Category Archives: Mutual Fund Commentary

In conversation with Andrew Foster @ Seafarer Funds (SIGIX & SIVLX) : On Emerging Markets

By Devesh Shah

Introduction: Trouble in the Emerging Market Equities asset class

Emerging Market Equities (EM Eq), as tracked by the iShares MSCI Emerging Market ETF, are up almost 10% this year. That would generally be welcome news for the ignored asset class. But the news is not good enough. I have the distinct sense that investors of multiple stripes are “giving up” on EM Eq. There isn’t a wholesale liquidation as much as the flow of money in EM has slowed down. The long-held conviction that EM Eq is an asset class where one has to be involved has now Continue reading →

Catching Up with Amit Wadhwaney @ The Moerus Worldwide Value Fund

By Devesh Shah

Our profile of Moerus Worldwide Value ended with the note, “Moerus offers a rare and intriguing opportunity to invest alongside (in another of legendary value investor Marty. Whitman’s phrases) a distinguished ‘aggressive conservative investor.’” In the years since that profile first appeared, Moerus has posted top tier returns for the past one-, three- and five-year periods. After rising 6.4% last year (2022), the fund is up another 20.6% through July 30, 2023 which about doubles the returns Continue reading →

Launch Alert: RiverPark Next Century Growth Fund

By David Snowball

On June 30, 2023, RiverPark Funds launched the RiverPark/Next Century Growth Fund (RPNCX/RPNIX) in collaboration with Next Century Growth Investors, LLC. The Fund’s stated objective is to seek long-term capital appreciation by investing primarily in small-capitalization U.S. equity securities.  NCG was founded in 1998, is headquartered a bit northwest of the Twin Cities in Plymouth, Minnesota, and manages $1 billion in assets. About 40% of those assets are 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 →

Battle of the Titans for Portfolio Management – Fidelity vs Vanguard

By Charles Lynn Bolin

Asset Manager Titans Fidelity and Vanguard have options for portfolio management that vary allocations across asset classes over time which include assessments of long-term market trends. Fidelity has the Business Cycle Approach while Vanguard has the time-varying-asset approach based on the Vanguard Capital Markets Model (VCMM). In this article, I briefly describe Continue reading →

Fire-and-Forget Gone Wrong: The Rise of GoodHaven Fund

By David Snowball

In the military realm, “fire and forget” designates a weapon that you don’t need to think about once it’s been launched. In investing, “fire and forget” could be used to describe several sorts of mistakes centering on our impulse to look away once we’ve made a decision. One of those mistakes is to buy a fund (presumably for a good reason) then sell it (presumably for a good reason) and then never re-examine your decision.

Managers – both corporate and fund – make Continue reading →

Is Bigger Better?

By Charles Lynn Bolin

I have often heard that smaller funds are able to outperform larger ones because they can be nimbler. This article started as a search for the best performing “core” funds over the past fifteen years, but I started over several times as I challenged my own search criteria to select only large funds. My assumption was that success builds upon success and investors invest more in funds that are doing 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 →

June 1, 2023

By David Snowball

Dear friends,

Welcome to summer.

Had I mentioned that I have the coolest job in the world? I love a challenge. Augustana offers them to me at the rate of sixty a week, approximately the number of students I work with. They often leave me stunned.

(See how important punctuation is? “They often leave me stunned” and “they often leave me, stunned” are two very different observations. Hmmm … both might be accurate, now that I think of it.)

My college started in 1860 with a very humble mission: it wanted to help the children of immigrants build a good Continue reading →

Modest protection from runaway inflation

By Devesh Shah

Introduction

Warren Buffet has a long history of sharing sharp, colorful reflections on inflation and its role in controlling your profits.

Before we drown in a sea of self-congratulation, a further – and crucial – observation must be made. A few years ago, a business whose per-share net worth compounded at 20% annually would have guaranteed its owners a highly successful real investment return. Now such an outcome seems less certain. For the inflation rate, coupled with individual tax rates, will be the ultimate determinant as to whether our internal operating performance produces successful investment results – i.e., a reasonable gain in purchasing power from funds committed – for you as shareholders.

That combination – the inflation rate plus Continue reading →

Helping a Friend Get Started with Financial Planning

By Charles Lynn Bolin

A close friend, who I will call Carol for this article, wanted to meet to discuss whether she should get a Financial Planner. Here is her situation and what she is interested in learning:

Carol and her husband were good savers and earned pensions and Social Security. He passed away a couple of years ago after a prolonged illness. Their focus had been on healthcare needs and not on financial planning. She also received an inheritance from her parents. Carol explained that she had savings scattered at multiple banks in savings accounts, Inherited IRAs, Traditional IRAs, and Roth IRAs. She had questions about why she should invest when her living expenses were met Continue reading →

A Dinner and Walk with David Sherman, fund manager of Crossing Bridge Funds.

By Devesh Shah

Last week I had the opportunity to sit down for dinner with one of our own, the legendary David Sherman. He is no stranger to regular readers of MFO. His funds, public and private funds through Cohanzick and CrossingBridge and the RiverPark Short Term High Yield Fund, for which he’s the sub-adviser, are uniformly first rate. He’s articulated four investing principles that are embodied in each of his portfolios: Continue reading →

Recession Watch

By Charles Lynn Bolin

The Chronology of the Economic Cycle provided by Joseph Ellis in Ahead of the Curve is an interesting chart that shows the ripple effect from left to right of inflation and interest rate increases across the economy over the next six to twenty-seven months. In Figure #1, I added my subjective assessment of whether the indicator level is currently positive (blue +) or negative (red -) for the Investment Environment and the direction of change, whether it is improving (red up arrow) or softening (red down arrow). Most of the indicators are softening, but not at a level to be considered negative (contracting) for the Continue reading →

Taylor the Investor: You belong with me!

By David Snowball

Taylor Swift might be the swiftest young investor of her generation. Ms. Swift, 33, saw her net worth creep up over the past year, from $570 million at the beginning of 2022 to $740 million now. Most of that wealth is driven by the feverish desire of her fans, the 120,000,000 or so Swifties, to transfer their money to her. At the same time, she’s done prudent and profitable things with her wealth. Other young investors can learn from her reasoning and parallel her strategy.

(Well, give or take the “multi-platinum pop Continue reading →

The Young Investor’s Secret Weapon: The HSA

By Mark Freeland

Many things in life suck. High on anyone’s list would be:

  1. Health insurance costs
  2. Taxes
  3. Being poor
  4. Ketchup-flavored Doritos. (And you know some mad scientist will have, like, mayo-flavored ice cream in the pipeline next.)

When it comes to Frankenfood, you’re on your own, but there’s major good news about the other three. It’s called a Continue reading →

Leuthold Core Investment (LCORX/LCRIX), June 2023

By David Snowball

Objective and strategy

Leuthold Core pursues capital appreciation and income through the use of tactical asset allocation. The objective is to avoid significant loss of capital and deliver positive absolute returns while assuming lower risk exposure and lower relative volatility than the S&P 500. Assets are allocated among stocks and ADRs, corporate and government bonds, REITs, commodities, an equity hedge, and cash. Portfolio asset class weightings change as conditions do; exposure is driven by models that determine each asset class’s relative and absolute attractiveness. Equity and fixed-income exposure each range 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 →

May 1, 2023

By David Snowball

Dear friends,

A Tale of Two Cities

Nominally Chip and I reside in the Quad Cities, whose t-shirts describe them as “twice as nice as the Twin Cities.” It’s a lovely and surprisingly diverse urban area with about 450,000 people and an agglomeration of two dozen small cities and towns. Half of us reside in Illinois, just south of the Mississippi River, and half in Iowa, on the river’s north bank.

The Mississippi River actually flows from east to west here. Recently, though, it has been flowing east, west, north, south, and, more than occasionally, up. As I write, the Mississippi is cresting at 22′, about five feet above the level at which we declare a major flood. People in Davenport take notice. That’s one Continue reading →

Looking Beyond the Next Recession

By Charles Lynn Bolin

The Federal Open Market Committee minutes from March state that the staff’s projection “included a mild recession starting later this year, with a recovery over the subsequent two years”. Participants “generally expected real GDP to grow this year at a pace well below its long-run trend rate.” In addition, the Conference Board forecasts “that economic weakness will intensify and spread more widely throughout the US economy over the coming months, leading to a recession starting in mid-2023”.

With a high probability of recession and a high return on short-term cash, Continue reading →