Launch Alert: Cognios Large Cap Value Fund (COGLX & COGVX)

By David Snowball

On October 3, 2016, Cognios Capital launched Cognios Large Cap Value Fund, which represents the “long” sleeve of its long-short flagship fund, Cognios Market Neutral Large Cap Fund (COGMX/COGIX). They launched the fund in response to requests from existing clients, mostly investment advisors, who wanted easy access to the long-only option. Cognios waited until mid-December to publicize the fund’s launch.

They target high-quality value stocks, rather than growth ones. They use a quantitative screen called ROTA/ROME. ROTA (Return on Tangible Assets) is a way of identifying high-quality businesses. At base, it measures a Continue reading →

Updates

By David Snowball

PIMCO pays up

PIMCO has agreed to write to $19.8 million check to resolve a long-running enforcement action initiated by the SEC. The short version: PIMCO launched PIMCO Total Return ETF (BOND), one of the earliest actively-managed ETFs, in 2012. Early performance was eye-opening, since the ETF outperformed PIMCO’s $175 billion flagship Total Return Fund (PTTRX). It turns out that the outperformance was achieved by mispricing 43 of the fund’s 156 holdings and was supported by “other, misleading reasons” offered for the fund’s success.  PIMCO’s description speaks of “43 smaller-sized positions of non-agency mortgage-backed securities using third-party vendor prices, as well as PIMCO’s policies and procedures related to these matters.”

Jaffe on the move

Chuck Jaffe has announced his imminent Continue reading →

Briefly Noted

By David Snowball

SMALL WINS FOR INVESTORS

Effective January 1, 2017, the management fee for AMG River Road Long-Short Fund (ARLSX, formerly ASTON/River Road Long-Short Fund) will be reduced from 1.10% to 0.85% . At the same time AMG River Road Select Value Fund (ARSMX, formerly ASTON/River Road Select Value Fund) drops from 0.9 to 0.75%. In both cases, the total e.r. then falls as well.

AQR Global (AQGNX) and International Equity Funds (AQINX) have reduced their expense ratios by 10 and 5 basis points, respectively.

Ariel has lowered fees on both International (AINTX) and Continue reading →

December 1, 2016

By David Snowball

What a busy month.

On Monday, November 21, four U.S. stock indexes all reached all-time highs: the S&P 500, Dow, Russell 2000 and Nasdaq; it might be that the S&P Midcap 400 did the same, but that’s less clear to me. That feat was last accomplished on December 31, 1999. The coincidence led Chip, our estimable tech director, to launch into a spirited rendition of Prince’s “1999”:

I was dreamin’ when I wrote this
Forgive me if it goes astray
But when I woke up this mornin’
Could of sworn it was judgment day

The sky was all purple
There were people runnin’ everywhere
Tryin’ to run from the destruction
You know I didn’t even care

‘Cause they say two thousand zero zero
Party over, oops out of time
So tonight I’m gonna party like it’s 1999

I was dreamin’ when I wrote this
So sue me if I go too fast
But life is just a party
And parties weren’t meant to last

Continue reading →

Behind Door Number Two Is?

By Edward A. Studzinski

 

“I and my public understand each other very well: it does not hear what I say, and I don’t say what it wants to hear.”

Karl Kraus

I recently had occasion to read proxy materials for San Juan Basin Royalty Trust. The issue involved an attempt to remove the current trustee, Compass Bank, the successor to TexasBank, which had been acquired by Compass, with Southwest Bank. The story is a recurring one in banking – a smaller local institution gets gobbled up by Continue reading →

Trump, Bonds, and Inflation

By Leigh Walzer

(Making Your Portfolio Great Again)

The election 3 weeks ago ushered in a new investment paradigm.  To Make America Great Again, President-elect Trump is committed to lower taxes, run large deficits, and spent trillions on infrastructure. Trump is no friend of the bond market, and judging by the steep decline in bond prices over the following week, the feeling is mutual. Bondholders took note when Mr. Trump bragged on CNBC back in May that he had a lot of experience negotiating with bondholders which he could bring to bear in addressing the government’s debts.  But they were probably more spooked by the subsequent clarification that the government would never default because it could Continue reading →

A Low Cost Alternative To One USAA Managed Portfolio

By Charles Boccadoro

USAA was founded in San Antonio, Texas, when 25 Army officers decided to insure each other’s automobiles. The year was 1922. Its original name: United States Army Automobile Association. Today, USAA stands for United Services Automobile Association – a Fortune 500 diversified financial services organization that caters to US military personnel and families. It has more than 11 million members. Its chairman is retired General Lester Lyles. Why choose to invest with USAA? “Military Values: Our disciplined approach stems from our military values of service, loyalty, honesty and integrity.” Continue reading →

The three coolest studies of 2016

By David Snowball

There are scholars whose entire lives are consumed by the need to study mutual funds. Not “study” in the carefree way I do or the deeply-tainted way that marketing-driven organizations do, but “study” with considerable rigor, sophisticated tools and a willingness to struggle with complexity.

While much of the content of these studies is inaccessible to Continue reading →

Tributary Small Company (FOSCX), December 2016

By David Snowball

Objective and strategy

The fund pursues long-term capital appreciation. They invest in a portfolio of 60-70 small-cap stocks, mostly domiciled in the U.S. Their fundamental approach is value-oriented and broadly diversified across economic sectors. In general, each position in the portfolio starts out about equally weighted; 50 of the 65 current holdings are each between 1-2% of the portfolio. They hold minimal cash, currently about 4%. Portfolio turnover is in the range of 25-35%, far below the small cap average.   Continue reading →

What Are You Thankful For?

By Mark Wilson

What Are You Thankful For?

Thanksgiving is my favorite holiday.  We get four days off, gather with our family and friends, and prepare and eat (hopefully) good food.  All of this without the extra “stresses” of the 4th of July or (at our house) Christmas.

Once everyone is seated around the dining room table, we wait for my father-in-law to ask the question “Can we go around the table and each share what we are thankful for?”  This is a longstanding tradition and another reason why I enjoy the holiday.  It’s great to hear answers ranging from “our family’s health” and “Uncle Russ has joined us” to “cranberry sauce!” and “the turkey is Continue reading →