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My original post clearly stated similar strategy, meaning in a different wrapper. So I look at it you got the main manager, running a similar strategy since 1989. Will prolly give you a real good sense of his acumen over time. It's clear the actual fund did not start then.I was trying to be helpful and if I wasn't simply disregard my reply..no worries on my end, enjoy your day
The following was found by a quick Google search, and is a direct copy-paste. The statistics from prior to MRFOX’s existence are reflective of the Marshfield Equity Composite, which is a non-publicly available portfolio run by these same people. This is what is done by MANY funds, portfolio advisors, etc., especially of new funds (PRCFX is an example, I believe, as Giroux ran a portfolio for SMAs in a manner similar to this new fund); they quote returns of their portfolios prior to the existence of said mutual fund(s).
“Marshfield Associates is a concentrated, long-only value investment adviser established in 1989. Located on Washington, DC’s Dupont Circle, the firm offers separately managed accounts and a mutual fund, the Marshfield Concentrated Opportunity Fund. It serves both institutional and private investors. Marshfield is owned by its seven 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.”
Despite all that, MRFOX's outperformance of the S&P is nowhere near the outperformance (that was reported here, that I did not verify) of the Marshfield Equity Composite period.
So the performance history hasn't repeated itself in this case, and it really hasn't come that close to rhyming, despite the notion that it surely "prolly" or actually did.
I have not delved into the links @baseball_fan provided. I would cut him or anyone slack if they did not use words precisely to match facts about investments, as long as their posts are in the right spirit. He did disclose that he exited the fund, though may or may not be contemporaneously. Once someone discloses exiting a fund, i would consider the statute on any prior +ve comments on the fund expired.
On a separate but related note, with active funds I am more focused on good management than short term or even a couple of years’ performance. Good management takes care of performance. I am always looking for signs of mismanagement of fund companies or misalignment of management goals with mine. I will not name names but I had pointed out those issues with other fund companies before and got chewed up by forum members for it. I would always appreciate if others look out for signs of mismanagement.
I personally do not put much weight on more than the past 3 years of a manager's performance, except when I want to include unusual periods like Covid. I am not the same person I was three years ago and I would assume the same for a manager and his circumstances. Even if everything stays the same, it is unlikely AUM does if the manager is performing well. Some people just do not scale well and do not succeed at higher scale (AUM), and so I do not glean much skill related useful information by going back more than three years.
So the outperformance of the Marshfield equity composite from late 1989 thru mid 2020 vs sp500 was 283bps annually. Looking briefly at MRFOX vs sp500 since inception of the mutual fund was approx 260 bps. That outperformance over time is huge.
So from where I sit, seems to me that is similar outperformance. Now, the real question is if it's repeatable or not?
Now, the real question is if it's repeatable or not?
Any forecast has to come with a timeline. Please pick the timeline you are comfortable with and tell us your forecast(s), which I will take as just that.
I think it has lagged due to eschewing tech, which is unusual for a LCG, or just growth, fund. This has also led it to underperform over the last 3-6 months as tech has really pulled away from the rest of the stock market. I feel like AKREX similarly was a tech-light growth fund, but I owned it only briefly and sold it multiple years ago, so my memory may be failing me.
Just a WAG, so take it with a grain of salt. I think they pick good compounding businesses that aren’t really tech companies (and V and MA used to be tech companies until the rejiggering a few years back, so maybe the tech-avoidance wasn’t intentional).
@BaluBalu, I appreciate your diplomacy in your posts (as well as your knowledge sharing, obviously). And agree with a lot of what you post.
So to try to get some, you know, FACTS, about what one poster is incessantly claiming about prior performance on this thread, I phoned Marshfield today.
Here's what a, LT, experienced Marshfield representative told me TODAY, quoting her pretty much verbatim in BOLD:
She has NEVER in her life heard the words "Marshfield Equity Composite" (that another poster is repetitively using on this thread and citing TRs for vs S&P) strung together in that sequence.
She has NO IDEA what that is, what it might reference, or how it might be calculated. It is not anything Marshfield calculates. (Note that the poster has NEVER posted any support or links for it and I guess I now know why.)
MRFOX incepted on 12/28/15 (as I previously posted). It was a NEW fund and NOT the second coming of ANY previous advisor/private/public fund that those PM's managed.
ANY prior performance of ANY other Marshfield funds, advisor, private or public, is irrelevant to the performance of MRFOX.
==============================
So, there's that.
And based on that he's my Conclusions pending any other FACTS:
(1) MRFOX has ~8 1/2 years of performance data. That's the data I will use to review it, and the data that I suggest any reasonably intelligent investor should use as well.
@stillers I think you might have gotten some faulty info. This is from the basic info tab on a manager database I have access to. It has returns going back over 20 years for this strategy, with said returns being provided by the manager on a quarterly basis.
STRATEGY OVERVIEW Manager: Marshfield Associates Strategy name: Marshfield Core Value Equity Year of inception: 1989 Benchmark: S&P 500 Composite Product Group/Category: US Equity, Large Cap Value Status: Open to All Investors Strategy Assets: $US6.0 billion as at 31 Mar 2024 Number of clients: 4659 Outperformance target: Not Provided Expected tracking error: We are a concentrated manager of about 20 names - don't manage tracking error Number of stocks: 17.00 Portfolio manager: Christopher M. Niemczewski Marketing contact(s) Kim Vinick Richard Seaton
@stillers. Relax . Hey I have attempted to link a document several days ago to one of my replies but I don't see that it posted. Trust me it's there, I'll find it again and try to link it or at least post the path to access it. I guess maybe I'm the poster you're referring to?
Dennis Baran did a write up on MRFOX in the Feb. 2019 MFO commentary. He mentions that the funds' philosophy, process and discipline have been used successfully by the managers since 2008 with winning results and gives data on that SMA method. As Dennis points out, SMA data may give a "sense" of the mutual funds possible longer-term performance. A sense certainly isn't exact fund data of course.
The fund is managed according to the same philosophy, process, discipline, and objectives as its SMA Core Equity product, which allows us to get a sense of the strategy’s long-term performance. Since 1989, that APR is 10.61% vs. the S&P 500 9.27%. That’s net of fees with an ER of 1.25%, higher than the fund. In 2008, its net return was -16.45% vs. the S&P 500’s -36.99%.
FWIW, I don't invest in this fund and don't plan to. But history of how management handles their Separately Managed Accounts (SMA), seems relevant to how they run their mutual fund. Do SMA results translate to what to expect in a mutual fund? Probably not exactly, but the managers methods and process probably do.
From their website:
Separately Managed Accounts (SMA) Our SMAs are highly concentrated, typically holding 16-20 stocks. We are disciplined adherents of our process and are extremely selective regarding the stocks we want to own. We seek resilient companies with long-term competitive advantages, and we require a margin of safety when making a new stock purchase. Moreover, we are willing to hold cash when we cannot find the opportunities we seek. Historically, our SMAs have been characterized by low turnover and less volatility than the market.
Ah, so finally some real, however badly dated (June 2020) and at first swipe, marginally useful support. If you were an auditee of mine, I'd just STOP my review here and kindly ask you to, you know, try again.
But given you ain't, I trudged on, and glad I did because it's an eye-opener...
"Marshfield Equity Composite Positions" (MECP) does not appear to be defined. Maybe I missed it but I looked pretty hard. Without that, as reader of this data, I STOP right there and find out WTH is included in that word salad and its data. I then massage that data and carve out whatever data might be relevant.
Scary footnote at t/m "*" on the bottom of Pages 6-10 about MECP Gross data that above is compared to the S&P data: (paraphrasing) "MECP Gross does not reflect the payment of advisory fees and other expenses. Go to Appendix B."
Say what?
Lost further interest in this dated data there and almost skipped looking at Appendix B. But alas, at Appendix B, TR is shown net of fees. So, why then...Ugh!
(NOTE: IF on this thread you have been unknowingly quoting Gross MECP performance data, you will find significantly LOWER MECP TRs Net of Fees on Page 19, Top Left, Col 3.)
So I looked at Page 10. It shows splits for periods that a prospective investor really doesn't care about in relation to the notions purported on this thread and does nothing to answer the salient question of MECP performance being predictive of MRFOX performance given those splits.
What you need to show to support your notion that MECP (again, whatever that is) performance (paraphrasing) "will probably predict" (and more importantly, DID predict, since we have 8 1/2+ years of MRFOX performance data) is the respective performance data NET OF ALL FEES for (and again, ALL of the MECP data could be irrelevant until it is known what is actually in MECP data) :
MECP: Inception (?) to 12/27/15 (date before MRFOX inception) I have no data available to calculate that S&P: MECP Inception to 12/27/15 I would need to know the exact MECP inception data
Bottom Line: This (to me at least) is an unnecessary exercise for any prospective MRFOX investor as we already have 8 1/2+ YEARS of MRFOX performance, we have no idea WTH is in MECP, and the data this entity provides APPEARS TO SHOW all comparisons to the S&P at Gross (until you get to Appendix B and do your own math). IF that truly is the case, they got no shot at any of my investment dollars.
Disclaimer: Sorry, if I was still back in the mode of running audit departments, I would have been far more thorough with my review! But it's a start, eh?
This is not my thread (OP's) and so my apologies for butting in here. I read both of your posts.
From @stillers latest post, I gather that the total returns were reported in some parts of the report on a gross basis. It makes no difference to me if the presentation is qualified with a footnote; IMO, total return of a fund or investment should always be reported net of expenses. Whoever produced the total returns without deducting expenses loses credibility in my eye.
I guess the moral of the story for me is that one has to be circumspect before repeating others' claims. In this particular case, I doubt any forum members relied on historic information prior to the creation of the fund - I certainly did not. (Of course, I could be an exception as I tend to do research after initiating a position.)
I think it is time to direct all of our energies on to the fund and its management. I continue to own the fund but the manager's flippant attitude (may be just a writing style?) gives me a pause. At some point, I will have to decide whether to sell all or increase my holding in the fund, and my returns from the fund unlikely will be the determining factor. The manager is not going to miss me, given $6B in total AUM (inclusive of the 5,000 separate accounts).
It was interesting: On Sunday Fidelity website listed MRFOX but said that it is closed. On Monday it became available. Maybe our requests helped. Let us hope that it does not grow too large.
Just want to remind folks interested in this fund - the fund has a 90 day contingent redemption fees that would be paid to the fund. I have held long enough for the fees not to apply to me should I choose to sell.
@stillers. It's my perception you're not tracking the point I was trying to make...in that the guy who has been running the fund and the other account has been using a similar approach meaning concentrated with decent risk return profile for a long time. Indicates to me it's likely more than luck or running monies that have the correct approach during a specific market environment/cycle.
The fund does have appeal from that perspective and also doesn't have the tech high flyers in it ..of course I don't think you can also say the stocks it holds are low valuation either
@Baseball Fan The PM writes, "Some of our stocks are pretty highly valued, but not high enough for us to sell or pare back. Some are relatively inexpensive but not cheap enough to buy more. So there’s an array but little movement. I would say that if the market continues to climb like this, we will be far more likely to sell than to buy. Note that we’ve been here before many, many times and have found that patience is critical. What we can’t ever say is when the fever will break…."
"The fund . . . doesn't have the tech high flyers in it ..of course I don't think you can also say the stocks it holds are low valuation either." On point!
I already assumed they are more likely to sell than to buy. Also, because of the high valuations of the stocks it holds, those holdings could easily see material price drops if the current risk off mood continues. Yesterday, the fund gave up 1.32%. At 25% cash, that is equivalent to a drop of 1.76% in its investments, reflecting the high valuations of its holdings. That is bigger than the drop in any holdings in my portfolio yesterday.
As a concentrated portfolio (18 stocks), I just hope they do not buy / hold anything going forward that can get into political cross hairs / pronouncements. That is the part that makes me nervous going forward and why I am reducing / eliminating individual stocks in my portfolio.
Yes, as a Long/Short Equity Product, VELIX is worth considering. It's a 3.8 year-old fund with only $67M in AUM. Its LT APR is 15.6%. It does well on the downside (202201-202209) beating the SP 500 by 10.4%; however, Immediately afterward (202210-202406), it lagged by -10.8. Versus the SP 500, its 3/yr. performance is -2.1%; its 1/yr is -7.8% ((Source MFO Premium). It's not a GO, which as you may know, has a high bar.) When I wrote the profile, the fund was 80% Long. I'm waiting for a response from the co-manager if that's still accurate. Typically it is long. Attached is the fund's 2Q commentary from Ric Dillon, CIO and CEO. Let me know if you have further questions or concerns.
Thanks Dennis. My follow on question would be when this fund was started by VELA, was it called something else? Specifically large cap 130/30?
And if so why the name change? I do recall an article from JR at Morningstar in which the article didn't have overly positive things to say about the 130/30 style funds.
Also question for Vela, how does the fund differ from a 130/30 and is VELIX run in a similar fashion as the Long short fund Mr Dillon ran at the other place and if so all things being equal which they aren't could one read anything into that?
L-S lite, 130-30 L-S funds were popular at one time. Fido also had one too. When that fad passed, firms changed the names. Something similar is going on for ESG now.
Comments
Key word there is "prolly" (er, probably).
See my reply to Graust.
The following was found by a quick Google search, and is a direct copy-paste. The statistics from prior to MRFOX’s existence are reflective of the Marshfield Equity Composite, which is a non-publicly available portfolio run by these same people. This is what is done by MANY funds, portfolio advisors, etc., especially of new funds (PRCFX is an example, I believe, as Giroux ran a portfolio for SMAs in a manner similar to this new fund); they quote returns of their portfolios prior to the existence of said mutual fund(s).
“Marshfield Associates is a concentrated, long-only value investment adviser established in 1989. Located on Washington, DC’s Dupont Circle, the firm offers separately managed accounts and a mutual fund, the Marshfield Concentrated Opportunity Fund. It serves both institutional and private investors.
Marshfield is owned by its seven 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/
Thanks, man, that helps my case.
Despite all that, MRFOX's outperformance of the S&P is nowhere near the outperformance (that was reported here, that I did not verify) of the Marshfield Equity Composite period.
So the performance history hasn't repeated itself in this case, and it really hasn't come that close to rhyming, despite the notion that it surely "prolly" or actually did.
On a separate but related note, with active funds I am more focused on good management than short term or even a couple of years’ performance. Good management takes care of performance. I am always looking for signs of mismanagement of fund companies or misalignment of management goals with mine. I will not name names but I had pointed out those issues with other fund companies before and got chewed up by forum members for it. I would always appreciate if others look out for signs of mismanagement.
So from where I sit, seems to me that is similar outperformance. Now, the real question is if it's repeatable or not?
Just a WAG, so take it with a grain of salt. I think they pick good compounding businesses that aren’t really tech companies (and V and MA used to be tech companies until the rejiggering a few years back, so maybe the tech-avoidance wasn’t intentional).
@BaluBalu, I appreciate your diplomacy in your posts (as well as your knowledge sharing, obviously). And agree with a lot of what you post.
I read every one of your posts and find them useful and equally enjoyable.
So to try to get some, you know, FACTS, about what one poster is incessantly claiming about prior performance on this thread,
I phoned Marshfield today.
Here's what a, LT, experienced Marshfield representative told me TODAY, quoting her pretty much verbatim in BOLD:
She has NEVER in her life heard the words "Marshfield Equity Composite" (that another poster is repetitively using on this thread and citing TRs for vs S&P) strung together in that sequence.
She has NO IDEA what that is, what it might reference, or how it might be calculated. It is not anything Marshfield calculates. (Note that the poster has NEVER posted any support or links for it and I guess I now know why.)
MRFOX incepted on 12/28/15 (as I previously posted). It was a NEW fund and NOT the second coming of ANY previous advisor/private/public fund that those PM's managed.
ANY prior performance of ANY other Marshfield funds, advisor, private or public, is irrelevant to the performance of MRFOX.
==============================
So, there's that.
And based on that he's my Conclusions pending any other FACTS:
(1) MRFOX has ~8 1/2 years of performance data. That's the data I will use to review it, and the data that I suggest any reasonably intelligent investor should use as well.
(2) It's the internet folks. Be careful out here!
STRATEGY OVERVIEW
Manager: Marshfield Associates
Strategy name: Marshfield Core Value Equity
Year of inception: 1989
Benchmark: S&P 500 Composite
Product Group/Category: US Equity, Large Cap Value
Status: Open to All Investors
Strategy Assets: $US6.0 billion as at 31 Mar 2024
Number of clients: 4659
Outperformance target: Not Provided
Expected tracking error: We are a concentrated manager of about 20 names - don't manage tracking error
Number of stocks: 17.00
Portfolio manager: Christopher M. Niemczewski
Marketing contact(s)
Kim Vinick
Richard Seaton
Kind regards
Baseball fan
From their website:
Ah, so finally some real, however badly dated (June 2020) and at first swipe, marginally useful support. If you were an auditee of mine, I'd just STOP my review here and kindly ask you to, you know, try again.
But given you ain't, I trudged on, and glad I did because it's an eye-opener...
"Marshfield Equity Composite Positions" (MECP) does not appear to be defined. Maybe I missed it but I looked pretty hard. Without that, as reader of this data, I STOP right there and find out WTH is included in that word salad and its data. I then massage that data and carve out whatever data might be relevant.
Scary footnote at t/m "*" on the bottom of Pages 6-10 about MECP Gross data that above is compared to the S&P data: (paraphrasing) "MECP Gross does not reflect the payment of advisory fees and other expenses. Go to Appendix B."
Say what?
Lost further interest in this dated data there and almost skipped looking at Appendix B. But alas, at Appendix B, TR is shown net of fees. So, why then...Ugh!
(NOTE: IF on this thread you have been unknowingly quoting Gross MECP performance data, you will find significantly LOWER MECP TRs Net of Fees on Page 19, Top Left, Col 3.)
So I looked at Page 10. It shows splits for periods that a prospective investor really doesn't care about in relation to the notions purported on this thread and does nothing to answer the salient question of MECP performance being predictive of MRFOX performance given those splits.
What you need to show to support your notion that MECP (again, whatever that is) performance (paraphrasing) "will probably predict" (and more importantly, DID predict, since we have 8 1/2+ years of MRFOX performance data) is the respective performance data NET OF ALL FEES for (and again, ALL of the MECP data could be irrelevant until it is known what is actually in MECP data) :
MECP: Inception (?) to 12/27/15 (date before MRFOX inception)
I have no data available to calculate that
S&P: MECP Inception to 12/27/15
I would need to know the exact MECP inception data
MRFOX: 12/28/15-Current +277%
S&P (using eg FXAIX): 12/28/15-Current +221%
And let's see what you get, eh?
Good luck carving that out!
Bottom Line: This (to me at least) is an unnecessary exercise for any prospective MRFOX investor as we already have 8 1/2+ YEARS of MRFOX performance, we have no idea WTH is in MECP, and the data this entity provides APPEARS TO SHOW all comparisons to the S&P at Gross (until you get to Appendix B and do your own math). IF that truly is the case, they got no shot at any of my investment dollars.
Disclaimer: Sorry, if I was still back in the mode of running audit departments, I would have been far more thorough with my review! But it's a start, eh?
I'll wait for your reply!
This is not my thread (OP's) and so my apologies for butting in here. I read both of your posts.
From @stillers latest post, I gather that the total returns were reported in some parts of the report on a gross basis. It makes no difference to me if the presentation is qualified with a footnote; IMO, total return of a fund or investment should always be reported net of expenses. Whoever produced the total returns without deducting expenses loses credibility in my eye.
I guess the moral of the story for me is that one has to be circumspect before repeating others' claims. In this particular case, I doubt any forum members relied on historic information prior to the creation of the fund - I certainly did not. (Of course, I could be an exception as I tend to do research after initiating a position.)
I think it is time to direct all of our energies on to the fund and its management. I continue to own the fund but the manager's flippant attitude (may be just a writing style?) gives me a pause. At some point, I will have to decide whether to sell all or increase my holding in the fund, and my returns from the fund unlikely will be the determining factor. The manager is not going to miss me, given $6B in total AUM (inclusive of the 5,000 separate accounts).
Schwab Regular 10K, IRA 1K. TF $49.95
The fund does have appeal from that perspective and also doesn't have the tech high flyers in it ..of course I don't think you can also say the stocks it holds are low valuation either
Best regards
Baseball fan
"The fund . . . doesn't have the tech high flyers in it ..of course I don't think you can also say the stocks it holds are low valuation either." On point!
I already assumed they are more likely to sell than to buy. Also, because of the high valuations of the stocks it holds, those holdings could easily see material price drops if the current risk off mood continues. Yesterday, the fund gave up 1.32%. At 25% cash, that is equivalent to a drop of 1.76% in its investments, reflecting the high valuations of its holdings. That is bigger than the drop in any holdings in my portfolio yesterday.
As a concentrated portfolio (18 stocks), I just hope they do not buy / hold anything going forward that can get into political cross hairs / pronouncements. That is the part that makes me nervous going forward and why I am reducing / eliminating individual stocks in my portfolio.
Unrelated and off topic but any followup thoughts regarding VELIX. Vela large cap plus fund?
I recall you authoring an article regarding that fund and might be a good one to take a closer and fresh look at..
Best regards
Baseball fan
https://funddocs.filepoint.com/vela/?file=VELA-LargeCap-Commentary.pdf
And if so why the name change? I do recall an article from JR at Morningstar in which the article didn't have overly positive things to say about the 130/30 style funds.
Also question for Vela, how does the fund differ from a 130/30 and is VELIX run in a similar fashion as the Long short fund Mr Dillon ran at the other place and if so all things being equal which they aren't could one read anything into that?
Best regards
Baseball fan
Something similar is going on for ESG now.