Charles November 2014 in Fund Discussions
GTAA ETF to be dissolved at AdvisorShares, Cambria plans relaunch of strategy as GMOM ETF
Honestly, think this is good news...
Letter yesterday:
Cambria Investment Management, LP and AdvisorShares issued notice today that the two parties plan on separating, and Cambria will move on from sub-advising the Cambria Global Tactical EtF (GTAA) pending board and shareholder approval.
Cambria, as a fiduciary, is committed to offering the best possible investment portfolios to our investors. Cambria will be launching the successor to GTAA, the Cambria Global Momentum EtF (GMOM), at a management fee of 0.59% in the coming months. GMOM is currently subject to an effective registration statement, and we are finalizing the terms of the listing with the NYSE and the SEC.
Cambria has been managing global tactical portfolios since 2007, and together with GMOM we will continue to manage these strategies in separate accounts and private funds.
Cambria has launched three EtFs under our own sponsorship, including the Cambria Shareholder Yield EtF (SYLD), the Cambria Foreign Shareholder Yield EtF (FYLD), and the Cambria Global Value EtF (GVAL).

@scott,
a quick review of PIRMX seems to reveal poor performance verses a blended 50/50 mix of "VGSIX / TIP" and barely out paced "TIP only" over its short existence.

Isn't that sort of what Pimco's Inflation Response Multi-Asset fund does?

Cool...have to familiarize myself with the fund. Thanks.
Some REIT articles:
will-rising-rates-hurt-reit-performance
REIT Correlations
White Paper Interest Rates & REITs
REIT-Stocks-An-Underutilized-Portfolio-Diversifier_Fidelity
rickferri reits-and-your-portfolio
The Impact Of Interest Rates On Real Estate Investment Trusts

Believe it or not, ARIVX remains a top quintile performer, life time.
Basically, it had a strong first year in 2011. But it's spent time in the barrel ever since.
The hefty 1.47%, which goes to pay RiverRoad, Aston, and now AMG among others, while holding nearly 80% in zero interest cash remains a drag.
The on-going bull market is casting a lot of defensive money manager in tough light. Mr. Cinnamond is in good company, if that helps any.
Numbers through November...

It appears from a recent discussion by Charles and other websites that GMOM had a mgmt fee of .59 addition in addition to the acquired funds fee of .35, which would be total of .94. It now has apparently eliminated the .59 and the acquired funds fee has been reduced. Do you think the elimination of the mgmt fee of .59 is a temporary event to build fund assets?
I presume the acquired funds fee has changed because they have changed some holdings.

VGSIX quietly had a stellar year (up 30%). It has annualized a 8.4% return over the last 10 years. It was out paced by US Small Cap and US Mid Cap sectors by just 1 % over the last decade. US Mid caps exhibited the lowest volatility of the three. Its the volatility that I wanted to address with this thread that ultimately might lead to help creating an inflation beating portfolio.
Volatility has been one the REIT sector's Achilles heal. I am trying to pair other investments that provides a blended performance that helps lowers year to year volatility. Over the last decade TIPs would have been one pairing option. Going forward their will be more and more investor focus on their attempts to stay ahead of inflation. I believe the two sectors (REITs and TIPs) paired together will provide a better inflation beating performance than owning just TIPs alone.
Here's how the last decade looked.
Three portfolios:
100% VGSIX (Blue Line)
100% TIP (Yellow Line)
A combination of the two, 50% VGSIX & 50% TIP (Orange Line)

I'm still hanging on to ARIVX --- who am I to second guess Cinnamond (or his proteges at ICMAX - both about 75% cash)? At least not yet.
Regarding PVFIX (Pinnacle Value) I think that part of its performance has been helped by being so micro-cap oriented. The geometric av. market cap for Pinnacle is only $250m. (ARTVX is $1174 and ARIVX is $1181).
For reference, the micro cap ETF IWC has a market cap of $403 and , one of my favorites, WEMMX (Teton Westwood Mighty Mites AAA) is $483.

Aren't these 58% thieves who are taking money under false pretenses by their own admissions?

Yes but some will attempt to guess the next hot sector by over investing in it. They will probably be wrong as well.

I think therein lies the problem with Callan Table. It's something of an apples to oranges comparison with asset classes that have varying expected returns over lengthy periods of time. It looks like noise close up, but fades into banded probabilities through time.
If you're trying to guess whether small cap frontier market growth equities are going to outperform the Barclay's in 2015, that's anyone's guess. Over time, however...

FYI: I make investment changes at a glacial speed. The last change was about five years ago when I combined micro-cap stocks with small-cap value stocks to reduce the number of funds in the portfolio. Before that, I eliminated a preferred stock allocation, which was fortunately done right before the financial crisis. Over the coming year, I believe the opportunity may present itself for another change.
Currently, 70% of my stock allocation is in US equity and 100% of my bond allocation is in US bonds. Sometime in 2015, I may shift my portfolio to a more global stock and bond allocation
Regards,
Ted
http://www.rickferri.com/blog/investments/my-expected-investment-changes-in-2015/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+RickFerri+(Rick+Ferri+Blog)

@johnN: Happy New Year !
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/18055/fund-focus-payden-emerging-markets-bond-fund#latest

FYI: A Few Investment Lessons From Last Year’s Market
Regards,
Ted
http://www.wsj.com/articles/will-funds-outperform-in-2015-1420333696

Hi Guys,
http://awealthofcommonsense.com/
I too consider this chart one of my favorites. It presents extremely broad asset class returns over a 10-year period.
The chart once again illustrates the random nature, the patternless character, the ramblings of the various major asset classes over the last decade. Good luck on consistently picking these winners ahead of time.
This is a big reason why active mutual fund managers have such a challenging task to outdistance an appropriate benchmark. It adds another dimension to investment risk. Forecasters can’t forecast with any reliability. It’s that reason plus the additional handicap of higher expenses in several directions that dampen active mutual fund returns. There’s an easy lesson here.
Please give the chart a little time. It’s worth the effort, and just might contribute to a more profitable 2015. I hope so. Good luck and good health to all.
Best Regards.

Great chart. Now that sets up a challenge for everyone. Rearrange the blocks for 2015. Commodities are down 45% last 4 years, but I am loathe to pick them above water. I like aggregate bonds over 5%.

Below is the market cap breakdown, per M*, of the Vanguard Global Minimum Volatility Fund, VMVFX.
When the fund was announced, I think that I expected to see it filled with solid staid large cap value/blend holdings, similar to the equity sleeves of VG Wellington or Wellesley funds.
That's not what is there. Check out link, below.
In terms of capitalization at least, it is much more diverse, and less market hugging than I initially expected.
Do folks out there find the makeup of the portfolio surprising, and/or do they have any comments regarding the composition of the fund, etc?
Aside: What other fund looks like this?
Also: Check out specific holdings: http://portfolios.morningstar.com/fund/holdings?t=VMVFX
Thanks.
=================================================================
VMVFX Market Capitalization
Size..........% Fund............Bmark.......Category Avg
Giant........25.03..............51.47..........57.18
Large........20.04..............34.86..........18.49
Medium....36.73..............13.56..........18.14
Small........14.74............... 0.11.......... 5.26
Micro........ 3.45................ 0.01.......... 0.93
US Stock: 45%
Non US Stock: 55%
Avg Mkt Cap: $8.9B
-----------------------------------------
BMark: MSCI ACWI
Category: World Stock/Large Blend
M* LINK: http://portfolios.morningstar.com/fund/summary?t=VMVFX

"As for investment professionals themselves, the number was even lower, with only 42 per cent attributing outperformance to superior skill"
My suggestion is to deal with these 42% of managers, the other 58% are losers, and we get quotes from them about their (no) skills....really?
Buffett is Charlie Munger

Here's a couple more:
Part 1:
investing.com/analysis/2015-market-outlook
Part 2:
investing.com/analysis/market-outlook-2015 contrarian-perspectives

Hi Guys,
Here’s a quote from a recent survey of mutual fund investors: It said that “…. only 53 per cent of individual investors believed that outperformance was based on skill rather than luck. As for investment professionals themselves, the number was even lower, with only 42 per cent attributing outperformance to superior skill.”
Wow! Investment professionals do not believe in themselves in about 58 % of the instances. If an industry doesn’t trust its own proficiency, it is doom to failure in the long term. But, the same article that contained the referenced quote also offers some saving possibilities.
An indirect reference was made to this reporting in an earlier MFO post. The title of the piece is “Investment: Loser’s Game” by John Authers. Here is the Link to the Financial Times article:
http://www.ft.com/cms/s/0/f15a1f9c-876c-11e4-8c91-00144feabdc0.html
The 6 minute video that is embedded in the article provides an excellent summary if you are not now inclined to read the work.
Basically, the article reviews the recent dismal annual performance of active mutual fund management and their coupled lack of persistency. These are not new findings and need not be repeated for MFO Discussion members.
However, the article does offer 3 ways in which a performance reversal can be possibly accomplished, and with it, a directional money flow change back into actively managed funds.
The three pathways are: (1) Become more actively focused away from benchmark holdings (more concentration), (2) A reduced money management and cost fee structure, and (3) Enrollment in a money management training program directed at removing behavioral biases that compromise money management performance (like overconfidence).
The first two of these elements have been recognized for quite awhile; I was not familiar with the training program opportunity. More power to it, especially if it translates to better returns for us average mutual fund buyers.
The fees burden is obvious and demands attention. Even Charlie Munger attacked it decades ago. I’m currently reading “The Best of Charlie Munger, 1994-2013”. It is fun reading with great practical wisdom. You might want to give it a try. Here is one sample story.
In a talk that Munger gave to a Philanthropy Round Table in November, 2000, his true feelings towards the investment advisor cohort in general is harshly revealed. He doesn’t think much of that group.
Munger likes to invent words. He invented one for the investment advisors; it is “febezzle”. The “fe” portion acknowledges the high fees charged by the investment fraternity. The “bezzle” portion is a shortened form of embezzlement. Munger’s overarching assessment is that these financial wizards are mostly frauds and do not add to an investor’s wealth.
He did pontificate that these advisors and their clients did increase overall National spending. The advisors made and spent money directly from clients, and the customers were encouraged to spend more believing that they were making more market money. This hidden action increased our total economic pot in a Keynesian spending multiplier manner. According to Keynes, money need not be spent efficiently to enhance our National wealth.
I’m not sure I buy into that deep logic. Regardless……
Best Regards.

Thanks for the list. I was aware of VTMFX, but in general it seems very difficult to find hybrid funds that use munis as their bond sleeve.
From the list I discovered that AllanceBernstein has a whole family of these funds - ACIYX (40/60 stock/bond), AGIYX (50/50) - the fund mentioned in the list, and ATWYX (73% equity, rest "diversifiers" - a world fund). I've inferred the target allocations from their current holdings, except for the last, which comes from the prospectus.
Not recommending any of these - just hadn't heard of them before. Tickers are for the Advisor (noload/lowest ER) share class of these funds.

Tax managed funds often split munis with the S&P 500 and have exhibited low volatility and decent returns with tax efficiency.
VTMFX and USBLX are two I follow.
Here's a list of ten (BBTEX seems impressive from this list, but no muni exposure):
top-10-tax-managed-funds