David. Scratching my head trying to find the attraction in Amanda Developing World AMDWX, highlighted again in MFO this month. AMDWX continues to underperform the benchmark, as well as WGRNX, FMIJX, and even SIGIX - all of these you have also featured. Here's performance comparison:
I recognize the fund has a large cash holding. But I do think the fund manager decides the appropriate allocation, making him or her accountable for the fund performance as a whole. That said, AMDWX trails even a solid fixed income fund, like DODIX.
Comments
A couple things come into play. One is that Mr. Kaiser has years and years of successful investing, and so bears watching. We talked at length, and he argued that the quality of the investment opportunities were too low for his taste; often speculative issues in poorly-regulated markets. He believes that after the recent pounding, opportunities are presenting themselves. And, so far as I can calculate, the stock's he is picking - generally a pretty conservative bunch - are keeping up with the market. The other is that I'm trying to establish a regular pattern for updating the profiles, with a major revision each year unless events dictate otherwise. It was AMDWX's turn. (Also OSTVX's but I ran short on time so they're coming in June.)
I'm sympathetic to your observations. I tried to be honest about AMDWX's performance lag and at the same time humble enough to recognize that I shouldn't dismiss a really talented manager too lightly. Lots of value guys look incredibly stupid (you can hardly imagine the abuse heap on Bill Nygren and Warren Buffett) right before they look incredibly smart.
Not a perfect answer, but an honest one.
As ever,
David
First of all, I want to thank you once again for all of your hard work and dedication which has made this a fantastic web site for all investors, both new and seasoned.
After reading your review of AMDWX, I would like to request that you write my obituary upon my passing, which will be my final "death cross" for the TA followers out there. Unfortunately, my dear wife of 25 years will read it and figure you are writing about somebody else ;-).
The managers of AMDWX have had two serious opportunities to deploy cash into EM equities after corrections -- May 2010 and September 2011 -- but apparently these corrections were not enough. I continue to wonder how much of a correction in EM equities will it take for the managers to become nearly fully invested like they are in their Amana Trust Growth (AMAGX, 8% cash) ?
In evaluating funds, I basically rate them as buy, hold, sell, or watch. After studying this fund, AMDWX would definitely merit nothing more than a "watch."
More worthy funds in the EM equity space include: ECON, DEM, ABEMX, PEFIX, and the EM balanced CEF, FEO, which both Kenster and I like.
Kevin
Wintergreen isn't an EM fund, but one of its main themes in the last couple of years has been the EM consumer.
"Watch" is great. I don't make "buy" recommendations, ever. There are some fund which I believe particular sorts of investors should investigate more or less vigorously, and a few which seem plausible but which worry me.
I have, by the way, profiled FEO. The only closed-end fund I've yet written about and an entirely admirable e.m. balanced entry.
As ever,
David