Author Archives: David Snowball

About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles.

Manager Changes, February 2020

By David Snowball

Every month we track changes to the management teams of equity, alternative and balanced funds, along with a handful of fixed-income ones. Why “a handful”? Because most fixed-income funds are such sedate creatures, with little performance difference between the top quartile funds and the bottom quartile, that the changes are not consequential. Even in the realms we normally cover, the rise of management committees dilutes the significance of any individual’s departure or arrival.

We tracked down 40 funds with manager changes this month. Special thanks to the folks at Morningstar for sharing their monthly spreadsheet of all major changes in the fund industry with it; it’s an invaluable double-check on the work that Chip, The Shadow and others do in tracking movements in the industry.

Most of the changes are low-key, though it is interesting that Continue reading →

Briefly Noted

By David Snowball

BlackRock gets bitten: Jason Zweig of The Wall Street Journal published a TMZ-worthy piece on a scandal involving BlackRock Income Trust (BIT). BIT is a closed-end fund with $750 million in assets and which, in Jason’s judgment, charges “an arm and a leg” for its services. The fund invested $75 million in “a small, privately held movie company, Aviron Capital LLC.” BlackRock underwrote six of Aviron’s seven films that latest of which, After (2019) cast one of the daughter of one of BlackRock fund’s managers in a lead role.

That does not appear to have been a decision triggered solely by the actor’s on-screen abilities. Mr. Zweig reports: Continue reading →

February 1, 2020

By David Snowball

Dear friends,

Focus, people! Focus!

It’s never wise to focus on just a single trading day, especially one like the last day of January 2020:

Goodness, no. That will surely lead you to all sorts of bad decisions: selling your portfolio, readying Yahoo Finance, rending your garments, drinking a Keystone (or a Natty Bo, a Natty Lite, a Genny Cream…).

God forfend.

One alternative is to focus on stuff that Continue reading →

Biggest Bang for your Buck

By David Snowball

20 Equity funds with the best capture ratios over the entire market cycle

Capture ratio is a sort of “bang for your buck” summary. It’s calculated by dividing a fund’s upside capture (a fund that typically rises 1.1% when the market rises 1% has an upside capture of 1.10) by its downside capture (a fund that typically falls 1.1% when the market falls 1% has a downside capture of 1.10). Capture ratios greater than 1.0 reflect funds that produce more gains than losses; all other things being equal, high capture ratio funds are offering you the greatest reward for every unit of risk you’ve been subjected to.

Capture ratios even the playing field for cautious and aggressive investors. A cautious investor might look for a fund with a downside capture of no more than 0.80. Given that constraint, anything above Continue reading →

FAM Dividend Focus (FAMEX) Prior to 2019, this was FAM Equity-Income, February 2020

By David Snowball

Objective and strategy

The strategy attempts to provide current income as well as long-term capital appreciation by investing primarily in stocks that pay dividends. The managers think of themselves as value investors and attempt to answer the question, “if I could buy the whole company at these prices, would I?” That means calculating its “true business worth” and comparing that to the current stock market cap. They attempt to remain fully invested in stocks and convertibles. They tend to buy mid-caps, though their willingness to let winners run means that Continue reading →

Funds in Reg

By David Snowball

The funds in registration with the SEC in January will launch right around April Fool’s Day. For some, that’s probably foreshadowing.

Two particularly interesting sets of launches:

American Century has debuted two actively-managed, non-transparent ETFs, both with ESG screens.

WCM is launching three new funds, all international, all quality-focused, two explicitly ESG-focused. WCM has a really outstanding, off-the-radar record. The non-ESG versions of these funds are both Continue reading →

Briefly Noted

By David Snowball

Updates

Effective December 31, 2019, founder Bill Nasgovitz resigned as president of the Heartland Funds and retired from its Board of Directors. He was succeeded, on January 1, 2020, by his son Will.

On December 31, 2019, founder James Oelschlager and his wife Vanita, the owners of Oak Associates, completed the transaction to sell substantially all of their ownership interest to a group led by members of their management team

A quick congratulations to Dennis Baran for being sharp-eyed and active. In December, our Elevator Talk focused on Joe Shaposhnik of the entirely-excellent TCW New America Premier Equities (TGUSX). Dennis, the author of several fine fund profiles for us, was intrigued by what he read, investigated and discovered that while Continue reading →

January 1, 2020

By David Snowball

Dear friends,

Welcome to the New Year. May it be blessed and joyful, full of mirth and mischief (really, what’s life without a bit of mischief?) for us all.

As I finish this essay on New Year’s Eve Day, the stock market is handing out returns with the enthusiasm (and responsibility) of a politician handing out tax cuts or a central banker handing out liquidity boosts. The Vanguard Total Stock Market Index (VTSMX) stands to end the year with a 30% gain.

Heck, it was almost impossible Continue reading →

“We’re here because you’re looking for the best of the best of the best, sir!”

By David Snowball

When I first started writing regularly about funds and investing, it was as an analyst for FundAlarm, a site whose publisher proclaimed

Our view of the mutual fund industry is slightly off-center. We help you decide when it’s time to sell a fund, instead of when it’s time to buy. The mutual fund industry is full of broken promises, arrogance, greed, hypocrisy — the list goes on. We try to shine a light in the darker corners, and poke holes in balloons that could use some poking.

In honoring that heritage, we routinely Continue reading →

In celebration of Ted Didesch (1937-2019)

By David Snowball

On 9 December 2019, the longest-tenured member of the MFO Discussion Board passed away. Theodore J. Didesch, universally known as “Ted” though he dearly wished for the sobriquet “The Linkster,” died of congestive heart failure.

We mourn his passing even as we celebrate his life. I’d like to share a few words about Ted, interspersed with the comments left by other members of our community on a memorial thread.

FundAlarm launched its “moderated Bulletin Board” in 1998. Ted arrived Continue reading →