Category Archives: Mutual Fund Commentary

Building a Multi-Strategy Portfolio – Vanguard Traditional IRA

By Charles Lynn Bolin

I divide my investing strategy into the low cost, buy and hold philosophy following that of Vanguard, and its founder, John Bogle, along with Charles Ellis, and the more active business cycle approach of Fidelity, Benjamin Graham, Howard Marks, and Ed Easterling, with a touch of trend following from Gregory L. Morris using a risk-managed approach of Mutual Fund Observer, the bucket approach of Morningstar, and the tax strategy that I learned late in life. Whew! This article Continue reading →

Red flags over China

By David Snowball

There is an ongoing debate about whether Chinese President Xi’s economic reforms fundamentally threaten the investment case for China (and, by extension, for the emerging markets universe which China dominates). The Economist warns that “China’s new reality is rife with danger” (10/2/2021):

His campaign is remarkable for its scope and ambition. It started to rumble in 2020, when officials blocked the initial public offering of Continue reading →

Briefly Noted

By David Snowball

Updates

The Ivy Fund liquidations announced in September 2021 and October 2021 have been temporarily suspended. No word on why or when the executions will proceed.

Briefly Noted . . .

The Cook & Bynum Fund modified their prospectus to flag a new risk factor, one that’s likely unprecedented in the industry: Risk of Current Focus on Breweries and Soft Drink Bottling and Distribution. The adviser allows that they hold “from time to time, a Continue reading →

October 1, 2021

By David Snowball

Dear friends,

Welcome to autumn. Or, at least, our current attempt at autumn. Temperatures here in Iowa remain in the 80s and there’s only the barest hint of typical autumnal weather: a bit cooler nights, pumpkins studding the fields, the steady flow of apples out of the orchards, and bits of color emerging on the maples.

And, speaking of pumpkins it’s time to celebrate  … Continue reading →

Time to take out the trash: 25 huge funds with serious questions

By David Snowball

It is unfair and irrational to judge a fund solely on its total returns, much less on whether it has managed to “beat the market” lately. The former concern ignores a long series of important questions, the most important of which is “how much risk does the strategy expose you to in exchange for those returns?” Many would argue that receiving 20% of the market’s gains is great if you bear only 10% of its risk, and that’s what you signed up for in the first place.

The latter concern is simply lunatic. Rational people do not invest with the goal of beating the market. Rational people invest with the goal of ending up with resources that match or exceed their needs. If you beat the market ten years straight and your resources are less than your needs, you have lost. If you trail the market ten years straight and your resources exceed your needs, you have won. Continue reading →

Comparing Fidelity Strategic and Multi-Asset Income Funds (FADMX, FMSDX, FSRRX)

By Charles Lynn Bolin

This article takes a closer look at Fidelity Advisor Multi-Asset Income (FMSDX/FAYZX), Fidelity Strategic Real Return (FSRRX), and Fidelity Advisor Strategic Income (FADMX/FSIAX) which I have identified in previous articles as funds with high risk-adjusted-performance. They are managed by Adam Kramer, Ford O’Neil, and a strong team of co-managers.

This article continues the theme from the long-term trends identified in Retrospection Is a Hard Metric to Match. Recently Lance Roberts wrote Deficit Deniers & 40-Years of Economic Erosion covering the same 40 year period but emphasizes Continue reading →

Launch Alert: CrossingBridge Pre-Merger SPAC ETF

By David Snowball

On September 17, 2021, CrossingBridge Advisors, LLC, launched their actively managed Pre-Merger SPAC ETF (SPC). CrossingBridge, primarily an institutional/high net worth advisor located in Pleasantville, New York, has approximately $970 million in assets under management and is responsible for the CrossingBridge Low Duration High Yield, CrossingBridge Ultra-Short Duration, and the CrossingBridge Responsible Credit funds.

While the buzz surrounding SPACs is that they are a high-risk, get-rich-quick scheme, the CrossingBridge fund is Continue reading →

Briefly Noted…

By David Snowball

Updates

And the beat goes on. Five more mutual funds are becoming ETFs. On October 22, 2021, the Adaptive Fundamental Growth Fund, Adaptive Hedged High Income Fund, Adaptive Hedged Multi-Asset Income Fund, Adaptive Tactical Outlook Fund, and Adaptive Tactical Rotation Fund will be converted into the AI Quality Growth ETF, Adaptive High Income ETF, RH Hedged Multi-Asset Income ETF, RH Tactical Outlook ETF, and RH Tactical Rotation ETF, respectively. While the names and structure change, the investment strategies do not.

DFA is dancing to that very beat. Two more active DFA mutual funds have converted to ETFs: Dimensional International value ETF (DIV) and Dimensional DFA World ex US Core Equity 2 ETF (DFAX). That brings the DFA tally to Continue reading →

September 1, 2021

By David Snowball

Dear friends,

It’s fall! We’re back! And we hope you are, too.

Well, it’s “meteorological fall” anyway. “Astronomical fall” (or is it “anatomical fall”? I can’t recall) holds off until September 22. With two classrooms full of students (one studying Propaganda with me, the other Advertising and Consumer Culture), my brain assures Continue reading →

The Catastrophe Portfolio

By Charles Lynn Bolin

What if you had to build a portfolio now and could not change it for the next five years other than annual rebalancing? The most obvious real-life situation might be preparing in case a spouse who does not know much about investing needs to manage finances; hence the name, “Catastrophe Portfolio”. A different scenario is the Rip Van Winkle scenario where you fall asleep for five to ten years and wake up to see what your portfolio is worth. And of course, there is the K.I.S.S philosophy. 

The obvious question would be, “Why not use an investment advisor and/or an independent financial planner?” I have talked with Continue reading →

Launch Alert: Virtus KAR Small-Mid Cap Value

By David Snowball

On August 3, 2021, Virtus Partners launched their latest collaboration with Kayne, Anderson, Rudnick (KAR), Virtus KAR Small-Mid Cap Value. The fund is managed by the KAR of the title: Kayne, Anderson Rudnick Investment Management, Virtus’s largest wholly-owned subsidiary. KAR, based in Los Angeles, manages rather more than $17 billion in assets.

Across all of their portfolios, KAR emphasizes Continue reading →

Briefly Noted

By David Snowball

Updates

Effective immediately, Neuberger Berman Commodity Strategy Fund‘s investment strategy will permit the fund to invest up to 5% of its assets in cryptocurrency investments through bitcoin futures and investments in the securities of exchange-traded funds organized and listed for trading in Canada to gain indirect exposure to bitcoin.

WisdomTree Cloud Computing Fund, an active ETF, now solemnly swears not to invest in … you know, weapons systems, coal, or tobacco. In short, it’s declared itself to be Continue reading →

August 1, 2021

By David Snowball

Dear friends,

As we announced in June, the Observer is on hiatus for the month of August.

Hmmm … you know, it’s gone fishin’.

Disconnected.

Chillaxin’.

This is my first scheduled break from publishing in 25 years, and Chip’s first in nearly a decade. We took the opportunity for our first out-of-town trip – back to Chip’s native state of New York – in 18 months. We celebrated the marriage of Chip’s son David (in the company of her father, David) on the 17th and spent a bit of time with her Continue reading →

Launch Alert: T. Rowe Price Retirement Blend Funds

By David Snowball

On July 28, 2021, T. Rowe Price launched its fourth set of target-date funds, the Retirement Blend Series. The Retirement Blend strategy has been in operation since 2018 but has been available only through collective investment trusts. The new fund series complements the existing Retirement and Target Series (as well as the Retirement Hybrid series that’s available only through a collective investment trust). All four series invest, primarily, in other T. Rowe Price funds. Retirement and Target invest, primarily but not Continue reading →

Retrospection is a Hard Metric to Match

By Charles Lynn Bolin

I turned 66 last week and bought a retirement home in Colorado last month. By most measures, I am prepared for retirement with pensions, social security, and savings. I continue to work for several reasons including the uncertainties of markets facing seismic shifts. In the 50 years since I was in high school, so much has changed, both good and bad. These secular trends that have occurred in my life have significance for young and old investors. As Bear Bryant said, “Offense sells tickets, but defense wins championships.”

In Section #1 I look at seven long term trends that will Continue reading →

July 1, 2021

By David Snowball

Welcome to July, dear friends.

It’s summertime, 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, some joke about “going topless at the beach” which translates to leaving their masks at home, 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 recharge and it’ll be great!” About the first thing we notice when summer does arrive, is that summer is almost Continue reading →

Uncorrelated Funds for Building a Low Risk Portfolio

By Charles Lynn Bolin

Correlation measures the relationship between two assets such as stocks and bonds and has a value of +1.0 for two assets that are perfectly correlated and -1.0 for two assets that move in the opposite direction. The most common example of correlation is that the S&P 500 has a correlation of about zero to US Bonds. The balanced 60 stock and 40 bond portfolio is familiar to investors as a way of building a portfolio of these two uncorrelated assets. In this article, I search for Continue reading →

Launch Alert: First Eagle Small Cap Opportunity Fund

By David Snowball

On July 1, 2021, First Eagle Investment Management launched the First Eagle Small Cap Opportunity Fund (FESAX / FESCX / FESRX). The investable universe is primarily domestic small- and micro-cap value stocks. In general, they’ll own 180 – 300 of them.

The fund pursues an opportunistic small-cap value strategy, investing in companies that the portfolio management team believes to be attractively valued and have the potential to benefit from a catalyst—such as new management, a more favorable business cycle, product innovation and/or margin improvement—for a recovery in earnings growth. Small caps are very sensitive to asset flows and even small changes in underlying economic conditions, as a result, Continue reading →

Launch Alert: AMG Yacktman Global

By David Snowball

On July 1, 2021, AMG Funds and Yacktman Asset Management launched the AMG Yacktman Global Fund (YFSNX).

Sort of.

In reality, Yacktman chose to dump the least attractive name in their stable – AMG Yacktman Focused Fund – Security Selection Only – in favor of the simple “Global” moniker. Yacktman manages two of the most outstanding funds in excellent: Yacktman (five stars, Silver-rated, Great Owl, multi-million dollar investment by the lead managers, top 2% returns over 15 years) and Yacktman Focused (five stars, Silver-rated, Great Owl, multi-million dollar investment by the lead managers, top 1% returns over 15 years). Yacktman Global uses the exact same security selection process Continue reading →