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MRFOX

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  • edited May 16
    yugo said:

    JD_co said:

    Was able to initiate new BIVRX position via Schwab's PCRA retirement plan portal. Don't know how or why, but it gives access to (soft?) closed funds.

    I've just tried testing this by setting up a Schwab PCRA trade and got a message: "Buys for existing position only." Any chance you can share the details re how / when you were able to do it?
    This PCRA is attached to a state retirement plan ("Employer Sponsored"), so perhaps it has institutional access? It let me snag a new position in TRAIX as well.

  • Schwab PCRA is a brokerage window within the retirement plans and may have some plan level limitations.
  • An update on fund flows -

    The fund had the same or higher inflows than the previous month since Sept 23. That trend broke in May when the inflows are about half of those in April.
  • For the past three mo, MRFOX returned 0 to negative while SPY returned 5.5%. We all know how much MMs returned during that time.
  • Ya, spot on @balubalu

    My concern with foxy was that due to the concentration they'd be what I refer to as stuck in their positions ala AKREX akre focus fund with some overvalued stock holdings. Have reduced position by over 2/3. Might bail all out. Moved some of that monies into tbills, JDAEX easterly snow hedged equity and some PHEFX

    Wouldn't count them out but who knows.

    Best regards

    Baseball fan
  • edited June 15
    @Baseball_Fan,

    Concentrated funds are OK as long as the managers are not averse to portfolio turnover. M* shows MRFOX has zero turnover (8/31/2023) and AKREX at 2% turnover. Not sure what the current MRFOX turnover is. I was hoping with heavy inflows they also would be able to buy new or more promising investments. But when I look at holdings at M*, as of Feb 29, of the 18 holdings 7 are three star (means fairly valued) and rest are two star or one star (means overvalued). No 4 or 5 star holdings (nothing in its holdings was undervalued). M* also says Portfolio P/E was 20, the same as for SPHQ as of that date (I estimated working backwards).

    Based on https://marshfieldfunds.com/

    As of the end of Q1, the fund held 20% in cash. The fund probably received another 10% cash in inflows since Q1. The fund strategy says, "The cash position will, on average, be in the range of 0-25% of the portfolio and will be an output of the Adviser’s buy and sell decisions, not a tactical maneuver."

    The fund commentary indicates the fund was not static and had turnover during the quarter.

    "The broad market today seems to be hosting a tent revival of sorts, with tech stocks as the talismanic centerpiece. But this too offers us an opportunity: instead of bemoaning the exorbitant price of stocks, we rejoice in our ability, as just noted, to sell those holdings that are hitting highs we believe are unlikely to be sustained or surpassed, at least in the medium term. Markets like this, whether held aloft by hope, euphoria, or (ir)rational exuberance, do tend to return to earth at some point. If opportunity is knocking today, we’ll answer the door with a smile. What we won’t do is join the pilgrimage to the top of the cliff. But by this point, we assume we’re preaching to the choir."

    During April, the fund lost 4% while SPY lost about 6% but I guess that was not good enough for the fund to put some of its cash to work. I am guessing the fund can return zero and underperform until the current bull market tapers out or there is a material correction in the market. I guess, be prepared to test your patience for another 5 months. The Q2 portfolio and commentary may not be available timely (until much after the market conditions may have changed) to be highly relevant. The difficulty with the fund is lack of contemporaneous information but they do not have to worry about such tasks when the inflows are unrelenting.

    "The Fund is premised on the belief that in order to outperform the market, an investment strategy needs to be different from the market in as many ways as possible that add value on a risk-adjusted basis." [Bold added] Do not say you were not forewarned!

    The problem with AKREX is that once Chuck left, the remaining team is probably just sitting on the existing portfolio clueless and watching heavy outflows. But I remember even when Chuck was around the fund had very low turnover, which is one of the reasons why I did not invest in AKREX even during its hay days.

    Morale of these funds is that I think investors (unlike you) that have inertia in getting out of underperforming investments, should not invest in specialist funds like this. Sticking with
  • edited June 15

    @BaluBalu The only thing I can add is that she isn't sure about when to close the fund, specifically would it be unannounced or be announced later. She said, "I don’t know but we don't particularly want to accelerate the pace…."

    Hi Dennis, Do you mind clueing us in as to when the fund's Q2 portfolio and commentary may be available. Even if the fund does not release portfolio holdings monthly, it would be useful to know their month end cash holding. It would be great to know the current (or end of May) cash holding of the fund.
  • msf
    edited June 15
    M* shows MRFOX has zero turnover (8/31/2023) ... Not sure what the current MRFOX turnover is. I was hoping with heavy inflows they would be able to buy new or more promising investments.

    Four of the fund's 19 holdings (see below) were new positions as of the turnover reporting date. Turnover is the lesser of percentage bought (in dollars, not positions) and percentage sold. Apparently the fund didn't sell shares of any holdings in the year ending 8/31/23 but added new holdings (likely adding to existing holdings as well).

    https://www.morningstar.com/investing-definitions/turnover-ratio

    But when I look at holdings at M*, M* says of the 18 holdings 7 are three star (means fairly valued) and rest are two star or one star (means overvalued). No 4 or 5 star holdings.

    Those are star ratings today of equities that the fund held four months ago. How promising were those stocks when that last portfolio snapshot was taken? Let alone how promising they were last August when the fund added four stocks.

    In the six months between Aug 2023 and Feb 2024 the fund liquidated one position. A naive calculation would suggest a turnover ratio of 5.3% (1 stock out of 19 sold). The actual dollar weighted turnover (including any sales of shares in the other 18 companies) came to 7% (not annualized). That seems more typical of the fund, which had turnover ratios of 24%, 14%, and 14% for FYs 2021, 2020, and 2019.

    Semiannual report, Feb 29, 2024
    Annual report, Aug 31, 2023
  • edited June 15
    @msf,

    You spent all that time and effort for your reply post which I read and re-read three times to see if I can get any value out of it and I could not find any.

    I recognize there are posters in this forum at different levels of knowledge, diligence, and style. In writing to others or replying to their posts, I always presume they are knowledgeable and diligent in their work. I encourage you to do the same so your time is better spent in adding more value or the same value with way less time and effort. I do not think your objective is to knock other posters down but unfortunately other posters sometimes feel that way. Not sure why there is a disconnect. Ask for clarification if someone's writing style or facts leads you to think they may not be correct, rather than presume they do not know what they are talking about or they did not do their work before posting. Also, an occasional "I was wrong" or "I misunderstood" goes a long way. Others may differ but @yogibearbull is the standard to aspire for. He gives a lot but it seems he really pays attention to "it is not what or how much you give but how you make others feel."

    I am looking forward to a better recognition of your time and effort. Thanks.
  • You wrote that you were "hoping with heavy inflows [MRFOX] also would be able to buy new or more promising investments."

    During the period in question (the one ending Aug '23 with zero turnover), MRFOX increased the number of its positions by almost 20%. One of the new positions (Disney DIS) was clearly undervalued at the time according to M*. M* pegged its fair value around $145 while its price hovered around $90.

    Given these facts, could you clarify your hopes and whether the addition of Disney failed to meet those hopes? Discover Financial Services DFS, also added by the fund in this period, was similarly undervalued.

    Perhaps, since M* currently rates DIS and DFS as 3*, what you were hoping was that the fund would dump these recent acquisitions, seeing as they have met some sort of target?
    ---

    Many people assume that low or zero turnover means that a fund isn't changing its positions - a misunderstanding that your post reinforced, intentionally or not. I attempted to address that misunderstanding by providing M*'s definition of turnover and by using MRFOX as a case study.

    One wouldn't know the precise definition by looking at MRFOX's website, as its footnote says only that "turnover is a measure of how frequently assets within a fund are bought and sold by the manager."
  • edited June 15
    @msf,

    I made this single sentence paragraph to set it apart for a reason - "The fund commentary indicates the fund was not static and had turnover during the quarter."

    If I stated the following in a separate paragraph perhaps it would have been easier for you but I had reasons at that time for not creating an additional paragraph:
    "I was hoping with heavy inflows they also would be able to buy new or more promising investments. But when I look at holdings at M*, as of Feb 29, of the 18 holdings 7 are three star (means fairly valued) and rest are two star or one star (means overvalued). No 4 or 5 star holdings (nothing in its holdings was undervalued). M* also says Portfolio P/E was 20, the same as for SPHQ as of that date (I estimated working backwards)."

    You say, "Many people assume that low or zero turnover means that a fund isn't changing its positions - a misunderstanding that your post reinforced, intentionally or not. I attempted to address that misunderstanding by providing M*'s definition of turnover and by using MRFOX as a case study."

    This is what I was referring to in my suggestion to you. There is no reason to assume I did not know M* definition or the fund's definition or the historic unawareness (or misunderstanding) of forum members continues to persist. Reading 100s of pages a day (including legal opinions) was my job and am aware that if one misses footnotes one got nothing. There are times when I am strapped for time and skip portions but I would place that caveat in my posts. I take posting on investing matters here as a serious responsibility because I do not want others losing money (including opportunity costs from not making money) because of what I post and I presume others do the same. Of course, I understand sometimes posters mix in their investing posts emotion, venting, joking, etc., but I never presume they need to be educated.

    I think a lot of ink is spilled in this forum because people overlook context in either understanding others' posts or in responding. Many times I see folks responding to one or two sentences taken out of the context of the rest of the post. Trying to understand where the poster might be coming from and giving them the benefit of doubt made me a better listener. You all made me a better person (whether I set out to be or not).

    I wrote the post specifically to @Baseball_Fan as we both own the fund and he seems to understand my posts. I do not wish to spend more time on a matter that is not of direct use to anyone specific.

    Thanks for your posts.
  • @BaluBalu RE: MRFOX I'll get back to you.
  • Thanks
  • edited June 16

    @BaluBalu RE: MRFOX I'll get back to you.

    Appreciate it. Not having more contemporaneous fund info is making it difficult to hold. I hope they put out commentary at least once a month. When the fund is underperforming is when we need to hear more from the management.

  • @BaluBalu Around July 15th is when MRFOX updates the website with new info. Updating after quarter-end is the most efficient for them. The PM also writes, "However, I'll kick this to our marketing and ops folks to see if they have thoughts. And then adding, "I would also note that our goal is for investors to take the long view, so if they’re concerned about short term issues, then this might not be the right vehicle for them."
    I hope this helps. If you have further thoughts or concerns, you might consider sharing them with their management team yourself. Best.
  • edited June 18

    @BaluBalu Around July 15th is when MRFOX updates the website with new info. Updating after quarter-end is the most efficient for them. The PM also writes, "However, I'll kick this to our marketing and ops folks to see if they have thoughts. And then adding, "I would also note that our goal is for investors to take the long view, so if they’re concerned about short term issues, then this might not be the right vehicle for them."
    I hope this helps. If you have further thoughts or concerns, you might consider sharing them with their management team yourself. Best.

    Thank you, Dennis.

    Many funds release information about material fund changes once a month. Some of them are successful long term funds and many of us hold those funds long term. MRFOX have to find a way to communicate about the fund once a month. I am not asking them to write macro or market commentary once a month or ever, which is of no use to me. It takes 5 minutes of an administrative assistant’s time once a month when a process is set up to show material fund changes. If there is a desire to communicate, they will find a way to do so.

    I think it is a misplaced view for the management to say to the shareholders “if they are concerned about short term issues, then this might not be the right vehicle for them.” I did not get the thought to perhaps bail from the fund until I read that view.

    When we got into the fund, we already knew what is meant by the 90 day short term redemption penalty and so I am a bit surprised by the management reaction to my request for more communication. You can treat your shareholders like partners or simply as a counter party to a transactional arrangement.

    Edit: For the management to react the way they did, I am guessing they are overwhelmed (irritated?) with shareholder calls. There is nothing more I can say to them by calling them that I have not said here but thanks for the offer to call them. They can read this forum.
  • edited June 19
    BB "Concentrated funds are OK as long as the managers are not averse to portfolio turnover."

    Low/high turnover and/or Concentrated/non-Concentrated funds don't guarantee better performance or better risk-adjusted performance.

    Concentrated portfolio + low turnover can be terrible if the fund owns bad holdings.

    FAIRX has low turnover, high Concentration + poor 3-year performance. It took me 5 hours of research...not, only 2 minutes.
  • edited June 20
    "Concentrated portfolio + low turnover can be terrible if the fund owns bad holdings."
    Thanks for the insight, Captain Obvious!
  • "Concentrated portfolio + low turnover can be terrible if the fund owns bad holdings."
    Thanks for the insight, Captain Obvious!

    "Pearls of wisdom" (at least, he would say). He's a joke.

  • Observant1+JD
    My post wasn't an answer to you, but if you find anything wrong, I love to hear your "pearl of wisdom".
    As usual, I analyze funds, no comments about posters.
  • I’ve had bad experiences with concentrated funds and try to avoid them. You have to be very patient investor with them. They’re either very hot or very cold.
  • edited July 14
    A quick update -

    June Fund Facts and commentary are out.

    https://marshfieldfunds.com/fund-facts/
    https://marshfieldfunds.com/commentary/

    25% cash

    "While the cash we now hold . . . clips our wings a bit in terms of our ability to keep pace with the currents propelling today’s market, we don’t care. In taking the long view, we choose to embrace discretion over temporary gains, happy to exchange probabilistically fleeting prices for the optionality of cash and the relative safety of lower altitudes and reduced turbulence."

    (Is there a middle finger image in there I missed?!)

    Managers do not disclose how much they invest in the fund, except to state that they own more than $1M - pretty standard language. I was looking to find the actual amount invested / owned - a few fund managers do such a disclosure, though not common.

    This fund managers also manage separate accounts with total assets of $4.8B spread over 5,200 accounts. The fund AUM is <$900M. Not sure why we had a discussion about the fund potentially closing around $1B - it does not really matter.

    https://marshfieldfunds.com/wp-content/uploads/2024/01/2023-1229-Marshfield-SAI-final.pdf
  • I copied this from a previous discussion concerning MRFOX that I had shared.

    Pulled this off the Marshfield website. https://www.marshfieldinc.com/

    Marshfield is owned by its eight principals who have an average tenure of 23 years. Each principal must invest in the same stocks that Marshfield buys for its clients and may own no other publicly traded equities.
  • @Roy, whatever you wanted to copy did not come thru. Please try again.
  • Roy
    edited July 13
    Sorry about that. The main item I wanted to share was the quote at the bottom of the page of this link. I've copied and pasted the quote here as well.

    "Marshfield is owned by its eight principals who have an average tenure of 23 years. Each principal must invest in the same stocks that Marshfield buys for its clients and may own no other publicly traded equities."

    https://www.marshfieldinc.com/about-us/
  • edited July 14
    Thanks, @Roy. That is a pretty standard policy for any credible single fund company, including many hedge fund companies. That does not tell me whether the principals are not allowed to invest in any index funds like SPY or QQQ or bond funds or what %age of their wealth is in the fund or fund strategy.

    Having said that, contrary to others’ expectations, I like not to invest in a fund where the manager invests most of their wealth in the fund.
  • Positive vibes on this fund is for a couple reasons. Long term record going back 30 years with same strat is outstanding vs sp500. Up/ downside not even close. Very experienced fund MGMT, not just one star manager. Doesn't hold any of the glamour tech stocks

    ...

    Baseball fan

    What do you mean by "Positive vibes on this fund is for a couple reasons. Long term record going back 30 years..."

    This fund's Inception Date is 12/28/15.

    https://marshfieldfunds.com/fund-facts/
    Excerpt:

    1 Year 3 Year* 5 Year* Since Inception (12/28/15)*

    https://www.morningstar.com/funds/xnas/mrfox/people
    Excerpt:

    Management Team

    Elise J. Hoffmann
    Dec 29, 2015–Present

    Christopher M. Niemczewski
    Dec 29, 2015–Present

    Chad Goldberg
    Dec 29, 2022–Present


  • edited July 14
    D

  • @stillers - look up performance of Marshfield equity composite...Mr Niemszewski was managing the fund back in late 89' (do your own homework, not like I spent 10 hours researching this)...absolutely blows away SP500...from 12/89 thru 6/2020 composite returns were ~ 3530% vs 1568% SP...I'd say that was outperformance...
    https://issuu.com/biglehart2016/docs/marshfield_associates_for_rbc_june_2020_equity_bro
  • edited July 14

    @stillers - look up performance of Marshfield equity composite...Mr Niemszewski was managing the fund back in late 89' (do your own homework, not like I spent 10 hours researching this)...absolutely blows away SP500...from 12/89 thru 6/2020 composite returns were ~ 3530% vs 1568% SP...I'd say that was outperformance...
    https://issuu.com/biglehart2016/docs/marshfield_associates_for_rbc_june_2020_equity_bro

    Ugh.

    I apparently already did more research on MFROX than it appears you have, yet you seem to want to glorify it for 30 year performance THAT NEVER HAPPENED!

    Maybe YOU should re-read my post as YOU didn't answer my very simple question.

    Let me try to make it even more clear:

    MRFOX did not EXIST prior to 12/28/15. (See my prior post that provides pretty clear evidence of that FACT.)

    So why are you referencing ANY period or performance prior to 12/28/15 in a discussion specifically about MRFOX?

    Either clearly answer that specific question or don't bother posting anything else in response.

    Guessing where you're coming from here:
    Managers often manage a lot of different funds over their tenures. But their respective performances are fund-specific, NOT aggregate. Duh.

    Oh, and your link was worthless in relation to this question.

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