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Akre Focus performed well while Chuck Akre managed the fund. It delivered strong returns with relatively low volatility. After Chuck Akre retired in 2020, all experienced investment personnel left except for John Neff. Neff was backed by two somewhat new analysts. Akre Focus isn't the same fund now...
Did Chuck really hold tech stocks though? It is a quality value fund so even in Chuck’s prime in this market I don’t think it would have done much better.
AKRIX was a suggestion from an advisor several years back and I've been generally happy with its moderate, consistent performance. The CGs have been consistent as well for the past 5 years.
Question for anyone who has experienced an MF to ETF conversion: Are the divs distributed over the year anything compared to the prior EOY CGs?
I guess we'll see. The board seems overwhelmingly supportive of the ETF conversion.
As a final gift to shareholders before it morphs into an ETF, AKRIX distributed a CG of $3.02/sh this week. I presume only divs (quarterly?) moving forward and no more xaction fees.
The Akre folks have sent me emails and letters urging me to vote on the proposal to convert this mutual fund to an ETF. Perhaps they are worried about having enough votes.
I don't really understand any pros or cons, other than being able to trade shares at times other than the days closing price. I've tried reading the official proxy documents and that doesn't help me. In fact, the tone of the proxy is so dictatorial that it turns me off. Two troublesome items: (1) An owner of shares must hold them in a brokerage account which allows for ETF shares; if not, they'll give you some time to open such a account. If you still do not comply, they'll liquidate your shares and send you the proceeds (and I suppose congratulate you on paying capital gains taxes). (2) the Proxy doesn't make any predictions about amount of distributions compared to past amounts. Your basis is never mentioned -- figure it out for yourself on the day of conversion, I guess.
I'm leaning toward NO (like my few shares will make a difference). David
There are two different dimensions to the question of pros and cons: 1) ETFs vs mutual funds generally, and 2) Conversion benefits specific to this fund
the Reorganization will offer: (a) the ETF a better opportunity to grow its asset base by expanding its pool of potential investors;
This is a fund with $12B AUM. It does not need to grow assets. It is a concentrated fund (under a score of holdings); it will not use additional assets for diversification.
IMHO this rationale is spin. As Observant noted, this is not the Akre fund of old. More specifically, it's landed in the bottom quarter in 2023, 2024, and 2025 (YTD). It has been bleeding cash, a lot and pretty consistently, since 2021. https://www.morningstar.com/funds/xnas/akrix/performance
This is not a change to grow assets; it's a change to stanch outflows.
As to the former (ETFs vs mutual funds generally):
- investors do have to hold ETF shares in a brokerage account vs. mutual fund direct ownership or ownership on a fund-only platform. For most people (except those holding the fund in fund-only 401(k)s), this is a one-time minor inconvenience.
- costs usually go down (here, from 1.06 for AKRIX to 0.98% for the ETF) - holdings will be posted daily (here, on the Akre ETF website) - IMHO advantageous primarily for frequent traders - improved tax efficiency - reduced or eliminated capital gains distributions - advantageous if held in taxable accounts - tracking error introduced - ETFs may trade for (slightly) more or less than the value of their underlying portfolios - trading costs introduced - bid/ask spread and mini-microscopic Section 31 (SEC) fee upon sale - trading costs eliminated - AKRIX usually incurs a brokerage TF - ease of access - virtually all brokerages will carry the ETF vs limited selection of brokerages for AKRIX - not significant for those already owning AKRIX - ETFs are marginable
Finally with respect to income (vs. cap gains) divs - these should go up slightly. Fund costs are subtracted from divs before they are paid out. So as costs decrease, net divs go up. This should be considered a good thing.
IMHO this rationale is spin. As Observant noted, this is not the Akre fund of old. More specifically, it's landed in the bottom quarter in 2023, 2024, and 2025 (YTD). It has been bleeding cash, a lot and pretty consistently, since 2021.
In 2023, AKRIX had a solid 24.3% performance with a $2/share CG. Bottom quarter? 2024/2025 have been less productive with $3+/share CG, but the price point has been sitting at an all-time high, following the market. The CGs seem to represent a consistent "bleed" since the dire 2022, but it doesn't appear to be a desperate bleed. $12B AUM is solid.
Interesting summary of the proxy. Thx. I think the "good things" matter more, especially since it resides snugly in a retirement account. Will investors be encouraged more by the changes? I've never been through a MF-to-ETF conversion, but I'm looking forward to it as many investing challenges await us in the coming years.
Comments
It delivered strong returns with relatively low volatility.
After Chuck Akre retired in 2020, all experienced investment personnel left except for John Neff.
Neff was backed by two somewhat new analysts.
Akre Focus isn't the same fund now...
BTW, just voted on ETF conversion.
Question for anyone who has experienced an MF to ETF conversion: Are the divs distributed over the year anything compared to the prior EOY CGs?
I guess we'll see. The board seems overwhelmingly supportive of the ETF conversion.
https://www.sec.gov/Archives/edgar/data/811030/000089418925005619/combined485a.htm
Perhaps they are worried about having enough votes.
I don't really understand any pros or cons, other than being able to trade shares at times other than the days closing price.
I've tried reading the official proxy documents and that doesn't help me. In fact, the tone of the proxy is so dictatorial that it turns me off.
Two troublesome items:
(1) An owner of shares must hold them in a brokerage account which allows for ETF shares; if not, they'll give you some time to open such a account. If you still do not comply, they'll liquidate your shares and send you the proceeds (and I suppose congratulate you on paying capital gains taxes).
(2) the Proxy doesn't make any predictions about amount of distributions compared to past amounts. Your basis is never mentioned -- figure it out for yourself on the day of conversion, I guess.
I'm leaning toward NO (like my few shares will make a difference).
David
1) ETFs vs mutual funds generally, and
2) Conversion benefits specific to this fund
As to the latter, reading the proxy helps.
https://www.akrefund.com/documents/proxy/
The very first rationale given is: This is a fund with $12B AUM. It does not need to grow assets. It is a concentrated fund (under a score of holdings); it will not use additional assets for diversification.
IMHO this rationale is spin. As Observant noted, this is not the Akre fund of old. More specifically, it's landed in the bottom quarter in 2023, 2024, and 2025 (YTD). It has been bleeding cash, a lot and pretty consistently, since 2021.
https://www.morningstar.com/funds/xnas/akrix/performance
This is not a change to grow assets; it's a change to stanch outflows.
As to the former (ETFs vs mutual funds generally):
- investors do have to hold ETF shares in a brokerage account vs. mutual fund direct ownership or ownership on a fund-only platform. For most people (except those holding the fund in fund-only 401(k)s), this is a one-time minor inconvenience.
- costs usually go down (here, from 1.06 for AKRIX to 0.98% for the ETF)
- holdings will be posted daily (here, on the Akre ETF website) - IMHO advantageous primarily for frequent traders
- improved tax efficiency - reduced or eliminated capital gains distributions - advantageous if held in taxable accounts
- tracking error introduced - ETFs may trade for (slightly) more or less than the value of their underlying portfolios
- trading costs introduced - bid/ask spread and mini-microscopic Section 31 (SEC) fee upon sale
- trading costs eliminated - AKRIX usually incurs a brokerage TF
- ease of access - virtually all brokerages will carry the ETF vs limited selection of brokerages for AKRIX - not significant for those already owning AKRIX
- ETFs are marginable
Finally with respect to income (vs. cap gains) divs - these should go up slightly. Fund costs are subtracted from divs before they are paid out. So as costs decrease, net divs go up. This should be considered a good thing.
Interesting summary of the proxy. Thx. I think the "good things" matter more, especially since it resides snugly in a retirement account. Will investors be encouraged more by the changes? I've never been through a MF-to-ETF conversion, but I'm looking forward to it as many investing challenges await us in the coming years.