MFO Premium Webinar

By Charles Boccadoro

On Wednesday January 15th, we will host a webinar discussing latest features of the MFO Premium search tool site. Topics covered will include the new home page and user portal, the MultiSearch Portfolios tool, updated metrics for risk adverse investors, expense rating, expanded category averages, revised “Include Averages and Benchmarks” options, and finally allocation indices across ten decades.  

There will be two sessions, one at 11 am Pacific time (2pm Eastern) and one at 2pm Pacific time (5pm Eastern). The webinar will be enabled by Zoom. Please use the following links Continue reading →

Funds In Registration

By David Snowball

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 not become available until late February.

We found 24 funds in the pipeline. What stands out is Continue reading →

Briefly Noted

By David Snowball

Updates

Seafarer thrills! Russ Kinnel, anyway. Russ’s December 30th “The Thrilling 34” article sought to create “a short list of outstanding funds accessible to individual investors.” The plan was to screen for the more important investment factors, “and let them do the weeding for me.”  They are

  • Expense ratio in the category’s cheapest quintile.
  • Manager investment of more than $1 million in the fund.
  • Morningstar Risk rating below the High level.
  • Morningstar Analyst Rating of Bronze or higher.
  • Parent rating better than average/neutral.
  • Returns above the fund’s benchmark for a minimum of five years.
  • Must be a share class accessible to individual investors

On a list dominated by Continue reading →

December 1, 2019

By David Snowball

Dear friends,

Welcome to the last 2019 issue of Mutual Fund Observer. Thanks for being here.

There’s rather a lot going on with this month’s issue whose theme might be “get some perspective while it’s still possible.” We’ll talk a bit about preparing for less hospitable markets. Vanguard’s Total Stock Market Index is up 27% YTD without a notable stumble along the way; it simply doesn’t get more hospitable. Since the economy, earnings and CPI didn’t grow by anywhere near that much, most of the gain comes from “multiple expansion,” the willingness of investors to pay more today than they did yesterday for the same thing. Vanguard itself is not Continue reading →

MFO’s Portfolio Pruning Primer

By David Snowball

We’re near year’s end, decade’s end, and quite possibly the bull market’s end and the economic expansion’s end. It’s been easy to be a bad investor for the past 10 years: the market’s relentless rise, fueled by enormous amounts of fiscal (hello, trillion-dollar deficits!) and monetary (hello, negative real interest rates!) stimulus, had made it likely that even a badly constructed portfolio booked acceptable – perhaps even double-digit – returns.

Do not bet your future on a repeat of that happy pattern.

The Observer’s core beliefs are (1) valuations Continue reading →

Liquidity Risks and Warnings

By David Snowball

What’s the worst that could happen? Managers’ own words on liquidity risks

Liquidity seems like an awfully esoteric concern, something akin to “coverage ratios” or “yield to call calculations.” In general, it feels like background noise.

Your fund managers disagree. New research estimates that 50% of high-yield funds and, more importantly, 15% of all fixed-income funds are vulnerable to a liquidity crunch. To understand what that means, you first need to understand that “liquidity” means. If you need to polish up your understanding of the term – or your ability to explain it to clients – start with the section entitled What’s Liquidity? If you’re rock solid on the concept, then jump ahead to Welcome to a Liquidity Crisis. Continue reading →

Business Cycle Portfolio Strategy

By Charles Lynn Bolin

The mere fact that a belief is common and comfortable does not make it true. Accepting such beliefs makes you part of “the herd,” which is good only when the herd is thriving. But when the herd faces serious threats from hostile changes in their environment, whether it’s drought or wolves, the last thing you want is to have your survival tied tightly to the herd’s.

That holds true in investing, as well as in pastures.

Two such errors animate this month’s essay. First, there appears to be Continue reading →

Rearranging the Deck Chairs

By Edward A. Studzinski

Democracy is grounded upon so childish a complex of fallacies that they must be protected by a rigid system of taboos, else even half-wits would argue it to pieces. Its first concern must thus be to penalize the free play of ideas. In the United States, this is not only its first concern, but also its last concern.

Henry Louis Mencken, In Defense of Women (1918)

We are at that time of year when people should be Continue reading →