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Just a grumble about fund reporting

edited August 10 in Fund Discussions
I know I'm probably in the minority but I really hate the new 'user friendly' reporting that was mandated by the SEC on funds. Their 'annual reports' or 'interim reports' are one page jokes, with barely any information that's different from the 1-page information sheets. I don't mind them going all-digital but jeez, this 'improvement' is more a perk for the fund companies saving on admin time/reporting than investors. (Yeah yeah I know most ppl don't even read things as closely as we do at MFO, but work with me....)

I miss the shareholder letters from the portfolio managers and ability to thumb thru their exact holdings/expenses/statements in one document ... versus having to now go elsewhere to find the information in several documents which (to me) often is less convenient in many cases. Now, I mainly roll my eyes when I'm told a new AR or IR is ready for me to view -- which may also be part of the Grand Scheme* to move investors farther from their investments by making it less handy to know what exactly they own.

* conspiracy theory?

Comments

  • edited August 10
    ”I miss the shareholder letters from the portfolio managers …”

    So how did the SEC manage to remove those - or some of them anyway?

    After buying OAKBX couple months ago (which had been a stalwart of mine under Studzinski), I tried to pull up the letters to shareholders with the annual / semi-annual reports. In the old days they were pure gold. Now a joke. Wow. I sold the fund when my 60-day holding period was up, partially for that reason, but also because unlike the OAKBX of older years which used AAA credits as an equity hedge, the newer version has loaded up on lower quality bonds. What a change.
  • The new bond sleeve of OAKBX may be attractive to some.

    Chicago-based Harris is basically a boutique equity shop. It didn't have much analytical capability in bonds. But the old OAKBX with about 60% stocks and 40% in Treasuries/Agencies and investment-grade corporates worked great (by luck) during down-trend in rates.

    But now, Harris has hired more bond analysts to manages bond sleeve better when rate outlook uncertain - possibly downward move short-term, upward move long-term.

    40% (of total) bond sleeve now is like core-plus - 8.67% (of total) HY and 7.07% NR (of total).

    But do I trust its not-rated (NR) portion as much as those from Pimco, Nuveen, BlackRock? NO!
  • PVMCX still has pretty good but too short reports. The manger has a more or less monthly blog where he opines about investing, but for the last few years it is "everything is too expensive

    Unfortunately since everyone else is getting away with it, even previous loquacious mangers must figure "why bother"?

    Buffet and a few others of his ilk, mainly private investment mangers, still publish yearly letters, which are very interesting, but they usually do not discuss all of the firm's holdings.

    Bloomstran at Semper Augustus publishes a free annual report that is masterful, but only discusses a couple of his holdings

    https://www.semperaugustus.com/clientletter

    Vitaly Katsentelesen runs a similar "value oriented " investment firm and has a good newsletter

    https://imausa.com/about-us-personal-investment-management/

    It is interesting but I wish he would talk more about his stock ideas and less about life lessons etc.
  • So how did the SEC manage to remove those - or some of them anyway?

    It promulgated a new set of fund report/advertising rules, effective Jan 4, 2023, but with required compliance deferred until July 24, 2024.
    Funds will not be permitted to include additional discussions, such as a letter to shareholders from the adviser, interviews with portfolio managers, or a discussion of the general market conditions that are not specific to the applicable fund.
    https://www.mofo.com/resources/insights/221129-sec-requires-tailored-shareholder-reports

    Arguably the dumbing down¹ of fund docs began with summary prospectuses. Make the required doc so brief and devoid of content that uninterested investors might glance at it.

    ¹ I'm happy to use any more "appropriate" word or phrase, but I haven't found one with quite the same level of implicit scorn. "Oversimplifying" may come closest but lacks a certain punch.


    I don't mind them going all-digital

    Oddly enough, the SEC did mind. It figured that these new "streamlined" reports are so small that the funds should always mail them to shareholders unless shareholders affirmatively opt out of the paper reports. Says a lot about how shallow (literally, lightweight) these reports are. See link above.
  • To @yogibb’s point on mutual fund shops. The analyst support at PIMCO is far deeper comparing to those of smaller shops such as Oakmark. Case in point, when Bill Gross, the bond king, left PIMCO and went to Janus Henderson, the equivalent Janus fund to PIMCO Total Return failed miserably. Without the same level of analyst support at Janus, the same strategy that enabled Gross to excel in the past simply evaporated. Gross left Janus shortly.

    I agree annual reports these days are more simplified and lack deep consideration for their investors. I wonder how much of the writing is based on AI these days.
  • I remember that Gabelli Funds were fined because they just posted some reports online and skipped mailing.

    This dumbing down of prospectuses began many years ago when some info was moved to SAIs. Now, we have Summary Prospectuses (dumbest), Prospectuses (not yet dumb) and SAIs (with some useful info well hidden in routine boilerplate disclosers).
  • edited August 10

    The new bond sleeve of OAKBX may be attractive to some.

    Chicago-based Harris is basically a boutique equity shop. It didn't have much analytical capability in bonds. But the old OAKBX with about 60% stocks and 40% in Treasuries/Agencies and investment-grade corporates worked great (by luck) during down-trend in rates.

    But now, Harris has hired more bond analysts to manages bond sleeve better when rate outlook uncertain - possibly downward move short-term, upward move long-term.

    Thanks for the information. There was a third factor in my reluctance to hang on to OAKBX beyond the two reasons I noted.

    Extended Excerpt Morningstar Analysis (OAKBX)

    ”On Jan. 21, 2025, Natixis IM and Generali announced their intention to establish a joint venture between their respective asset-management operations. Under the announced terms, Generali Investments Holding and Natixis Investment Managers would each own 50% of the combined business and have equal voting rights. Woody Bradford, the current CEO of Generali Investment Holding, is slated to serve as CEO of the combined entity, and Philippe Setbon, the current CEO of Natixis IM, as deputy CEO.

    “While the deal is not expected to close until 2026, a merger of this size and complexity is challenging on many fronts. Natixis IM and Generali cited an effort to build critical scale, but other large asset-manager mergers have pursued that objective by fully integrating their investment teams and rationalizing their products to avoid duplication.

    “Such large-scale integration seems improbable here. Natixis had historically afforded its subsidiaries almost complete autonomy in terms of investment processes, hiring decisions, and operations. This has allowed the distinctive investment culture of each affiliate to shine: Stalwarts like Loomis Sayles and Harris Associates (which manages the Oakmark Funds), for example, are true gems in Natixis IM’s lineup. At other times, this hands-off structure was less successful—for example, it proved insufficient to detect or prevent the significant failings that took place at affiliate H2O … “


    Who needs it?
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