue reading →

Briefly Noted

By TheShadow

Updates

Beware of big promises! Several articles have been written recently about BOXX ETF. Alpha Architect 1-3 Month Box ETF which tries to outperform an ultra-cheap vanilla ETF by using an option swap strategy. In theory, the game will allow investors to pay the long-term capital gain rate on their games rather than the ordinary income rate.

Here’s the advisor’s description of their Continue reading →

Briefly Noted . . .

By TheShadow

Updates

Vanguard is introducing new and enhanced intergenerational wealth and legacy planning capabilities through a partnership with Vanilla, an innovative provider of digital estate planning tools and solutions. The offer was successfully piloted to a small group of eligible advised clients in Vanguard Personal Advisor Wealth Management over the past year and will Continue reading →

Briefly Noted…

By TheShadow

Updates

The merger of the BlackRock Capital Appreciation Fund into the BlackRock Large Cap Focus Growth Fund, originally scheduled to occur by the end of 2023, has been delayed.

Several iShare ETFs, iShares Expanded Tech Sector ETF, iShares Expanded Tech- Software Sector ETF, iShares U.S. Pharmaceuticals ETF, iShares U.S. Healthcare Providers ETF, iShares Core S&P Mid-Cap ETF, iShares U.S. Financial Services ETF, iShares U.S. Healthcare ETF, iShares U.S. Consumer Staples ETF, iShares U.S. Transportation ETF. and iShares Semiconductor ETF will undergo a stock split. Shares of Continue reading →

Briefly Noted…

By TheShadow

Updates

BenWP, a member of MFO’s discussion community, contributed that the Capital Group has several new equity and fixed-income ETFs.  One of the newest ETFs is the Capital Group Core Balanced ETF, an active multi-asset ETF. Some of the other active equity ETFs are the Capital Group International Equity ETF, Capital Group International Focus Equity ETF, Capital Group Dividend Growers ETF, Capital Group Dividend Value ETF, Capital Group Global Growth Equity ETF, Capital Group Core Equity ETF, and Capital Group Growth ETF. The Capital Group has several new fixed-income ETFs: Capital Group Core Bond ETF, Capital Group Core Plus Income ETF, Capital Group Short Duration Income ETF, and Capital Group U.S. Multi-Sector Income ETF. There are two municipal ETFs: Capital Group Municipal Income ETF and Continue reading →

Briefly Noted

By TheShadow

Updates

Matthews Asia has named Sean Taylor as its incoming chief investment officer, taking over from Robert Horrocks at the start of next year. Taylor was CIO for Asia Pacific and head of emerging markets at DWS and will assume his new role at Matthews on January 1, 2024. Mr. Horrocks, who has been with Matthews Asia since 2008, will retain his portfolio management responsibilities, which include Matthews Asia Dividend and Matthews Asian Growth & Income.

Matthews hired a new CIO, Cooper Abbott, in the summer of 2022. Since then, the firm has undergone Continue reading →

Briefly Noted . . .

By TheShadow

One of the two managers at Akre Focus (AKREX), Chris Cerrone, has resigned. Effective September 27, 2023, John Neff is listed as the sole manager of the consistently excellent, $13 billion large-growth fund. The fund has seen steady performance, but also steady outflows, since the retirement of founder Chuck Akre. Morningstar has placed the fund “under review,” which is certainly sensible and appropriate. That said, Mr. Neff has been co-managing the strategy since 2014. The portfolio holds fewer than 20 stocks, and the historic turnover ratio is 1%. The fund has trailed its large-growth peers on two occasions (2020 and 2023). In both cases, the market was narrow and frothy, and the fund produced entirely respectable absolute returns (20% and 10% YTD) for its investors. We do not believe that’s any immediate cause for concern.

Keith Long, co-founder Continue reading →

Briefly Noted . . .

By TheShadow

The AXS 1.25X NVDA Bear Daily ETF underwent a 1-5 reverse stock split on or about August 14.

The Champlain Strategic Focus Fund is in registration. The fund invests primarily in securities of mid- to large-capitalization companies. Annual fund expenses will be 1.10% for the advisor share class and 0.85% for the institutional share class. The fund will utilize several portfolio managers with Champlain Investment Partners, LLC.

The GMO U.S. Quality ETF is in registration.  Expenses have not Continue reading →

Briefly Noted . . .

By TheShadow

Updates

Our condolences to the family and friends of Robert B Bruce, co-portfolio manager of the Bruce Fund, who passed away on June 23. The Bruce Fund will continue to be managed by his son, R. Jeffrey Bruce. Morningstar rates the Bruce Fund four stars.

Stuart Rigby, one of the portfolio managers of the Grandeur Peak Emerging Markets Opportunities, Global Reach, and US Stalwarts Funds, has decided to Continue reading →

Briefly Noted…

By TheShadow

Updates

Fido’s conversion

Fidelity converted its “disruptive” funds to ETFs. They are Fidelity Disruptive Automation (FBOT), Fidelity Disruptive Communications (FDCF), Fidelity Disruptive Finance (FDFF), Fidelity Disruptive Medicine (FMED), and Fidelity Disruptive Technology (FDTX). As a group, they are not terribly compelling. They began trading this week. 

Next up: the Continue reading →

Briefly Noted . . .

By TheShadow

Jamie Cuellar, CFA, passed away unexpectedly and tragically on May 8. He was the co-portfolio manager of the Buffalo Small Cap Fund from 2015 and of the Buffalo Discovery Fund from April 2020. Our condolences to his family, friends, and co-workers.

Capital Group, parent of the American Funds and, with $2.6 trillion AUM, one of the world’s largest investment managers, has registered two exchange-traded funds, Capital Group Core Bond ETF and Capital Group Short Duration Municipal Income ETF. Management and operating expenses have not Continue reading →

Briefly Noted

By TheShadow

Updates

In a “less than meets the eye” kind of way, the headline is “ESG funds lose $5.2 billion in assets in 2023.” The story behind the story: the Republican temper tantrum had led to outflows from BlackRock, whose ESG Aware MSCI USA ETF alone dropped $6.4 billion. In a defensive reaction, BlackRock reduced the ESG allocation in its model portfolios, which Continue reading →

Briefly Noted…

By TheShadow

Updates

Vanguard launched its Short-Term Tax-Exempt Bond ETF on March 9th. The ETF will optimize tax efficiency for investors seeking to allocate to the shorter end of the municipal bond market. It predominantly invests in short-term investment grade municipal bonds and will track the S&P 0-7 Year National AMT-Free Municipal Bond Index. It has an expense ratio of Continue reading →