Active management, as a discipline, is hard.
Active management, as a sustainable business, is harder.
Active management, as a sustainable business run by an independent investment boutique, no matter how skilled, is crazy hard, getting crazier and getting harder.
When, on top of all that, it feels like a megalithic corporation has it out for you, you’d surely feel like it’s time to surrender and put Sisyphus on the Continue reading
Investors are pulled by three competing forces just now.
Longest bull market in US history. Valuations, based on 10-year CAPE or Shiller average, have only been higher twice in market history: 1929 and 2000. Record earnings, which make stocks look cheaper, are starting to wobble. Economic policy is being made by tweet by a guy still in his jammies. Trade war. Brexit. $1,200,000,000,000 federal budget Continue reading
I’m inured to stupid stories (“12% annual returns from a three-stock portfolio allow smart investors to retire at age 24 with $12 million!”) originating from “financial journalists” that no one has ever heard of. Those folks exist because the news hole has become a black hole.
The “news hole” is the amount of space, in a newspaper or magazine, or time, in a news broadcast, available for the news of the day. It used to be a constraining factor: if you only have 23 minutes (or 400 column inches) a day available, you had to make editorial judgments about what was Continue reading
On May 21, 2019, Vanguard launched its Global ESG Select Stock Fund (VEIGX/VESGX). The fund is subadvised by Wellington Management. It is Vanguard’s fourth socially-screened product after FTSE Social Index (VFTSX), ESG U.S. Stock ETF (ESGV) and ESG International Stock ETF (VSGX). Vanguard funds sponge up money pretty promptly: Social Index, launched in 2000, has $5.6 billion but the domestic and international ETFs are under a year old and have gathered $570 million and $380 million, respectively. Morningstar likes them all.
Matthew Brancato of Vanguard claims the fund “is taking a distinctive approach to ESG investing, seeking long-term outperformance through the selection of companies that integrate leading ESG practices into Continue reading
The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. Most funds currently in registration will become available by mid-October.
Eighteen new funds, available just in time for Halloween! Spoooky!
Most of the buzz surrounds the new line of Avantis active ETFs. Avantis is the product of a collaboration between American Century Investments and long-time Dimensional Fund Advisor (DFA) managers. DFA probably invented Continue reading
The ETF industry has continued to distinguish itself for its almost laughable me-tooism. The themes of the day are marijuana (ETFMG Alternative Harvest ETF MJ, AdvisorShares Pure Cannabis ETF YOLO, AdvisorShares Vice ETF ACT which splits time between tobacco, pot and alcohol, The Cannabis ETF THCX, Cambria Cannabis ETF TOKE, Amplify Seymour Cannabis ETF CNBS, Cannabis Growth Opportunity Corp CWWBF) and pets (and pet parents). There are even articles now on the top marijuana ETFs for 2019 and the best marijuana ETFs for conservative portfolios. Uhhh … note to conservative investors, (1) the oldest and largest of these ETFs substantially trails the Vanguard Total Stock Market over the past three years yet has triple the volatility and (2) possession of marijuana is still a federal crime. Continue reading
Dear friends,
It’s not yet the height of summer, but it’s starting to feel like it at Augustana. Our summer classes, held only in June, have ended and the hubbub of the new year is still a distant cloud on the horizon. I visit campus to catch up on my reading – it’s what scholars do – and to pursue bits and pieces of administrative work for my dean. Rather than camp in my office all day, I wander around at lunchtime and recently discovered our always-bustling patio and picnic lawn look Continue reading
Active ETFs are a sort of hybrid between more-traditional ETFs and actively-managed mutual funds. Like traditional ETFs, they trade on the secondary market which means that the advisor doesn’t need to keep cash on hand in order to meet day-to-day withdrawal needs. Some of the expenses traditionally borne by the advisor either don’t exist (ETFs have fewer shareholder reports than, by law, mutual funds do) or are shifted to the brokerage firm. They also offer a structural tax advantage: shareholders aren’t responsible for the yearly tax consequences (and record-keeping) of the manager’s moves; shareholders are taxed only when they Continue reading
On May 23, 2019, Harbor Capital Advisors did a hard reset on Harbor International Small Cap (HIISX). Over its first three years, the fund’s returns trailed nearly three-quarters of its peers with only a tiny bit less volatility. Harbor chose to empanel a new subadvisor, Cedar Street Asset Management which was founded in April of 2016, is an employee-owned investment management firm and has $220 million in assets under management as of May 31, 2019. Since Cedar Street brings a distinct strategy that has little in common with their predecessors, MFO classifies this as Continue reading
On April 30, 2019, Palm Valley Capital Management launched their first, and likely only, fund: Palm Valley Capital Fund (PVCMX). The managers are seeking long-term total return. The plan is to invest in a compact portfolio of high-quality, substantially undervalued small cap stocks.
Their goal is to provide “an attractive Continue reading