GuideMark Emerging Market fund (GMLVX), a Premier fund?

Paul947

MFO has favorably reviewed a number of emerging market funds in recent years. Among those with at least five years of history are Fidelity Total EM (FTEMX), City National Rochdale (CNRYX), Seafarer G&I (SIGIX) and Driehaus (DRESX). Using MFO Premium, each of these funds looks good but GuideMark EM (GMLVX) seems to look better than each of those (with CNRYX a close 2nd.)

I used Morningstar and MFO Premium to examine performance. Morningstar rates CNRYX a 5 star. For funds with below average risk but with 5 year and 3 year returns in the top quartile, it is 1 of 7 funds. Adding a requirement of 10 year performance in the top half, it is the only fund. It shows up extremely well using the MFO Premium tool. Its MFO Ratings, MFO Rank %, Ulcer Index and Bear Market Ratings show an EM fund that protects on the downside while delivering top tier returns.

What am I missing?

LLJB

This is a strange one, but I think this is what you were missing- M* categorizes the fund as 'Large Value' until 2016 when it became an emerging markets fund. The fund was sub-advised by a firm called Barrow, Hanley, Mewhinney & Strauss until late 2015 when Goldman Sachs became the sub-advisor and put managers on the fund who came to them in a mid-2014 acquisition. I went back to the SEC filings from 2015 and indeed, the fund was called the GuideMark Large Cap Value fund and it's holdings were all big US companies until late 2015. I guess that means anything more than 18 months of performance comparison to emerging markets is meaningless.

msf

My usual threshold question before I go past screening a fund is to check whether I could buy the fund. Are these shares available to you? (So far, I haven't found any back doors to invest without using an advisor, though M* claims that it is available through TIAA. I don't have access to the TIAA brokerage fund list, so I can't verify.)

The next thing I do is check manager tenure - are the performance figures meaningful (especially since you placed emphasis on ten year performance)? One notices that the managers changed completely less than three years ago, and that the fund is subadvised by Goldman Sachs. That suggests a possible subadvisor change in 2015.

A quick check of the SAI says that " on October 9, 2015, ... the name of the GuideMark® Large Cap Value Fund was changed to GuideMark® Emerging Markets Fund."

For completeness, a review of the last prospectus (July 31, 2015) before the name change confirms that GuideMark® Large Cap Value Fund (GMLVX) had been subadvised by Barrow, Hanley, Mewhinney & Strauss, LLC. That's a good management shop. Vanguard employs them for some of their funds, such as VASVX and VWNFX. But EM it's not.

Everyone should read a fund's prospectus, though even without that one can see this change on the M* fund performance page, where M* classifies the fund as LCV through 2015.

Edit: Out of curiosity, I ran the same screen - below average (or better) risk, 3 and 5 year performance in top quartile, ten year performance in top half. The elephant in the room, NWFFX, passes this screen, as does HLMEX though that fund is closed.

Dennis Baran

FWIW it's available at TD with a $0 minimum but a 49.99 TF.

LLJB and msf are spot on about this one, which I had begun examining. Frankly, I was quite surprised when I read in the SAI that its objective had gone from LCV to EM -- I mean-- what a change!

msf

Are you sure about TDA? It's retail brokerage research page says:

Not Available through TD Ameritrade
GuideMark® Emerging Markets Fund Service Shares GMLVX

Of course sometimes what brokerages actually do is different from what they say on their website.

Ted

@Paul947& MFO Members: U.S. News & World Report Ranks GMLVX # 1 In t (DEM) fund category.
Regards,
Ted
https://money.usnews.com/funds/mutual-funds/diversified-emerging-mkts/guidemark-emerging-markets-fund/gmlvx

Dennis Baran

@msf

Are you sure about TDA? It's retail brokerage research page says:
Not Available through TD Ameritrade
GuideMark® Emerging Markets Fund Service Shares GMLVX

Yes, that's what I'm showing when I use the Order Entry Screen if I want to buy it. Here's what I see.

Information About This Fund
Initial IRA Minimum Amount: 0.00
IRA Subsequent Amounts: 0.00
Open for Investment: Yes
Transaction Fee: Yes

Fund symbol: GMLVX
This fund is a transaction fee fund.
Notice: Be aware that this transaction is subject to a TD Ameritrade fee.
This fee is in addition to any fees noted in the fund's prospectus.

I will call the the TDA Mutual Fund Department Monday to see if this is accurate. I have also seen this discrepancy with other funds from TD, the latest being MOWNX.

msf

Calling seems like the best idea. Here's what I see when I try to do an exchange from a fund I have in an HSA account with TDA (I don't keep spare cash on the brokerage side) to GMLVX. This is from the order comfirm page, right before finalizing the order:

Details About the Fund You're Selling
 Open for Investment: 	 	Closed to New 	
 Transaction Fee: 		No 	
 CDSC Charge: 	 	 	0.00% 	
 Cut Off Time: 	 	 	4:00 PM EST 	
 Settlement Date: 		T+1 	
 Redemption: 	 		None 	
 See prospectus for more information. 	
 
Details About the Fund You're Buying
 Initial IRA Minimum Amount: 	0.00 	
 IRA Subsequent Amounts:	0.00 	
 Open for Investment: 		Yes 	
 Transaction Fee: 	 	Yes 	
 Cut Off Time: 	 	 	4:00 PM EST 	
 Settlement Date: 	 	T+1 	
 Redemption: 	 	 	None 	
 Purchase Fee: 	 	 	0.00% 	
 CDSC Charge: 	 	 	0.00% 	
 Sales Charge:  	 	0.00% 	
 See prospectus for more information.

The problem is that this is what I see whether I enter GMLVX, or a DFA fund (e.g. DFCSX, see MFO thread on developed small caps), or other institutional class funds that aren't readily available.

FWIW, MOWNX shows up as an NTF fund with a $2500 min on the order confirm page, otherwise it appears the same as well. Advisor-only shares, like WASYX (see this MFO thread) show up NTF, $0 min on the order confirm page, but their TDA fund pages likewise say "Not Available through TD Ameritrade"

Maybe if I pressed the "Place Order" button the system would even accept the order. The question is whether the order would actually go through. Again, calling seems like the best bet - just hope you get someone who digs a little deeper than reading off the same screen.

TheShadow

Here is the fixed link to the MFO thread on developed small caps:

http://www.mutualfundobserver.com/discuss/discussion/34561/investing-in-developed-markets-think-small

msf

Thanks. My error - a bit too much paste and a bit too little cut in the link. I've corrected it in my post above.

Dennis Baran

@msf Thx for the info.

Concerning MOWNX at TD, the I class has been available for some time, but not the N class. So I emailed the managing director at Moerus nine days ago about having the N class listed. He didn't reply, and so I expressed my disappointment to him on Wed. about not hearing from him.

He then responded, apologized, and had the shares listed on Friday, which I confirmed with my rep at TD.

But yes, I will follow up Monday about GMLVX for sure.

Thx again.

Dennis Baran

From the TDA Mutual Fund Department: GMLVX is available for purchase for advisor/institutional accounts. Retail investors may transfer the fund to TD, redeem it there, but not buy it.

Best.

msf

Now all you have to do is find a place to buy those original shares. Back to square one.

hmgodwin

openice said:

@msf Thx for the info.

Concerning MOWNX at TD, the I class has been available for some time, but not the N class. So I emailed the managing director at Moerus nine days ago about having the N class listed. He didn't reply, and so I expressed my disappointment to him on Wed. about not hearing from him.

He then responded, apologized, and had the shares listed on Friday, which I confirmed with my rep at TD.

But yes, I will follow up Monday about GMLVX for sure.

Thx again.

When I log into my TD account, MOWNX is still not available. Is your account showing that it is available?

Dennis Baran

@hmgodwin

Choose the Trade Tab>Mutual Funds>Buy>Enter Mutual Fund (MOWNX)>and continue from there.

You can also use Choose the Fund Family from the pull-down menu, find Moerus, and place your trade from there, but the above method is better.