Planning a Rewarding Retirement, Part 2: Can I Afford to Retire?

By Robert Cochran

This is the second in a series of articles. 

Over 36 years of providing a financial advice, I have heard a number of clients tell me, “You will know when it’s time to retire.” My original plan was to work until I turn 70, since I truly love what I do. Over the last couple of years, however, a number of friends, relatives, and colleagues have passed away rather suddenly, or they developed chronic health issues that will greatly limit their quality of life. This caused me to re-consider my retirement timeline, especially in light of what my wife and I would like to do over the next ten years. I will be 67 in September of this year. It’s time.

As an owner of a small business, it’s easy to think Continue reading →

Has your fund been left behind by Morningstar?

By David Snowball

If so, you’re not alone.

There are hundreds of funds which Morningstar once covered that they can no longer afford to follow.  Morningstar started as seven guys working out of Joe Mansueto’s apartment. They’re now a publicly-traded global corporation with 3900 employees and $130 billion in assets under management (or advisement). More importantly, they’re a corporation with $600 million in annual expenses.

If you’ve got $600 million in bills, you really need more than $600 million in income and you don’t get that by worrying about small funds that aren’t on most advisors’ radar, especially when the entire universe of active funds is contracting.  Morningstar explains the rules this way, “We’re committed to covering those investments that are most relevant to investors and that hold a significant portion of industry assets.” In this case, “relevant” is pretty much Continue reading →

Homestead Growth (HNASX), March 2017

By David Snowball

Objective and strategy

The fund seeks long-term capital appreciation by investing, primarily, in domestic large cap growth stocks. The portfolio is diversified (typically 60-75 names) but not sprawling. Direct foreign investment is currently about 5.6%, which is modest but also above-average for its Morningstar peer group.

In general, the fund’s subadvisor T. Rowe Price targets:

  • companies with characteristics that support sustainable double-digit earnings growth and
  • high-quality earnings, strong free cash flow growth, shareholder-oriented management, and rational competitive environments

Their preference is for firms with a lucrative and defensible niche which allows them to Continue reading →

Pin Oak Equity (POGSX), March 2017

By David Snowball

Objective and strategy

Pin Oak is a concentrated, all-cap fund. The portfolio currently holds 35 securities with much more exposure to small- and mid-cap stocks than its peers Portfolio construction begins with macro-level assessments of the economy, proceeds to analyses of industries and sectors, and then ends by buying and holding the most attractive stocks in the most attractive sectors. Oak Associates has a long and adamant tradition in favor of buying-and-holding just a few best-of-class stocks, so turnover is generally below 20%. Half of the portfolio’s 35 current stocks have been there for between five and 15 years.

Adviser

Oak Associates, ltd. Founded in 1985 and headquartered in Continue reading →

Elevator Talk: Paul Espinosa, Seafarer Overseas Value (SFVLX/SIVLX)

By David Snowball

Since the number of funds we can cover in-depth is smaller than the number of funds worthy of in-depth coverage, we’ve decided to offer one or two managers each month the opportunity to make a 200 word pitch to you. That’s about the number of words a slightly-manic elevator companion could share in a minute and a half. In each case, I’ve promised to offer a quick capsule of the fund and a link back to the fund’s site. Other than that, they’ve got 200 words and precisely as much of your time and attention as you’re willing to share. These aren’t endorsements; they’re opportunities to learn more.

Paul Espinosa is the Lead Portfolio Manager of the Seafarer Overseas Value Fund and a co-manager of the Seafarer Overseas Growth and Income Fund (SFGIX/SIGIX). Paul joined Seafarer Capital Partners in 2014. Before that, he spent Continue reading →

Launch Alert: Polen International Growth Fund (POIRX/POIIX)

By David Snowball

On December 30, 2016, Polen Capital Management launched Polen International Growth Fund (POIIX). The fund is an international extension of the high-conviction strategy behind Polen Growth (POLRX/POLIX) and Polen Global Growth (PGIRX/PGIIX). Polen has over $9 billion in assets under management and is located in Boca Raton, Florida, “far away from the short-term pressures of Wall Street.”

The fund will typically invest in 25 to 35 large cap international stocks, including those domiciled in both developed and developing markets. It might, from time to time, dabble in a few mid-cap names. The manager will focus on Continue reading →

Prelaunch Alert: T. Rowe Price U.S. High Yield Fund

By David Snowball

On February 27, 2017, T. Rowe Price announced their plans to acquire and rebrand a very solid young high-yield bond fund. The rechristened offering will be available by the end of May, 2017.

The adopted fund is Henderson High Yield Opportunities Fund (HYOAX/HYOIX). The Henderson fund has just $61 million in assets and a four-year track record. It’s managed by Kevin Loome, who spent 11 years as a high-yield analyst at Price before leaving to become Head of High Yield Investment at Delaware Investments (which has $167 billion in assets under management) then Head of U.S. Credit at Henderson Global Investors NA, the U.S. subsidiary of Continue reading →

Manager changes, February 2017

By Chip

It’s a quiet month on the manager change front. While nominally there’s a greater deal of management turnover in a given year, practically most of it is insignificant because the 27th member of a team leaves and is replaced by an equally adept newbie. This is one of those months. We’ve identified 35 manager changes this month, few involving the installation of an entire new team and only two or three affecting “household names.”

Because bond fund managers, traditionally, had made relatively modest impacts of their funds’ absolute returns, Manager Changes typically highlights changes in equity and hybrid funds. Continue reading →

Briefly Noted . . .

By David Snowball

Updates

Stay of execution: the Mirae Asset Asia Fund (MALAX) and Emerging Markets Fund (MALGX) were both scheduled for liquidation. “[A]fter further consideration,” the Board changed its mind. Both are very solid little funds, with an emphasis on the “little.” They have $25 million in assets between them after almost seven years of operation. At the same time, both are four-star funds with the same manager and both are distinguished by capturing a bit less of the downside and a bit more of the upside than their peers. The question remains whether, given the current infatuation with passive funds, that will ever be enough for the funds to reach economic viability. Continue reading →

February 1, 2017

By David Snowball

Dear friends,

I’m sorry we were late to the party, but glad that you’re here. We had a rough start to February. Our estimable technical director Chip had a bad fall at work which took her out for three days. Just as we were preparing for launch, our site was vandalized by what appears to be an Indonesian hacking collaborative. Then as we thought we’d undone the damage and settled back to work, they slipped in again. (To be clear: you’re safe. We collect neither personal nor tracking information. Any financial stuff goes through Amazon and PayPal, groups that can pay for security obsessiveness. Mostly they seemed interested in vandalism for the sake of “bragging rights.”)

And then, to top it off, Mr. Trump was president. Continue reading →