Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Both share classes, on September 30. It's a soft-close and it's one of several strategies for flow control that Mr. Foster had been noodling over.
Seafarer hit $1.5 billion, which was at the lower end of the possible-closure range, but flows into EM equities generally are picking up which might have made this seem the opportune moment.
"If you have purchased the Fund through an intermediary (e.g. a broker or a dealer), your eligibility to purchase the Fund based on the criteria listed above may be constrained by restrictions imposed by that intermediary. If such restrictions exist, the Fund may not be able to accommodate your purchase, even if you meet one of the criteria listed above."
Anybody know whether this will impact investors via TDAmeritrade?
Don't know re tdameritrade but no issue with fido (as far as I can tell). Anyone on mfo own this fund? I've been considering getting some em exposure into my portfolio. A worthy " give it a shot" fund to tread the waters with? Thanks in advance for any and all replies!
I wouldn't consider it a "give it a shot" fund. I have it as a core EM holding in my portfolio. Mr. Foster is extremely intelligent and I think the philosophy/process he has in place is second to none. If you are looking for EM exposure, I'd certainly put Seafarer near the top of the list. You don't have long to get that toehold (at least) position in.
Also, own Grandeur Peak's EM Opps (hard closed) in the EM space.
I'd concur with JoJo26 on both the Seafarer and Grandeur Peak funds and I too own both. Dr. Snowball has written quite frequently about Mr. Foster so if you go to the Commentary page and search for SFGIX or Andrew Foster I think you'll find plenty of valuable insights.
I'm also invested in Seafarer plus own Matthews Asia small companies (MSMLX). Can I ask what % of your portfolio you guys devote to emerging market equities and also a similar question for emerging market bonds? If you have a recommendation on funds for EM bonds I'd love to hear it. Thx
@MFO Members: For those of you who missed Chuck Jaffe's interview of Andrew Foster, on Auguat 25. 2016. Regards, Ted Scroll & Click On Download) http://moneylifeshow.com/highlights.asp
The Fund offers two classes of shares, an Investor Class and an Institutional Class, each of which is offered by this Prospectus. The minimum initial investment for the Investor Class is $2,500 for all accounts, except that the minimum initial investment is $1,000 for retirement and education savings accounts and $1,500 for automatic investment plan accounts. The minimum initial investment for the Institutional Class is $25,000 for all accounts. Investors generally may meet the minimum initial investment for the Institutional Class by aggregating multiple accounts within the Fund. If a shareholder invests in the Fund through a financial adviser or intermediary, the minimum initial investment for the Institutional Class may be met if that financial adviser or intermediary aggregates investments of multiple clients to meet the minimum. The minimum investment for subsequent purchases is $100 for both share classes.
Effective immediately after market closing on September 30, 2016, the Fund will close to most new investors. The Fund will be available for purchase only by the following investors:
· Existing shareholders of the Fund;
· Financial advisors, consultants and discretionary programs with existing clients in the Fund (i.e., they can continue to add new clients in the Fund);
· Retirement plans or platforms with participants who currently invest in the Fund;
· Model-based programs with existing accounts in the Fund; and
· Employees of Seafarer and their families.
Please note that some intermediaries may not be able to accommodate the conditions set out above.
If a shareholder closes an account in the Fund due to redemption or exchange, the shareholder will no longer be able to make additional investments in the Fund.
The Fund reserves the right to make exceptions to any action taken to close the Fund, or limit inflows into the Fund, and delegates such authority to Seafarer.
"If a shareholder closes an account in the Fund due to redemption or exchange, the shareholder will no longer be able to make additional investments in the Fund."
If I have two accounts in the fund (say an IRA and a taxable account) and I close the taxable account, I should still be able to add investments to the IRA - even though I was a shareholder who closed an account.
The more interesting question is whether I could take then a distribution in kind from that IRA and open up a new taxable account with those shares. Likewise, could I do a Roth conversion in kind, if I originally had no Seafarer Roth IRA?
These are not merely hypotheticals. I've gone through these exercises with Vanguard and with T. Rowe Price. At Vanguard, no new account means no new account, even for in-kind transfers. T. Rowe Price is happy to move shares around for you, even if it means opening new accounts for a closed fund.
I've even had problems (ultimately resolved) converting from investor shares to institutional shares in a third family's closed fund. Also relevant here, since Seafarer just dropped the min on its institutional class shares from $100K to $25K.
I've gone through these exercises with Vanguard and with T. Rowe Price. At Vanguard, no new account means no new account, even for in-kind transfers. T. Rowe Price is happy to move shares around for you, even if it means opening new accounts for a closed fund.
Thanks for the tip. I have PRWCX in my Traditional IRA at T.Rowe but not among my Roths. Guess I could convert just $1,000 (their minimum IRA account requirement) of PRWCX to a ROTH and than move as much other Roth money into it as I wanted? Heck, they might not even insist on $1,000.
At this time such move would be of little consequence. On the other hand, might be good to do it before they change their rules. From what I've read, there's no age limit for Roth conversions. Out of curiosity ... would a (taxable) conversion to Roth count towards one's RMD requirement? (suspect NO)
I have PRWCX in my Traditional IRA at T.Rowe but not among my Roths. Guess I could convert just $1,000 (their minimum IRA account requirement) of PRWCX to a ROTH and than move as much other Roth money into it as I wanted? Heck, they might not even insist on $1,000.
At this time such move would be of little consequence. On the other hand, might be good to do it before they change their rules. From what I've read, there's no age limit for Roth conversions. Out of curiosity ... would a (taxable) conversion to Roth count towards one's RMD requirement? (suspect NO)
As I recall, TRP didn't require the $1K, but I didn't want to abuse the privilege, so I did a "full" $1K conversion.
Regarding RMD
:
a) You are required to take your RMD before you do any conversion for the year (i.e. the first money out of the IRA is considered the RMD);
b) If you put RMD money into a Roth, it is considered a new contribution, not a conversion; so you need to have earned income, otherwise it is an excess contribution, heavily penalized.
@hank: I did that with PRWCX, converted from a trad IRA to a Roth after the fund closed. I held it with the fund directly.
Why would a taxable conversion to a Roth not count toward one's RMD? It would also count as a same-year contribution to the Roth, thus requiring earned income. Or am I missing something in your question?
I think I will call Seafarer, or better yet email, to have documentation, with the question of how the fund would handle a Roth conversion after closing. All the fund companies I have dealt with directly have allowed it.
What you're describing isn't a Roth conversion at all. It's a distribution (counting toward your RMD) and a separate contribution to a Roth. There's no connection whatsoever. Unlike a conversion, here you don't have to show that the Roth money came from a traditional IRA.
Often funds that close will say something about whether existing shareholders are allowed to open new accounts. For example, RPHYX prospectus:
Existing shareholders ... may purchase additional ... shares of the Fund through existing or new accounts ...
New T. Rowe Price IRAs in the fund may be opened only through a direct rollover from an employer-sponsored retirement plan. ...The fund reserves the right, when in the judgment of T. Rowe Price it is not adverse to the fund’s interests, to permit certain types of investors to open new accounts in the fund ...
So the ability to do a Roth conversion into a new Roth IRA account is at the discretion of T. Rowe Price. I've used both of the paths above (for another fund, not PWRCX) - a direct rollover from a 401(k), and a Roth conversion (at the discretion of TRP).
As you wrote, you'll have to ask Seafarer what its policy is.
I love that word - conflating - it always makes one sound so erudite. Ooooh, there's another one I like - "erudite". It always makes one sound so, uh.....I don't know, so.... erudite.
Comments
Seafarer hit $1.5 billion, which was at the lower end of the possible-closure range, but flows into EM equities generally are picking up which might have made this seem the opportune moment.
For what that's worth,
David
Anybody know whether this will impact investors via TDAmeritrade?
Also, own Grandeur Peak's EM Opps (hard closed) in the EM space.
Regards,
Ted
Scroll & Click On Download)
http://moneylifeshow.com/highlights.asp
https://www.sec.gov/Archives/edgar/data/915802/000139834416017861/fp0021369_497k.htm
Excerpt:
Purchase and Sale of Fund Shares
The Fund offers two classes of shares, an Investor Class and an Institutional Class, each of which is offered by this Prospectus. The minimum initial investment for the Investor Class is $2,500 for all accounts, except that the minimum initial investment is $1,000 for retirement and education savings accounts and $1,500 for automatic investment plan accounts. The minimum initial investment for the Institutional Class is $25,000 for all accounts. Investors generally may meet the minimum initial investment for the Institutional Class by aggregating multiple accounts within the Fund. If a shareholder invests in the Fund through a financial adviser or intermediary, the minimum initial investment for the Institutional Class may be met if that financial adviser or intermediary aggregates investments of multiple clients to meet the minimum. The minimum investment for subsequent purchases is $100 for both share classes.
Effective immediately after market closing on September 30, 2016, the Fund will close to most new investors. The Fund will be available for purchase only by the following investors:
· Existing shareholders of the Fund;
· Financial advisors, consultants and discretionary programs with existing clients in the Fund (i.e., they can continue to add new clients in the Fund);
· Retirement plans or platforms with participants who currently invest in the Fund;
· Model-based programs with existing accounts in the Fund; and
· Employees of Seafarer and their families.
Please note that some intermediaries may not be able to accommodate the conditions set out above.
If a shareholder closes an account in the Fund due to redemption or exchange, the shareholder will no longer be able to make additional investments in the Fund.
The Fund reserves the right to make exceptions to any action taken to close the Fund, or limit inflows into the Fund, and delegates such authority to Seafarer.
If I have two accounts in the fund (say an IRA and a taxable account) and I close the taxable account, I should still be able to add investments to the IRA - even though I was a shareholder who closed an account.
The more interesting question is whether I could take then a distribution in kind from that IRA and open up a new taxable account with those shares. Likewise, could I do a Roth conversion in kind, if I originally had no Seafarer Roth IRA?
These are not merely hypotheticals. I've gone through these exercises with Vanguard and with T. Rowe Price. At Vanguard, no new account means no new account, even for in-kind transfers. T. Rowe Price is happy to move shares around for you, even if it means opening new accounts for a closed fund.
I've even had problems (ultimately resolved) converting from investor shares to institutional shares in a third family's closed fund. Also relevant here, since Seafarer just dropped the min on its institutional class shares from $100K to $25K.
At this time such move would be of little consequence. On the other hand, might be good to do it before they change their rules. From what I've read, there's no age limit for Roth conversions. Out of curiosity ... would a (taxable) conversion to Roth count towards one's RMD requirement? (suspect NO)
Regarding RMD
a) You are required to take your RMD before you do any conversion for the year (i.e. the first money out of the IRA is considered the RMD);
b) If you put RMD money into a Roth, it is considered a new contribution, not a conversion; so you need to have earned income, otherwise it is an excess contribution, heavily penalized.
Why would a taxable conversion to a Roth not count toward one's RMD? It would also count as a same-year contribution to the Roth, thus requiring earned income. Or am I missing something in your question?
I think I will call Seafarer, or better yet email, to have documentation, with the question of how the fund would handle a Roth conversion after closing. All the fund companies I have dealt with directly have allowed it.
Often funds that close will say something about whether existing shareholders are allowed to open new accounts. For example, RPHYX prospectus: In contrast, PRWCX's prospectus says: So the ability to do a Roth conversion into a new Roth IRA account is at the discretion of T. Rowe Price. I've used both of the paths above (for another fund, not PWRCX) - a direct rollover from a 401(k), and a Roth conversion (at the discretion of TRP).
As you wrote, you'll have to ask Seafarer what its policy is.