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As I continue to gradually reduce my funds, book gains vs losses on the books, and move toward go anywhere funds, I have put in a sell for DODWX yesterday.
I will be deploying the proceeds equally into existing funds in my taxable accounts - FMIHX, FMIJX, PTHDX, WGRNX, equally.
DODWX was inherited. Has not lived up to hype. Does not let me sleep better. Lowest ER is not proving anything. It is gone.
I agree with your assessment of DODWX. The FMI funds are rock-solid, but I think that there are more attractive global equity funds than PTHDX and WGRNX. In that space, I would take a look at ARTGX, MSFBX (NTF, load waived at Fidelity) and MDISX (available at Wellstrade for low minimums).
I own a lot of Artisan funds. Artisan and Bridgeway funds are the only two companies from where I own Large, mid, Small funds. For the rest I'm going all cap. I'm also looking to reduce number of funds. Have been looking to do that for long time. So don't want another new fund in USAWX unless I have compelling reason to sell PTHDX and WGRNX and I don't.
As I said, My idea is not to look for another global fund in the same capitalization arena, rather to let active management go where it wants with it. I have held FMIHX for a long time as well and FMIJX practically from inception. I have kept them because I like how they invest and I like prudent concentration.
Finally I switched from MDISX to WGRNX. Don't recally honestly what happenned because for a while I owned both. Then MDISX only seemed to be either available using load or maybe managers switched into PTHDX at PIMCO or both.
Reply to @kevindow: Kevin, need to understand your recommendation of MSFBX. As I said below, not looking to add another fund - that would defeat my purpose. However, I take recommendations on the board seriously for the most part, and am a little confused by yours.
First of all fund is from Morgan Stanley - a tentacle of the giant vampire squid that is Goldman Sachs. Second, I don't find any compelling argument for it.
Finally, as a matter of fact, I own all my Artisan funds at Fido. Have been looking for a complimentary fund or two as I eliminate some other funds I had accumulated when I had hair. Please let me know if there is an easy way to find Load Waived NTF funds at Fido.
This was also a good thread below talking about some Global fund options including the Artisan funds. Yes I am a big fan of ARTGX and started investing in them when assets were quite small. I also like the FMI shop as well --- FMIJX is quite close in style to the successful but closed to new investors, ARTKX.
But yes I realize you are wanting to get rid of a fund (DODWX) and not replace it. Guess we're just throwing out there some good global funds - maybe a consideration for tax-deferred?
I like some of David Winter's ideas - but can't get myself to invest in his fund.
Comments/questions about a couple of funds you suggested:
MDISX - any reason for not recommending its sibling, MQIFX? Similar performance, smaller asset base (and somewhat smaller average market cap), lower cost (ER). But also somewhat higher turnover (and higher tax cost ratio).
MSFBX - This is a highly concentrated, virtual sector (consumer defensive) fund. (With a turnover ratio of 34% and a fairly narrow charter, it's a good bet that the fund will remain looking like a sector fund for a long time.)
Compared with those sector funds, rather than mismatched against generic world funds, MSFBX appears good, but not great. If one's interested in a portfolio heavily focused on tobacco, household consumables, etc., one could use a fund like FDFAX instead.
BTW, a Fidelity rep recently suggested MSFBX to a friend to use as her world stock fund; I gave my friend similar comments at the time. (But I suggested broader-based international funds, not sector funds, since this would be her only international exposure.)
Since you mentioned tax-deferred accounts, it is worth pointing out that many (but not all) global funds pass through to investors the foreign tax credit. This means that in a taxable account, you get a dollar-for-dollar credit for foreign taxes paid by the fund (if you so elect, rather than deducting the taxes). In a tax-deferred account, you don't get the option of taking this dollar-for-dollar credit (but you automatically get the deduction in the sense that the real, dollar value of your fund is reduced by the amount of the foreign taxes the fund paid).
IMHO this is an argument (albeit a weak one) for: 1) holding foreign/global funds in taxable accounts (to take advantage of the foreign tax credit), and 2) Ensuring that the global fund actually does pass through the foreign tax (otherwise you effectively get a forced deduction, which is usually worth less).
Don't own it - lots of things I don't. Interesting discussion in that it's not often you see folks dumping a fund that's netted them 35% over the last year. I'm sure your reasons are sound.
Reply to @Kenster1_GlobalValue: "In fact, I wish FMI would produce a global fund." ...I hope and think they will do so. They closed the domestic large cap fund and the international only fund hasn't picked up too many assets despite good performance.
FMIJX is quite close in style to the successful but closed to new investors, ARTKX.
Kenster,
It which ways do you see FMIJX and ARTKX being quite close in style?
The reason I ask is because I am in ARTKX (like it a lot) and I am looking for a second conservative well managed international fund (not global) and FMIJX seems to fit the bill.
However, if FMIJX is not complimentary to ARTKX, it may not be the proper fund in my case.
IMHO this is an argument (albeit a weak one) for: 1) holding foreign/global funds in taxable accounts (to take advantage of the foreign tax credit)
I would think that if you have a tax efficient international fund with low turnover, a good reason to put it in your taxable account is to get the foreign tax credit.
In addition, this leaves more room in your tax-deferred account for tax inefficient holdings such as bonds, REITS, and small-cap value.
Reply to @Mona: Not Kenster, but I'll throw in my $0.02; I own them both in a 50-50 split. They both use a moderate, very disciplined value style and most of the time, they've got at least some overlap in individual names. The ways I see them as complementary are that they differ on currency exposure (FMI's hedged, Artisan isn't) and FMI's got a little more of a focus on global footprint/brands. Also, ARTKX usually has a little more in mid-and small-caps, though nothing dramatic.
Big picture, the moderate value approach is very similar, and the currency exposure is the thing that sets them apart the most.
VF, I merely recommended taking a look at MSFBX, nothing more or less. I continue to consider this a solid fund, as indicated by the impressive annual returns, trailing returns, and investor returns, as well as the attractive trailing standard deviations, sharpe ratios and sortino ratios over the past 3-, 5-, and 10-year periods. In my screens, ARTGX and MSFAX/MSFBX are the most attractive global LC/MC equity funds.
As for the squid issue, I assume most fund management firms are squids until proven otherwise, and in my experience, most are squids or behave in a squid-like manner or have squid aspirations. And a manager which charges a 1.50% management fee and doesn't reduce the exorbitant expense ratio as assets have increased to $1.8B may be perceived by some as a squid or squid wannabe.
Both MDISX and MQIFX are available at Wellstrade for low minimums, and both are fine funds which have more attractive risk/reward profiles by my analysis than PTHDX and WGRNX. Looking at the two Franklin Mutual funds, MDISX is more of a global fund with its higher foreign equity exposure, and has a more experienced team of managers. But like you said, MQIFX has a lower expense ratio and much lower AUM. It is a close call between these two funds, but one cannot go wrong with owing either or both funds. Also, the two funds have significant overlap as they share 22 stocks in common.
As for MSFAX/MSFBX, the managers use the following process as detailed in the prospectus:
"The Sub-Advisers seek to invest in companies that they believe have resilient business franchises, strong cash flows, modest capital requirements, capable managements and growth potential. Securities are selected on a global basis with a bias towards value. The franchise focus of the Portfolio is based on the Sub-Advisers' belief that the intangible assets underlying a strong business franchise (such as patents, copyrights, brand names, licenses or distribution methods) are difficult to create or to replicate and that carefully selected franchise companies can yield above-average potential for long-term capital appreciation."
The managers currently have a strong bias toward the consumer defensive sector, but they are not obligated to do so. But if you look at the companies that they own, the stocks are definitely global gorillas. And as I detailed previously to VF, the fund has a very attractive risk/reward profile that cannot be ignored or explained away.
Click Research, then Mutual Funds. Then pick an asset class, notice that "no transaction fee funds" is already checked. It's that easy. Many new NTF funds to pick from.
Just to be clear, I wasn't suggesting MQIFX as better than MDISX. Rather, as you said, it's a somewhat equivalent (though not identical) fine fund. I did have an ulterior motive in bringing it up, though, which will become apparent in a moment.
I agree that MSFBX has more flexibility than than a sector fund on paper. However, the proof of the pudding is in the eating. For example, if one reads the prospectuses for MQIFX and MDISX, one would think that these are gun slinging, vulture investing, wild funds. In fact, they are managed for very low volatility, with a skill for "picking the bones" of companies not found in too many funds. The fact that these funds are allowed wide latitude doesn't mean they invest that way.
That's the case with MSFBX. Though it is not required to focus on consumer defensive stocks, it has done so for its entire lifetime. Here are figures from its annual statements (i.e. portfolios on 12/31) going back to 2001. Fund inception was 11/28/2001:
Just as comparing FICDX with broad based international funds never made sense (FICDX pretty consistently underperformed EWC, yet tended to earn 5 stars), one needs to take performance figures with a grain of salt. The risk/reward of MSFBX looks great compared with world stock funds, but less spectacular when compared with similar sector funds. Here's how MSFBX stacks up against FDFAX:
3 year 5 year 10 year Std Dev Sharpe Sortino Std Dev Sharpe Sortino Std Dev Sharpe Sortino MSFBX 12.86 1.28 2.38 15.70 0.70 1.07 13.03 0.73 1.10 FDFAX 11.63% 1.58% 3.6% 14.47 0.78 1.15 11.86 0.85 1.28
Now it would certainly be fair to turn the tables on me - isn't MSFBX a global stock fund, while consumer defensive funds are generally domestic funds? Yes, but here's where we look again at MQIFX. That's considered a global fund, and it has about 2/3 of its equity in US companies (63%). Similarly, FDFAX has about 2/3 in the US (66%). In fact, the benchmark that M* uses for "world stock" funds has 58% in the US, so neither of these funds is way off the benchmark.
Still, there's a real difference between 2/3 domestic (as with these funds), and 1/3 domestic (as with MSFBX). (Among other things, MSFBX is able to pass along a foreign tax credit, while the other funds aren't; but I digress.) Might account for some of the differences. (Without even looking, I'd expect that the higher the percentage a fund had in the US over the past three years, the better it did relative to peers, all else being equal.)
The point of all of this is not to say that MSFBX isn't a good fund - heck, any fund beginning with msf must be a good fund. Rather, it is that when something looks too good to be true, one should dig behind the numbers. And this is what my digging turned up. (Not because Kevin posted this, but as I wrote, because I'd looked into this particular fund for a friend already.)
Like Hank, I am curious why you are dumping DODWX. I don't own it, but looking at M*, it's beaten its benchmark and category over every time frame they measure, has a reasonable asset base, and low expensives. It did plunge during the 2008-09 crash -- is that the problem?
Reply to @BWG: Actually THIS is exactly what I've been talking about. FMI has soft closed FMIHX. Why? Interest of Shareholders because assets have ballooned. Now if they start a FMI Global fund which invests 50% like FMIHX and 50% like FMIJX, then they are misrepresenting the situation.
I really hope they do not open a global fund. I cannot imagine why anyone who holds FMIHX and FMIJX would want them to. They made a decision to open two separate funds. People can make up their minds which to own. Investors need to look beyond convenience of holding one fund vs too. Sure I would have preferred they had a global fund EARLIER. I would then own only ONE fund and then if they opened FMIHX and FMIJX WHILE assets were low, I would not invest in the individual funds while I would have no problems with them opening these funds.
One needs to look at history. I know things change. There needs to be a compelling reason though for one's actions.
Reply to @expatsp: If we look at a convenient point of time to get 1,3,5,10 year numbers, a lot of funds will beat performance benchmarks. I think I have outlined reasons for my selling DODWX as well as I can. Some of the reasons are simply personal - relieving myself gradually of the suffering from Excessive Funditis.
Comments
I agree with your assessment of DODWX. The FMI funds are rock-solid, but I think that there are more attractive global equity funds than PTHDX and WGRNX. In that space, I would take a look at ARTGX, MSFBX (NTF, load waived at Fidelity) and MDISX (available at Wellstrade for low minimums).
Kevin
As I said, My idea is not to look for another global fund in the same capitalization arena, rather to let active management go where it wants with it. I have held FMIHX for a long time as well and FMIJX practically from inception. I have kept them because I like how they invest and I like prudent concentration.
Finally I switched from MDISX to WGRNX. Don't recally honestly what happenned because for a while I owned both. Then MDISX only seemed to be either available using load or maybe managers switched into PTHDX at PIMCO or both.
First of all fund is from Morgan Stanley - a tentacle of the giant vampire squid that is Goldman Sachs. Second, I don't find any compelling argument for it.
Finally, as a matter of fact, I own all my Artisan funds at Fido. Have been looking for a complimentary fund or two as I eliminate some other funds I had accumulated when I had hair. Please let me know if there is an easy way to find Load Waived NTF funds at Fido.
http://www.mutualfundobserver.com/discussions-3/#/discussion/7046/oakmark-global-select-vs-artisan-global-value
But yes I realize you are wanting to get rid of a fund (DODWX) and not replace it. Guess we're just throwing out there some good global funds - maybe a consideration for tax-deferred?
I like some of David Winter's ideas - but can't get myself to invest in his fund.
In fact, I wish FMI would produce a global fund.
MDISX - any reason for not recommending its sibling, MQIFX? Similar performance, smaller asset base (and somewhat smaller average market cap), lower cost (ER). But also somewhat higher turnover (and higher tax cost ratio).
MSFBX - This is a highly concentrated, virtual sector (consumer defensive) fund. (With a turnover ratio of 34% and a fairly narrow charter, it's a good bet that the fund will remain looking like a sector fund for a long time.)
Compared with those sector funds, rather than mismatched against generic world funds, MSFBX appears good, but not great. If one's interested in a portfolio heavily focused on tobacco, household consumables, etc., one could use a fund like FDFAX instead.
BTW, a Fidelity rep recently suggested MSFBX to a friend to use as her world stock fund; I gave my friend similar comments at the time. (But I suggested broader-based international funds, not sector funds, since this would be her only international exposure.)
Since you mentioned tax-deferred accounts, it is worth pointing out that many (but not all) global funds pass through to investors the foreign tax credit. This means that in a taxable account, you get a dollar-for-dollar credit for foreign taxes paid by the fund (if you so elect, rather than deducting the taxes). In a tax-deferred account, you don't get the option of taking this dollar-for-dollar credit (but you automatically get the deduction in the sense that the real, dollar value of your fund is reduced by the amount of the foreign taxes the fund paid).
IMHO this is an argument (albeit a weak one) for:
1) holding foreign/global funds in taxable accounts (to take advantage of the foreign tax credit), and
2) Ensuring that the global fund actually does pass through the foreign tax (otherwise you effectively get a forced deduction, which is usually worth less).
...I hope and think they will do so. They closed the domestic large cap fund and the international only fund hasn't picked up too many assets despite good performance.
BWG
It which ways do you see FMIJX and ARTKX being quite close in style?
The reason I ask is because I am in ARTKX (like it a lot) and I am looking for a second conservative well managed international fund (not global) and FMIJX seems to fit the bill.
However, if FMIJX is not complimentary to ARTKX, it may not be the proper fund in my case.
Mona
In addition, this leaves more room in your tax-deferred account for tax inefficient holdings such as bonds, REITS, and small-cap value.
Mona
Big picture, the moderate value approach is very similar, and the currency exposure is the thing that sets them apart the most.
VF, I merely recommended taking a look at MSFBX, nothing more or less. I continue to consider this a solid fund, as indicated by the impressive annual returns, trailing returns, and investor returns, as well as the attractive trailing standard deviations, sharpe ratios and sortino ratios over the past 3-, 5-, and 10-year periods. In my screens, ARTGX and MSFAX/MSFBX are the most attractive global LC/MC equity funds.
As for the squid issue, I assume most fund management firms are squids until proven otherwise, and in my experience, most are squids or behave in a squid-like manner or have squid aspirations. And a manager which charges a 1.50% management fee and doesn't reduce the exorbitant expense ratio as assets have increased to $1.8B may be perceived by some as a squid or squid wannabe.
Take care.
Kevin
Hi msf,
Both MDISX and MQIFX are available at Wellstrade for low minimums, and both are fine funds which have more attractive risk/reward profiles by my analysis than PTHDX and WGRNX. Looking at the two Franklin Mutual funds, MDISX is more of a global fund with its higher foreign equity exposure, and has a more experienced team of managers. But like you said, MQIFX has a lower expense ratio and much lower AUM. It is a close call between these two funds, but one cannot go wrong with owing either or both funds. Also, the two funds have significant overlap as they share 22 stocks in common.
As for MSFAX/MSFBX, the managers use the following process as detailed in the prospectus:
"The Sub-Advisers seek to invest in companies that they believe have resilient business franchises, strong cash flows, modest capital requirements, capable managements and growth potential. Securities are selected on a global basis with a bias towards value. The franchise focus of the Portfolio is based on the Sub-Advisers' belief that the intangible assets underlying a strong business franchise (such as patents, copyrights, brand names, licenses or distribution methods) are difficult to create or to replicate and that carefully selected franchise companies can yield above-average potential for long-term capital appreciation."
The managers currently have a strong bias toward the consumer defensive sector, but they are not obligated to do so. But if you look at the companies that they own, the stocks are definitely global gorillas. And as I detailed previously to VF, the fund has a very attractive risk/reward profile that cannot be ignored or explained away.
Take care.
Kevin
Finding L.W. NTF funds at Fido is easy.
Click Research, then Mutual Funds. Then pick an asset class, notice that "no transaction fee funds" is already checked. It's that easy. Many new NTF funds to pick from.
Art
Kevin,
Just to be clear, I wasn't suggesting MQIFX as better than MDISX. Rather, as you said, it's a somewhat equivalent (though not identical) fine fund. I did have an ulterior motive in bringing it up, though, which will become apparent in a moment.
I agree that MSFBX has more flexibility than than a sector fund on paper. However, the proof of the pudding is in the eating. For example, if one reads the prospectuses for MQIFX and MDISX, one would think that these are gun slinging, vulture investing, wild funds. In fact, they are managed for very low volatility, with a skill for "picking the bones" of companies not found in too many funds. The fact that these funds are allowed wide latitude doesn't mean they invest that way.
That's the case with MSFBX. Though it is not required to focus on consumer defensive stocks, it has done so for its entire lifetime. Here are figures from its annual statements (i.e. portfolios on 12/31) going back to 2001. Fund inception was 11/28/2001: Over 50% in these four areas, year in, year out.
Just as comparing FICDX with broad based international funds never made sense (FICDX pretty consistently underperformed EWC, yet tended to earn 5 stars), one needs to take performance figures with a grain of salt. The risk/reward of MSFBX looks great compared with world stock funds, but less spectacular when compared with similar sector funds. Here's how MSFBX stacks up against FDFAX: Now it would certainly be fair to turn the tables on me - isn't MSFBX a global stock fund, while consumer defensive funds are generally domestic funds? Yes, but here's where we look again at MQIFX. That's considered a global fund, and it has about 2/3 of its equity in US companies (63%). Similarly, FDFAX has about 2/3 in the US (66%). In fact, the benchmark that M* uses for "world stock" funds has 58% in the US, so neither of these funds is way off the benchmark.
Still, there's a real difference between 2/3 domestic (as with these funds), and 1/3 domestic (as with MSFBX). (Among other things, MSFBX is able to pass along a foreign tax credit, while the other funds aren't; but I digress.) Might account for some of the differences. (Without even looking, I'd expect that the higher the percentage a fund had in the US over the past three years, the better it did relative to peers, all else being equal.)
The point of all of this is not to say that MSFBX isn't a good fund - heck, any fund beginning with msf must be a good fund
I really hope they do not open a global fund. I cannot imagine why anyone who holds FMIHX and FMIJX would want them to. They made a decision to open two separate funds. People can make up their minds which to own. Investors need to look beyond convenience of holding one fund vs too. Sure I would have preferred they had a global fund EARLIER. I would then own only ONE fund and then if they opened FMIHX and FMIJX WHILE assets were low, I would not invest in the individual funds while I would have no problems with them opening these funds.
One needs to look at history. I know things change. There needs to be a compelling reason though for one's actions.