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Mutual Fund Observer by David Snowball - 2w ago

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 a bit quiet.

I approve.

As many of you know, Chip and I celebrated the beginning of summer with a ten-day jaunt around Ireland. Many of you celebrated our departure (hmmmm…) and others offered tips on sights, restaurants and music. We’re deeply grateful to you all, and vastly enjoyed the trip. We essayed to share some of the highlights in a photo-essay, Around the Island in Eleven Days with a thoughtful appendix, Tips for Traveling in Ireland. We hope you enjoy both and are emboldened in your own adventuring!

Summertime with T. Rowe Price

T. Rowe Price is my preferred retirement firm. Their work on asset allocation strikes me as way ahead of the pack, they have stable management teams, sensible strategies and an aversion to taking silly risks. Morningstar avers, “T. Rowe Price remains best-in-class.”

Four mid-summer T. Rowe notes.

  1. I’ve finished cleaning my retirement portfolio. The portion under my control is invested primarily in T. Rowe Price Retirement 2025 (TRRHX), T. Rowe Price Emerging Markets Discovery Stock (PRIJX, formerly TRP EM Value) and Spectrum Income (RPSIX).

    As many of you know, changes in Augustana’s retirement plan meant that I could no longer invest in T. Rowe or Fidelity. I prefer simplicity so it made sense to consolidate and, between the two, I far prefer T. Rowe. Fidelity forever seems to be scrambling to expand The Fidelity Empire, T. Rowe seems to be focused on managing my portfolio. So I moved money from Fidelity to T. Rowe.

    For a market in which there were no obvious pockets of value, picking a good target-date retirement fund made sense. Price offers two series, one more cautious and the other more venturesome. I went with venturesome. In June, I eliminated almost all of my individual fund positions since most were already part of the TRRHX portfolio (great minds think alike). That said, I have maintained two equal-sized side bets: Emerging Markets Discovery because every projection for the next 5-10 years says that the emerging markets will outperform and I’m most comfortable with a value orientation and Spectrum Income as a sort of volatility hedge on EM Discovery.

    There are 15 retirement date funds that have existed through this entire market cycle; counting newer funds, there are 57 options now available. In comparison with the 15 funds with the longest records, TRRHX shows a risk-return pattern that I’m comfortable with.

      Value Total Stock Market Rank out of 15 Range within the group
    Annual percentage return 5.3% 7.4 1st 2.9 – 5.3%
    Standard deviation 13.4 15.6 14th 9.7 – 14.1
    Sharpe ratio 0.35 0.43 4th 0.18 – 0.44
  2. I’m opening a Roth IRA for my 18-year-0ld. There is not yet a Retirement 2070 fund (oh, dear God, 2070) so our plan is to invest $1,000, likely in T. Rowe Price Global Allocation (RPGAX), Price’s most wide-ranging fund of funds. The base allocation is 30% US equity, 30% international equity, 30% income and 10% alternative investments. It uses other T Rowe Price funds for its income and EM exposure, but invests directly in US and developed market stocks.

    I know that with a 50 year time horizon, it pays to be aggressive. That said, I wonder a lot about what asset class to bet on for an investment that likely won’t be redeemed until I’m … well, working for that Great Blogger in the Sky. The most recent factsheet shows that the fund has a larger-than-normal hedge.

    With no further additions, assuming a 7% rate of return, that $1,000 will grow to $25,000 at Will’s retirement. At 10%, it would be worth about $110,000.

  3. Give up your obsession with “beating the market”! It’s corrosive, stupid and unproductive. Just sayin’.

    A criticism of active funds is that so few of them “beat the market,” much less beat it consistently. The best rejoinder is: why on earth do you care? Beating the market is relevant if and only if your portfolio goal isn’t “live a comfortable life” or “gain financial security” but, instead, is “have something to brag to the guys about.”

    What would it take to beat the market? One answer is, “anything over 4.8%” because that’s all you would have earned over the course of the current century: an investment in the S&P 500 made on January 1, 2000 would have grown, on average, by 4.8% through the end of 2018. And, as it turns out, 4.8% a year probably won’t meet any of those other “good life” goals.

    The other answer is, “a sensible, diversified portfolio with minimal exposure to stocks.” The chart below compares the returns of T. Rowe Price Spectrum Income (RPSIX), which I hold in both personal and retirement accounts, with the mighty S&P 500. As it turns out, over the course of this century, slow-and-steady has been winning the race. “Beating the market” has been illusory and unprofitable.

  4. T. Rowe channels their inner rock star: “It’s not time to be a hero

    “Markets are near highs and risks are rising, so it’s not time to be a hero. It’s a good time to be diversified, invest strategically, and have your shopping list ready in case stocks pull back and go on sale.” Rob Sharps, head of investments and group chief investment officer, T. Rowe Price , June 2019 .

    That sounds, on whole, both eminently sensible and eminently T. Rowe. If you were meaning to look at your portfolio in January with an eye to rebalancing but didn’t, you should move now. Domestic stocks have roared, your allocation is further out of balance than ever and, with it, your risk exposure might be way higher than you intend.

Thanks, as ever

… to our faithful subscribers, Doug, Deborah, Greg, William, Brian, Seshadri and David; to our new donors W.E. Sperry and Francis; and our long-time friend and contributor, David Moran. You all make a difference, both fiscal and spiritual.

As ever, 

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Mutual Fund Observer by Edward A. Studzinski - 2w ago

“In wartime, truth is so precious that she should always be attended by a bodyguard of lies.” Winston S. Churchill to Josef Stalin, concerning plans for coordinated deception, at a party celebrating Churchill’s 69th birthday, 30 November 1943

The second quarter of the year has provided investors with a variety of results, as well as a variety of interesting stories. One of the greater debates has been about the value of individual, active investment managers versus the alternative of passive investing, relying on a low (or lower depending upon the firm) cost approach to equity investment. Subsumed within this debate has been the question of whether the day of value investing has passed, as a world of again declining interest rates and the anticipated return of central banks to quantitative easing permanently results in a world that favors growth over value.

In that vein, the Financial Times of London in the weekend issue of June 8/June 9 of this year ran a long piece on asset management concerning the travails and potential downfall of star UK stock picker Neil Woodford. The FT argued in sum that the risks of placing too much faith in the skills of a star stock picker were underestimated. At the same time, the arguments in favor of active fund managers were sometimes undercut by the often unconstrained and undisciplined antics of star managers.

In the UK, Woodford was accorded cult-like status because of his performance record, a Buffett for retail investors. That followed from a performance track record built up over twenty-six years at UK asset manager Invesco Perpetual. That record gave Mr. Woodford the confidence to depart Invesco Perpetual and set up his own firm some five years ago, Woodford Investment Management. With the perspective of hindsight, some would say that the seeds of the firm’s present difficulties were sown at the inception of the new business.

Initially, assets flowed in and the performance at the new Equity Income Fund beat its benchmark. But as the assets under management grew, Woodford found it necessary to look further afield for investment opportunities, taking stakes in small and midcap companies. This was a major investment philosophy change from what had garnered his reputation to begin with, which was out of favor, large cap blue chip companies.

Another problem was that in his own company there were fewer restraints (the better angels) upon Mr. Woodford’s investment decisions. At a large company like Invesco, there were many compliance rules and compliance personnel overseeing those rules. Not so at Woodford Investment Management according to the FT, where those raising objections to strategy or implementation found themselves ignored or exiled. As performance lagged, a familiar story to some of us took place, with financial advisors pulling client accounts and funds. This led to the selling of liquid investments to meet the redemptions. Over a short period of time, the illiquid investments in the Equity Income Fund reached a point of potentially breaching certain rules for illiquid investments. This ultimately led to a decision by the firm to bar redemptions.

“Never buy a fund named after someone. [You get a] total failure of risk control.” Sir Gerald Edgar Grimstone, chairman, Barclays Bank plc

There are a couple of lessons for investors from this situation, which is not unique to the UK. One industry insider, Mr. Gerry Grimstone, the former chairman of asset management firm Standard Life Aberdeen, made the generalization that one should never invest in a fund named after someone (such as the fund manager or managers). Grimstone indicated that the result is a total failure of risk control. The other lesson is to pay attention to the relationships that sometimes occur between asset managers and the platforms that distribute those funds. You can see that in this country where much of the ownership in funds is not direct, but rather when you review the prospectus, indirect through the distributor platforms such as Schwab, Fidelity, TD Ameritrade, et al. Make sure you understand what the incentives and inherent conflicts of interest there are between the investment managers and the distributors in terms of discounts, fees, and the like. As in equity trades, you must look to where are the real economics. Is it in the commission dollars or in the order flow? Finally, pay attention to the reputations of the fund managers involved (which is very difficult for outsiders to know). There are a lot of egos in money management. An asset gatherer may fall too much in love with the fees from a large star-manager managed fund to also pay close attention to the risk controls, often until it is too late.

The Unseen Hand

We now turn to the problems of H2O Asset Management in London, a subsidiary of Natixis Asset Management in Paris (which also owns Harris Associates in Chicago and Loomis Sayles in Boston). H20 Asset Management in its fixed income funds, according to articles in the Financial Times on June 25, 2019, had taken an outsized position in bonds tied to a German finance investor, Lars Windhurst. What prompted these stories was a report in FT Alphaville the previous week that H2O’s latest regulatory filings listed 1.4 billion Euros of investments in illiquid Windhorst bonds in six of the H2O funds.

This presents a familiar picture of a firm, H2O Asset Management, where strong performance and large inflows led to growth in assets undermanagement as well as profitability at the firm level that flowed up to the parent. Illiquidity in investments is not a problem in and of itself but can lead to problems when the position sizes increase as withdrawals from funds (with daily redemptions permitted) increase. This, as we saw with Woodford, often leads to the more liquid investments being sold to meet redemptions. The follow-on is that that often leads to increased concentrations of illiquid investments. And if you are running concentrated portfolios to begin with, the problems can be exacerbated.

As H2O clients continued to seek withdrawal of funds, they were told that they would have to accept a “haircut” of from three to seven percent on their redemption pricing, what the FT referred to as “swing pricing.” This ends up putting the burden of higher trading costs on the clients seeking their money rather than the investment firm itself and the parent.

One great driver of management behavior is the desire to keep assets high enough, long enough, to sustain the continued financial rewards at the firm and parent level.

What are the real issues here? The real issues come down to greed – of clients, investment managers, and asset gathering organizations and oversight – at the investment management firm level as well as at the parent. The structure of an investment in an investment management firm by an asset gatherer like Natixis generally leads to a quick payback of the initial purchase price of the business. What follows is basically an annuity stream of profits upwards. While the annuity stream of golden eggs continues unabated from the investment manager geese, oversight perhaps leans more towards the collegial side rather than adversarial. The danger of course comes when we are at a time of more than two standard deviation valuations in the markets, with investment managers often tempted to “reach” for performance (after all, it’s other peoples’ money). You want to keep the investors from redeeming, while keeping the asset levels high enough to sustain continued financial rewards at the firm and parent levels. Only time will tell whether the degree of oversight was adequate for the conflicts and contradictions inherent in the active management business model practiced by asset gathering firms in general.

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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 sell their shares.

Unlike traditional ETFs, actively-managed ETFs allow for strategies which don’t simply try to replicate the performance of a benchmark index.

Despite those advantages, very few active ETFs (under 300) have launched, very little money has flowed to them (around $80 billion industry-wide) and few equity managers have expressed any interest in them. The reason for the lack of interest has been the transparency requirement: actively-managed ETFs have to report their complete portfolio holdings every day, whereas an actively-managed mutual fund reports only once a quarter. Since ETFs are priced and sold second-by-second, it’s essential to know their current holdings in order to be sure that the published net asset value (cumulative value of the holdings divided by the number of shares in circulation) is accurate.

That’s a problem. Managers often need several days to build a position in a stock; they move slowly and quietly because they don’t want discovery of their interest in the stock to distort its price. If a hedge fund, for example, figures out that you’re going to be buying shares of Company X for the next four days, they’ll buy them ahead of you (a practice called front-running) knowing that your money will further raise the price of the stock. The moment you’re done buying, they sell, pocketing a small profit and screwing with your portfolio.

As a result, most active ETFs – and almost all of the top-performing ones – are fixed-income funds, often focusing on short-term bonds.

Great Active ETFs

“Great Owl” is MFO’s designation for funds whose risk-adjusted returns are in the top 20% of their peer group for every trailing measure period longer than a year. They represent a standard of caution and excellence. The complete list of Great Owls is available at our companion site, MFO Premium, which is home to all of MFOs data and screeners.

In order to identify the best active ETFs, we screened for Great Owls which had been around for a minimum of five years. Only nine funds, including two equity funds, made the cut.

  Category APR
%/yr
MAXDD
%
STDEV
%/yr
Ulcer
Index
Sharpe
Ratio
APR
vs Peer
MFO
Risk
MFO
Rating
Age
yr
ER
%/yr
AUM
$M
AdvisorShares Sage Core Reserves  HOLD Global Income 1.1 -0.3 0.4 0.1 0.80 -1.4 1 5 5 0.35 72.2
State Street SPDR MFS Systematic Value Equity  SYV Large-Cap Value 9.3 -12.4 11.8 3.6 0.72 +1.9 4 5 5 0.60 32.1
PIMCO Enhanced Low Duration LDUR Short Investment Grade Debt 2.3 -0.7 1.0 0.2 1.56 +0.7 1 5 5 1.02 346
Invesco Ultra Short Duration  GSY Ultra-Short Bond 1.2 -0.3 0.4 0.1 1.90 +0.1 1 5 11 0.25 2,391
PIMCO Enhanced Short Maturity Active Exchange-Traded MINT Ultra-Short Bond 1.4 -0.7 0.5 0.1 1.99 +0.4 1 5 10 0.42 11,844
BlackRock iShares Short Maturity Bond  NEAR Ultra-Short Bond 1.5 -0.1 0.3 0.0 2.17 +0.3 1 5 6 0.25 6,267
FlexShares Ready Access Variable Income RAVI Ultra-Short Bond 1.2 -0.3 0.4 0.1 1.44 +0.2 1 5 7 0.25 252
State Street SPDR SSgA Ultra Short Term Bond  ULST Ultra-Short Bond 1.2 -0.2 0.4 0.0 1.34 +0.1 1 5 6 0.20 182
BlackRock iShares Ultra Short-Term Bond  ICSH Ultra-Short Bond 1.3 -0.2 0.3 0.0 1.59 +0.2 1 5 5 0.08 1,395

In eight of the nine cases, these funds have outperformed their peers on an absolute basis (APR versus peers) as well as on a risk-adjusted basis. The group’s bias toward low-risk funds is reflected in the Ulcer Index column. The Ulcer Index measures two factors: how far a fund has fallen and how long it takes to get back up. For this group, the Ulcer Index is at or barely above zero.

The Coming Rise of the Active ETFs

So, active ETFs have been held back by advisors’ fear about the transparency requirement. That all changed on May 20, 2019 in the SEC’s ruling on a request by Precidian Investments LLC to issue an active, non-transparent ETFs. Precidian is a subsidiary of Legg Mason and, in filings to the SEC, argued that it’s not necessary for everyone to know what’s in the portfolio; it’s sufficient if just a few key players, highly responsible but sworn to secrecy, know. They’re designated as “authorized participation representatives.” The involvement of the AP representatives would function to keep the price honest without requiring the release of details.

At this point, only domestic securities (stocks, REITs, ADRs, commodities, other ETFs and so on) are allowed under the rule. As a practical matter, the ruling opens the door to some 2000 domestic equity mutual funds launching active ETFs. Precidian, an affiliate of Legg Mason, listed a series of Royce and Clearbridge funds in their filings.

Precidian is now actively marketing the SEC-approved framework to mutual fund advisors. American Century announced a partnership with Precidian on the very day of the SEC approval. Since then, interest has been widespread. According to a ThinkAdvisor report,

American Century is one of 10 asset management firms that has licensed the ActiveShares methodology from Precidian, and 20 other asset managers are in discussion with Precidian to do the same, according to Daniel McCabe, the firm’s chief executive… The 10 asset managers that already have signed contacts with Precidian account for 25% of the active U.S. equity mutual fund market, according to the firm. (SEC Gives Final Nod to First Nontransparent ETF Strategy. 05/21/2019)

Precidian’s approach is not the only one possible that balances the needs of the portfolio manager and the market; Eaton Vance, for example, has filed for approval of a different structure to achieve the same goals.

At its best, the Precidian Active Share structure might revive the mutual fund industry by allowing them to substantially lower expenses (partly by shifting them to others) and reducing short-term tax bills.

The Word from Walden Pond

MFO’s position about the fund industry is clear, consistent and realistic: 80% of all extant mutual funds could disappear without any loss to anyone except their advisors. That includes not only freakish little funds peddling some advisor’s weird vision of the investment world but also the vast numbers of large, timid, undistinguished, index-hugging funds whose only goal in life is maintaining the invisible mediocrity that keeps people from yanking their money in horror.

Nothing about an active ETF structure can redeem those funds, though even as we speak the wheels of a hundred marketing engines are turning. MFO has been covering ETFs, active and otherwise, and we’ll continue to do so. But we’ll do so with Henry David Thoreau’s warning pasted to the wall:

As with our colleges, so with a hundred “modern improvements”; there is an illusion about them; there is not always a positive advance. The devil goes on exacting compound interest to the last for his early share and numerous succeeding investments in them. Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end. (Walden, 36)

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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 a new fund, hence a new fund Launch Alert.

The managers are seeking long-term growth of capital. The plan is to invest in a fairly compact portfolio of small cap stocks, primarily but not exclusively domiciled in developed international markets, using Cedar Street’s disciplined, valued-oriented approach.

What are they planning to do?

The guys will build a portfolio of 50-70 international small cap stocks. The current market cap range for their universe is about $100 million – $8 billion. While they have the authority to invest in emerging markets, they anticipate that direct EM exposure will be “minimal.” Position sizes will be “conviction weighted” but any individual position is capped at 5%. They anticipate turnover in the range of 25-35% which implies a typical holding period of three to four years.

In building the portfolio, they give exceptional attention to downside protection. The team’s investment process review places the “downside review” before the “upside analysis,” which strikes me as singularly sensible. They have a strong preference for value-priced stocks of firms with solid underlying businesses and clean balance sheets. They also spend a lot of effort in a governance analysis. They argue that “Because of varied laws around corporate governance and knowledge of the local players in the markets and their views on minority investors, Cedar Street feels that a detailed review of corporate governance practices is key to success in this space.”

Who’s going to do it?

Jonathan Brodsky, Founder and Principal, and Waldemar Mozes, Director of Investments for Cedar Street, will be the portfolio managers for the Fund. Mr. Brodsky co-managed Advisory Research International Small Cap Value from its launch in 2010-2016, Calvert International Opportunities from 2011-2016 and Acuitas International Small Cap from 2014-2016. Prior to joining Cedar Street, Mr. Mozes joined TAMRO Capital Partners LLC as a manager in 2008 after stints with Artisan Partners and The Capital Group, adviser to the American Funds. At TAMRO he developed the international small cap strategy and managed ASTON/TAMRO International Small Cap Fund (AROWX/ATRWX) from its launch in 2014 to its untimely liquidation in January, 2016.

In the topsy turvy world of asset management M&A Advisory Research was bought in 2010 by Piper Jaffray then sold again in 2019 while Aston was bought in 2016 by AMG, with all of its funds absorbed or liquidated.

Why might the fund warrant your attention?

There are three arguments for considering the fund.

1. International small caps are a major asset class.

In rough terms, four-five thousand stocks, 46 countries with, depending on how you count, somewhere between 100-200% of the total market capitalization of the two thousand US small caps. Collectively, they represent about 6% of the global stock market.

2. You’re underexposed to them.

The average US investor holds about 15% of their portfolio in international stocks but the average “core” international fund only has 1.5% of its money in small cap stocks. In rough terms, the average US investor might then have 0.225% in international small caps, about a 25:1 underweight.

The bias toward international large caps is ironic since small caps have greater price inefficiencies linked to low (and falling) analyst coverage, substantially higher 10-year returns than their large cap peers, higher risk-adjusted returns, lower correlation to the US market and better valuations. And their advantage over international large caps has been persistent over time and across markets.

As of May 2019, GMO projects international small caps to have higher returns than any asset class outside of the emerging markets over the next five to seven years.

3. The managers have a pretty solid record in exploiting them.

The managers’ records at their prior funds were quite solid, though in the TAMRO / Aston case regrettably cut short. Cedar Street has enough AUM that they’re been able to build out a robust analyst corps in order to find the opportunities that firms relying on “bought research” might miss. Their screening process helps them reduce a 5,000 stock universe down to an investable 500 stock one, with something like 100-200 names on their shopping list.

Potential investors should be aware that the process of portfolio transition could trigger a substantial short-term capital gains accrual, which might mean an unusually high tax bill.

The administrative details

The minimum initial investment for the retail shares (HIISX) is $2,500 and the expense ratio, after waivers, is 1.32% on assets of $54 million. The fund offers three other share classes.

Name / ticker Expense ratio Minimum investment
Administrative HRISX 1.20 $50,000
Institutional HAISX 0.95 $50,000
Retirement HNISX 0.87 $1,000,000

The fund is available through Schwab, TDAmeritrade, Vanguard and a few other platforms. Its website, Harbor International Small Cap, doesn’t yet offer commentary from the Cedar Street team. The Cedar Street Asset Management site isn’t noticeably richer, except for a bunch of video clips (2016-19) on the In the News page. Those mostly offer commentary on external events (“X is overpriced”) rather than discussions of strategy and approach.

The general case for international small cap investing was nicely summarized in a December 2018 white paper from AMG. It’s worth reading for folks new to the field. Mike Lipper, president of the Royce Funds, has a comparable piece (May 2019) but it requires a slightly annoying registration in order to get access.

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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.

What are they planning to do?

Their goal is to provide “an attractive absolute return” over the course of a full market cycle. A market cycle encompasses the period between the peak of one bull market (October 2007 for the current one, for example), through the subsequent bear market and bull market phases, to the peak of the next one. Such cycles typically run from 7-10 years. By highlighting the “full market cycle” as the right period for judgment, they’re reminding investors that over shorter spans within the cycle they’ll look, variously, like heroes, geniuses, fuddy-duddies then idiots. For long-term investors, none of those individual phases should sway your investment decisions: charging into the fund after they’ve established themselves as geniuses is about as destructive to wealth as charging out of the fund when you’ve concluded they’re idiots.

The portfolio construction process has three steps:

  1. Identify good businesses – their universe is about 300 small cap U.S. blue chip companies: established firms, profitable businesses, predictable cash flows and a strong balance sheet.
  2. Buy them when they’re available at a good price – using a discounted free cash-flow model that accounts for the short-term ebbs and flows of a firm’s cash flow.
  3. Sell them when the price exceeds value, or when you can no longer be certain of the value.

As absolute value investors, the corollary of all that is: if they can’t find companies and stocks that meet our criteria, they will not buy stocks just for the sake of being fully invested. That means during each cycle, it is utterly predictable that the fund will hold a cash stake that’s somewhere between negligible (0% when the market is tanking and values abound), substantial (say, 40% as values become scarce) and huge (90% at the market’s frothy peak). The short-term judgment of “genius” or “idiot” will be determined by where in the market cycle we are, rather than by any change in the managers’ behavior.

Who’s going to do it?

The fund will be managed by Eric Cinnamond and Jayme Wiggins. This fund’s first incarnation appeared in 1996, when Mr. Cinnamond’s Evergreen Small Cap Equity Income fund earned a five-star designation from Morningstar and was twice recognized by Barron’s as a Top 100 mutual fund. In the late 90s, he moved to Florida and was hired by Intrepid to replicate the strategy in a series of separately managed accounts. From 2005-2010, Mr. Cinnamond built and managed the five-star Intrepid Endurance (ICMAX) then, from 2010 – 2016, he managed Aston / River Road Independent Value (ARIVX). In an exceptional move, Mr. Cinnamond recommended return of capital to his investors, noting that the market was fundamentally hostile to his investment style and that he was unwilling to charge investors “equity fund prices” while sitting at 90% cash. That struck me as a singularly sensible and principled decision.

Mr. Wiggins managed Intrepid Endurance from the day after Mr. Cinnamond’s departure in 2010 to September, 2018. He’d worked with Endurance as a member of its investment team since the fund’s launch.

Why might the fund warrant your attention?

Absolute value investors are the industry’s most sensible and most endangered species. They start with the simple principles that stocks are risky and stocks aren’t always worth the risks they pose. Absolute value investors only own stocks when the likely rewards substantially outweigh the likely risks. Every market cycle has phases when stocks, on whole, are wildly undervalued, more-or-less reasonably valued, and wildly overvalued. On average, absolute value investors pour money into the market during the first phase when everyone else is fleeing, ride the market back up during the second phase, and sell down their holdings during the third phase. Because the third, frothy phase can last a long time, executing the strategy requires fortitude and patience on the part of both managers and shareholders.

Since most investors have limited patience, most absolute value investors have limited careers.

That said, Messrs. Cinnamond and Wiggins have performed exceptionally well over the course of two lengthy careers. Below is the combined record for their tenures as lead manager for Intrepid Endurance (10/03/2005 – 9/10/2018).

For much of those 13 years, Endurance crushed both the S&P 500 and its small cap peers. As the frothy phase – depending on your metrics, 2013-present – dragged on, its raw performance advance dwindled then disappeared. (As did most of its investors.)

The strength of the managers’ stock-picking is understated by the fund’s total returns, since their portfolios often held substantial cash reserves. Over the years, several spot calculations showed that the fund’s stocks were returning a multiple of the index’s returns.

The stock market remains, in the managers’ view, frothy. As a result, the fund’s initial portfolio remains lightly invested and focused on liquidity.

Given our views on valuation and risk, we are currently placing considerable emphasis on liquidity, quality, and minimizing mistakes. T-bills, in our opinion, are particularly attractive relative to many of the small cap stocks we’ve analyzed and valued. In addition to protecting capital, T-bills are liquid, provide a competitive yield, and allow investors to act decisively when future opportunities return.

In addition to T-bills, we are attracted to a handful of small cap equities with strong balance sheets. Our goal is to focus on businesses we believe will survive and gain market share during the next economic downturn. In summary, at this stage of the cycle, we want liquidity in the portfolio and liquidity in the balance sheets of the businesses we own.

The administrative details

The minimum initial investment for PVCMX is $2,500 and the opening expense ratio, after waivers, is 1.25%. That’s 13 bps lower than the expenses for ICMAX. The fund is available from the advisor, which is working hard to arrange access through various online brokerages. Its website is PalmValleyCapital.com. There’s a fair richness of market analyses on site already, which would give potential investors an insight into the managers’ approach.

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Objective and strategy

Matthews Asia Value pursues long-term capital growth by investing in a diversified portfolio of securities of undervalued companies from the Asian region. The target is firms that are high quality, undervalued with strong balance sheets, focused on their shareholders, and well-positioned to take advantage of Asia’s economic and financial evolution. The goal is to buy shares at a discount of 30% or more to their calculation of intrinsic value.

It is an all-cap portfolio, which translates to an exceptional weighting in small- and mid-cap names. At the most recent portfolio report, 65% of the portfolio was in mid-cap and smaller names with 12% in micro-cap stocks. That’s double the peer average. While the manager would prefer to be fully invested, as he was in 2015 and 2016, he is willing to hold cash when there aren’t rich opportunities. The cash stake currently is above 15%.

Adviser

Matthews International Capital Management, more commonly known as Matthews Asia. Matthews Asia is the largest dedicated Asia-only investment specialist in the United States. They were founded in 1991 by Paul Matthews and launched their first funds in 1994. As of May 31, 2019, Matthews Asia had US$28.9 billion in assets under management. They advise the 17 Matthews Asia mutual funds, which range from “risk-conscious and pretty good” to “risk-conscious and outstanding.” As a firm they pursue a bottom-up, fundamental investment philosophy with a focus on long-term investment performance.

Manager

Beini Zhou, with the assistance of Michael Han. Mr. Zhou manages the firm’s Asia Value Strategy and co-manages the Asia Small Companies Strategy. Prior to joining Matthews in 2013, he was a Research Analyst with Artisan Partners on the Global Value Team. He earned an M.S. in Computer Science and a B.A. in Applied Mathematics, both from Harvard and both relevant to his investing discipline. Mr. Han is the fund’s co-manager and the primary answer to the question, “what happens if Beini Zhou gets hit by a bus?” Before joining Matthews in 2007, he worked at Luxor Capital Group and Crystal Investment Group. He has earned an MBA from Columbia. Both have been with the fund since launch.

Strategy capacity and closure

The capacity is about $5 billion. Matthews has an excellent track record of closing funds in order to manage inflows and protect existing investors. That said, with assets currently at 1% of capacity, this might remain a hypothetical protection for a bit.

Management’s stake in the fund

Mr. Zhou has invested between $50,000 – 100,000 in the fund; Mr. Han has not invested in it. One of Matthews other portfolio managers, Tiffany Hsiao, also had invested in the fund. As of December 2018, none of Matthews’s independent or interested trustees had invested in the fund. That’s rarely reassuring.

Opening date

November 30, 2015

Minimum investment

$2,500 for retail shares, $100,000 for institutional shares.

Expense ratio

1.5%, after waivers, for investor shares and 1.25% for institutional shares, on assets of $26 million.

Comments

Matthews Asia Value is an exceptional fund. It possesses three characteristics that make it well worth your consideration.

It is a Matthews fund.

Matthews is the industry’s top Asia specialist. It’s been their focus for nearly 30 years. While the largest firms might offer a few Asia-focused funds (Vanguard, one; T. Rowe Price, three; Fidelity, four), Matthews has seventeen. They’ve had “boots on the ground” for decades, they have operations based in Asia and their investment team is rooted in the region and its cultures. Matthews notes:

The 48 members of our investment team each have deep experience in Asia and share a commitment to helping you understand and leverage Asia’s long-term growth potential. They bring to that effort a range of skills, experiences, and backgrounds, with 35 team members hailing from Asia, speaking 15 different Asian languages and dialects.

Matthews funds are, across the board, solid, disciplined and risk conscious.

It is a value fund.

The story about investing in Asia has always been the growth story. Louise Kavanagh, a Hong Kong-based managing director for Nuveen notes:

Over the next few decades, the weight of economic power and structural megatrends will lean heavily towards the Asia-Pacific region. By 2030, Asia-Pacific, led by China, will account for nearly half of the world’s output, more than 50% of the world’s urban population growth and almost all of the top 50 global cities, with the largest forecasted change in wealthy households.

Matthews themselves strike the same chord: “Asia is the fastest-growing, most dynamic region in the world, currently representing one-third of global GDP and more than half of the world’s annual growth.” In JPMorgan’s “10 Reasons to Invest in Asia” (2019), the word “growth” occurs five times and “value” not at all. That growth bias once made sense, but Asia’s markets are now evolving in ways that will finally reward value investors.

The same growth bias manifests itself in the structure and portfolios of mutual funds. The only diversified Asian fund or ETF that even has “value” in its name is this one. Eight diversified Asia funds and ETFs– that is, ones focused neither on the emerging markets or a single country – have value-tilted portfolios. Several are, frankly, tiny and bad.

In international markets over the past 1-, 3- and 5-year periods, large has beaten small and growth has beaten value by about 300 bps. And still Matthews Asia Value, whose portfolio is tilted toward “small” and “value”, has been beating the larger-and-growthier pack since inception.

Three year performance, through 05/2019

  Value Rank among all diversified Pacific region funds and ETFs
Annual return 9.9% 4th
Standard deviation 11.3 5th
Sharpe ratio 0.75 2nd
Downside deviation 11.3 5th
Sortino ratio 1.10 3rd

Among the Asian value options, Matthews has the second-highest returns and the highest Sharpe ratio.

It has Beini Zhou.

I’ve spoken twice, at length, with Mr. Zhou at the Morningstar Investment Conference. I talk with lots of managers each year. He is among the most impressive I’ve met in terms of clarity and precision of thought and expression. He was, at our last conversation, in the midst of taking courses on artificial intelligence and teaching himself a new programming language with the intent of designing a program that could scrape qualitative data, not just statistical data, from conference calls and other corporate documents.

Mr. Zhou made two arguments: that Asian markets were evolving in a way that will benefit value investors and that most of the folks attempting value investing in Asia don’t “get it.” Doctrinaire thinking, or an over-dependence on quantitative measures, leads most investors into value traps.

The Asia ex-Japan market has an abundance of undervalued stocks. Many, however, are undervalued for good reasons. It could be the business has not been growing and has no prospects for growth; corporate governance could be poor; management could include questionable characters or a shady past; business quality could be mediocre; or its financial numbers may seem too good to be true. A few years ago, we passed on a sizable Chinese specialty chemicals company at a single-digit price-to-earning (P/E) ratio even though all our checks, qualitative and quantitative, came back fine. We passed simply because we did not feel comfortable with the company’s operating margin of almost 60%. The stock was subsequently suspended by the local stock exchange due to concerns of potential fraud.

With its less-developed economies and markets, Asia is full of such landmines if one blindly invests in statistically cheap companies. (“Value Investing in the Digital Age,” 2019)

He attempts to avoid those landmines using two, complementary strategies. First, he spends a lot of face-to-face time with management, deciding whether or not they’re the sort of people with whom he could invest. “The jockey,” he argues, “is often as important as the horse. When we meet with a founder in Asia, numbers are secondary and we use our initial first-hour meeting to inquire about the history, culture and DNA of the organization.” That’s the point at which individual intellect partners with deep linguistic and cultural knowledge to produce clues that others might miss.

Second, he tries to connect the dots in ways that others don’t. He sees great value in tech stocks despite the fact that “value orthodoxy avoids tech.” Ten of the hundred firms on his immediate watchlist, those that meet his quality criteria but don’t yet represent good value, are tech firms.

Two key conditions are now in place for a value-oriented investing strategy in Asia.  First, the slowdown in Asia in recent years has led to a compression of earnings multiples in the valuation of many companies in the region. Many of these same stocks used to be growth darlings trading at a highflying multiple that is the bane of value investors. But many now trade at no higher than a mid-teen P/E ratio while still generating double-digit profit growth, albeit not growing as fast as before. This presents opportunities to value investors that were not as readily available earlier. Case for Asian value investing (2017)

With luck, and skill, he identifies 30-40 “quality businesses where bad things have happened” that are actively changing their fate and that sell for $.70 on the dollar (“I want to buy a dollar for $.70 so long as it’s soon going to be worth more than a dollar”).

Bottom Line

American investors have long been underexposed to international markets (foreign stocks represent 60% of global market cap but under 20% of US equity portfolios) and that problem has been getting worse (Fidelity estimates that international exposure has fallen 3-8% this decade, with young investors having the least international exposure). Even in perfectly normal markets, that’s bad because an undiversified portfolio tends toward both lower returns and higher volatility than one with a substantial global balance.

The problem is especially pressing now. The US stock market has the highest valuations in the world and the second-highest in US stock market history. Sober folks – Vanguard, Research Affiliates, GMO – all project the US to underperform in the decade ahead. It happens. Really.

(source: The Hartford Funds, US & International Markets Move in Cycles, 2019)

Sober but more alarmed folks are a bit more emphatic. “The Case for Avoiding U.S. and Buying Asia Instead” (Barron’s, 03/08/19) draws on the work of Chris Wood, a very well-respected analyst, to conclude that the financial engineering that’s been propping up the US market leaves us in a singularly fragile space.

For those interested in looking beyond, this is both an exceptional fund and an exceptional manager. While Mr. Zhou is risk-conscious in his decisions, though, it is not a “conservative” fund per se. You should not invest in it expecting low volatility or a downside hedge against either US or global market declines. The argument, instead, is that it offers a distinctive take on a dynamic region; Mr. Zhou has been finding value in ways, and in places, that others miss. In doing so, he’s been serving his investors in ways that other vehicles – both active and passive – have not been able to do.

For investors looking to re-establish their domestic / international balance, this is a first tier option.

Fund website

Matthews Asia Value. The Matthews site, in general, is chock-a-block with information on developments in Asia and their investment implications. Mr. Zhou has also authored a short, clear piece entitled “Value Investing in the Digital Age” (2019) which you’d benefit from reading.

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Chip and I aspire to travel internationally once every two years. Our hope, in part, is to get far away from the noise long enough that we actually manage to unwind. Our ideal trips feature cool sites, the opportunity to sit and talk with people, and one outstanding meal a day. Two years ago that took place in Scotland, this year Ireland, and two years hence, Italy. (We hope.)

The plan was simple: arrive, get away from Dublin as fast as possible, head west to the Gaeltacht, then spend as little time driving each day as possible. The east of Ireland has ancient wonders, but it’s also the most like England: country estates, formal gardens, and self-important young professionals glued to their iPhones. In the east, Gaelic is not spoken and rarely understood; my relatives, who’ve lived in the same house in County Kilkenny since the 1720s, admit that they can speak nary a word of the island’s native language.

The west of Ireland is more rugged, slower-paced, more … Irish. So there we went.

June 1: trapped in Row 11, seats A and B on the overnight from O’Hare. Not first class but something called “Premium Economy,” which gave us six additional inches for $150. Don’t scoff; I’m six foot tall and those inches were precious.

June 2: we stagger, jet-lagged, around Dublin. The plan was to avoid driving when we were too tired to reliably distinguish the roadway from the sidewalk. Mission accomplished?

June 3: the cross-country drive from Dublin to the Rock of Cashel to Dingletown (An Daingean in Gaelic, which translates to “stronghold”).

June 4, 5: in Dingle. A beautiful harbor town, home to outstanding ice cream and the best chowder either of us has ever had. The two highlights were (1) starting the Slea Head Drive – a scenic bit of cliffside road that appears precisely one foot wider than the tour buses that are coming directly at you – and (2) a sea safari, seated on pommels and riding a speedboat for four hours out of the harbor, along the coast and around the Blasket Islands. We were accompanied for much of the way by a pod of 50 dolphins, which was intensely cool.

June 6: drove to Doolin. The roadmap from Dingle to Doolin looks a lot like the diagram of your small intestine.

June 7: visited the Cliffs of Moher, drove through the Burren, snuck in a trip to Hazel Mountain Chocolate (the world’s smallest and most remote chocolate factory) hopped a ferry and made it to Galway.

June 8 -9: in Galway. Food, shopping, open air markets, lovely walks along the River Corrib, followed by a full-day trip via ferry to the largest of the Aran Islands, Inis Mór. Patrick, who was actually Padraig and thought of English as his second language, took us most of the length of the island in his pony trap. A high point, literally and figuratively, was the long trek up to the hilltop fortress at Dun Aengus (locally, Dún Aonghasa ). It was an excellent spot to contemplate the beauty of Ireland and your own prospects for an untimely death, before retreating down the mountain to buy a handmade sweater or two.

June 10: drove eastward to Brú na Bóinne, roughly “Mansion on the River Boyne.” There are three huge tombs (Knowth, Dowth and Newgrange) at Brú na Bóinne that predate the Pyramids by a millennium and Stonehenge by more. They’re interspersed with 35 smaller tombs and other Neolithic structures.

June 11: Dublin International, a four hour delay, eight hours in Row 11, seats A and B (again!), landed at O’Hare at either 7:00 p.m. or 3:00 a.m. (depending on whether you believed the local clocks or our brains) and spent three lovely hours driving across Illinois to home. Immediately confronted with the question, “whatcha bring me?”

Life is good.

We would very much encourage folks to visit. The country is lovely, the food is excellent, and the hospitality is incomparable. That said, we also wanted to distill our travel wisdom – insofar as we could – into Ten Tips for Traveling to Ireland. Then we discovered an 11th.

Tips for traveling in Ireland
  1. Go west. Immediately. The east of Ireland is England (traffic jams, huge estates, formal gardens and Very Important young professionals in power suits and iPhones with only the ubiquitous Guinness signs as a reminder than you’re in Ireland), a nice place but not where you’d intended to travel.
  2. Pack light. Cars are small. They have stores and they take Visa.
  3. Remember that posted speed limits are an example of Irish humor. Twisting dirt paths dotted with sheep dung are typically posted at 80 kilometers per hour. Yes. That road over there.
  4. The “coffee” typically served at your B&B has two of the three attributes of fine coffee: it’s hot and dark-colored. That’s about it.
  5. Ireland has more castles and ruins (30,000+) than actual coffee shops (500+). Plan accordingly.
  6. Eat the seafood chowder. At its worst, it’s quite good. At its best (Out of the Blue, Dingle), sublime.
  7. If you plan to drive on any other than M-routes, the Irish equivalent of an interstate, your motto needs to be “Xanax all around!”
  8. Fans of escape rooms are going to love venturing into an Irish bathroom. They have a lot in common, including time pressure, inscrutable technology and occasional panics. Toilets require handle pumping, priming, double flushing, chain pulls and entreaties in Gaelic. Having a 20-cent coin sometimes helps. Showers are worse. Good luck!
  9. It’s an island. The best way to see it is by boat. Take a Sea Safari from Dingle around the coast and travel with pods of dolphins. Take a small ferry to gaze at the Cliffs of Moher from below. Take a high-speed ferry to the Aran Islands and a pony trap to the heights of Dun Aengus.
  10. Seek out chocolates.
  11. Invite us along!

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I write, frequently, with admiration and gratitude, about the contributions TheShadow makes both to our discussion board and to our final double-check of coverage in each month’s Briefly Noted column. For those wondering exactly how much cool stuff one person might extract from the swamp of SEC filings each month, here are The Shadow’s contributions for the month of June 2019.

The live, clickable version is TheShadow’s profile page.

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Mutual Fund Observer by David Snowball - 2w ago

Before funds and ETFs can be offered to the public, they’ve got to be submitted to the SEC which has 70 days to review the application. In general, advisers try to launch just before year’s end because that allows them to have clean “year to date” and calendar year results to share. The funds on-file this month will be eligible to launch in September, though not required to do so. A surprising number of advisors filed virtual “red herring” prospectuses: substantially incomplete documents that were pushed through to meet some self-imposed deadline but that fail to stipulate strategy, manager and costs.

There are a series of intriguing and potentially outstanding funds in this month’s collection: BBH Large Cap which shares its manager with BBH Core Select, DoubleLine Income which is the latest variation on DoubleLine’s asset-backed theme, Frontier Caravan Emerging Markets Fund which features the return of a former Eaton Vance star manager, Grandeur Peak Global Contrarian Fund which seems like a sort of “special situations” fund for the global micro-cap crowd, and Wasatch Global Select which seems like a “best ideas without constraints” fund for the firm’s successful, younger generation of managers.

Aperture Endeavour Equity Fund

Aperture Endeavour Equity Fund will seek “return in excess of the MSCI ACWI hedged to USD Net Total Return Index.” (sigh) The plan is to establish a global long/short portfolio of misunderstood stocks. The fund will be managed by Thomas Tully of Aperture Investments, formerly an analyst for a small hedge fund provider, Kingdon Capital Management. Its opening expense ratio is 2.09% for “X” shares, and the minimum initial investment will be $500.

Avantis Emerging Markets Equity ETF

Avantis Emerging Markets Equity ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to invest a diverse group of companies related to emerging markets across market sectors, industry groups and countries but the prospectus admits to a small cap and value bias. The fund will be managed by someone as yet unnamed. Its opening expense ratio has not been disclosed.

BBH Select Series-Large Cap Fund

BBH Select Series-Large Cap Fund will seek “to provide investors with long-term growth of capital.” Okay, “investor-focused” is good. The plan is to buy US large cap stocks “based on fundamental business analysis and a long-term orientation that blends aspects of growth and value investing.” The fund will be managed by Michael R. Keller. Mr. Keller has been co-manager of the very solid BBH Core Select Fund since 2008 and sole manager since July 2018. He’s supported by 11 analysts. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $5,000 or $10,000, depending on share class.

DoubleLine Income Fund

DoubleLine Income Fund will seek to maximize total return through investment principally in income-producing securities. The plan is to create “a portfolio of income-producing instruments of varying characteristics selected by the Adviser for their potential to provide a high level of current income, capital appreciation or both.” Mostly asset-backed securities, which are sort of a DoubleLine specialty. They promise “a controlled risk approach” and have the ability to short in order to further that goal. That said, it’s not clear to me what the fund’s distinctive niche among DoubleLine products is. I had that same problem with the Royce Funds and their penchant for 100 flavors of small cap value investing. The fund will be managed by Morris Chen, Andrew Hsu and Ken Shinoda. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,000, reduced to $500 for IRAs and HSAs.

ETF Opportunities Strategy One Fund 

ETF Opportunities Strategy One Fund, apparently an actively-managed ETF though they don’t exactly say that, will seek long-term capital appreciation with capital preservation as a secondary objective. (I’ve also wondered what the prospects are for long term gains when capital protection is secondary.) The plan is to invest in stocks with the proviso [Additional description of investment strategy of Fund to be included in a subsequent pre-effective amendment.]. The fund will be managed by an as-yet unnamed person, possibly affiliated with RidgeLine Research, LLC. Ridgeline is a newly-formed advisor with no assets under management. Its opening expense ratio has not been disclosed. There is an identical companion filing for ETF Opportunities Strategy Two Fund.

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes SDG Engagement High Yield Credit Fund will seek current income and long-term capital appreciation alongside positive societal impact. That seems awfully wholesome. The plan is to invest globally in the high-yield securities the advisor believes have attractive risk-return characteristics as well as alignment with at least one of the UN Sustainable Development Goals. They exclude companies “that manufacture tobacco and/or controversial weapons.” The fund will be managed by Mitch Reznick and Fraser Lundie of Hermes Investment Management, Ltd. Hermes has about $44 billion in AUM but provides stewardship advisory services to folks with another $587 billion in assets. Its opening expense ratio is 0.90%, and the minimum initial investment will be $1500.

Fiera Capital U.S. Equity Long-Term Quality Fund

Fiera Capital U.S. Equity Long-Term Quality Fund will seek long-term capital appreciation. The plan is to build a portfolio of 20-45 high quality US stocks. On face, there’s nothing terribly novel about their view of what qualifies as “quality” or how to find it (stock-by-stock) though “our unique approach to investing is rooted in the firm’s deep Canadian heritage.” The fund will be managed by Nadim Rizk and Andrew Chan of Fiera Capital. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $1,000.

Frontier Caravan Emerging Markets Fund

Frontier Caravan Emerging Markets Fund will seek long-term capital appreciation. The prospectus reveals virtually nothing about the proposed strategy, other than “invest in EM stocks with 25% or more in the banking sector.” The fund will be managed by Cliff Quisenberry who founded Caravan Capital Management LLC, a small boutique investor, in 2008. Mr. Q’s online bio reports that “As the portfolio manager of the Eaton Vance Tax-Managed Emerging Markets Fund (EITEX), his fund achieved a consistent, top-decile ranking, obtained a 5-star Morningstar rating and outperformed the MSCI Emerging Markets Index by over 500 basis points per annum since the fund’s inception in July of 1998 and until his departure in April 2007.” At the time, he favored smaller markets and quant investing. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $10,000.

Grandeur Peak Global Contrarian Fund

Grandeur Peak Global Contrarian Fund will seek long-term growth of capital. The plan is to invest primarily in foreign and domestic small- and micro-cap companies with the stipulations that a “significant” portion might be in micro-caps and a “meaningful” slice in mid-caps and larger. In general they target three themes:

  • “Core Contrarian”—what the Adviser believes to be best-in-class growth companies, but which are part of a currently out-of-favor industry, sector, or geography.
  • “Fallen Angels”—high quality growth companies that the Adviser believes have hit a temporary setback relative to their long-term growth potential.
  • “Undiscovered Gems”—smaller growth companies that the Adviser believes are undervalued because they are lesser known, have high product or client concentration, or are otherwise not well understood yet by the market.

And maybe some other stuff that looks good but doesn’t quite fit into one of those categories. The fund will be managed by Mark Madsen. Mr. Madsen is on the management teams for Grandeur Park Global Reach and International Opportunities and, like most of the GP professionals, spent time as an analyst at Wasatch. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,000, reduced to $1,000 for accounts opened with an automatic investing plan.

iM DBi Long Short Hedge Strategy ETF

iM DBi Long Short Hedge Strategy ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to fire up the Dynamic Beta Engine and have it “invest in an optimized portfolio of long and short positions in U.S. exchange-traded futures contracts.” Since futures are cheap, the rest of the portfolio will be invested in investment grade, short-term bonds. The manager has been studying hedge funds and has concluded that they can be beaten at their own game. The fund will be managed by Andrew Beer and Mathias Mamou-Mani of Dynamic Beta investments (note the small “i” as a dynamic marketing gesture.) Its opening expense ratio is 0.85%.

Karner Blue Animal Welfare Fund

Karner Blue Animal Welfare Fund will seek achieve long-term total returns by investing in companies that lead their industries in animal welfare performance. The plan is to invest, mostly, in mid- to mega-cap stocks of firms that are nicer-than-average to animals, either in their R&D (testing on animals), production or impact on wildlife habitat. Curiously the prospectus highlights “leaders in their industries with respect to animal welfare performance” but says hardly a word about the investment characteristics that they target. The fund will be managed by three folks from Karner Blue Capital, “a pioneer in compassionate investing.” Its opening expense ratio is 1.25%, and the minimum initial investment will be $2,000 for Investor class and $2,000,000 for Butterfly class shares. I scanned the prospectus to see if the “Butterfly” class was anything other than a silly marketing gimmick; I had imagined, incorrectly, that investments in that share class might trigger some eco-friendly activity on the advisor’s part. Not so much.

Overlay Shares Large Cap Equity ETF

Overlay Shares Large Cap Equity ETF, an actively-managed ETF, seeks long-term capital gain. The plan is to invest in other ETFs to get US market exposure and buying or selling short-term put options to generate income and hedge the portfolio. The hope is that the fund will manage positive returns in rising, flat or modestly falling equity markets, and will buffer losses in major declines. The manager is not named, nor is the expense ratio disclosed. The advisor is launching four other active ETFs with it: Overlay Shares Small Cap ETF, Overlay Shares Foreign Equity ETF, Overlay Shares Core Bond ETF and Overlay Shares Municipal Bond ETF. Their strategies (and missing info) are parallel.

Pzena International Value Fund

Pzena International Value Fund will seek long-term capital appreciation. The plan is to buy stocks, mostly in developed foreign markets, using “a classic value strategy.” That said, the prospectus also allows up to 15% in emerging markets, 15% in illiquid securities, 15% in derivatives and 10% in limited partnerships. The fund will be managed by Caroline Cai, John P. Goetz and Allison Fisch, all of Pzena Investment Management. The team began running Ivy Pzena International Value in July 2018; results to date have been weak. They’ve managed Pzena EM Value for five years with no great distinction. Its opening expense ratio is 1.04%, and the minimum initial investment will be $5,000 for regular accounts and $1000 for tax-advantaged ones.

Sierra Tactical Bond Fund

Sierra Tactical Bond Fund will seek total return. The plan is to tactically trade high-yield bond mutual funds and ETFs. The fund will be managed by Kenneth L. Sleeper, David C. Wright, and Terri Spath. The team’s multi-sector bond fund, Sierra Tactical All Asset, trails 97% of its Morningstar peer group over the past five years with low returns, below-average risk but high expenses. This fund’s opening expense ratio is 1.84%, and the minimum initial investment will be $10,000.

Wasatch Global Select Fund

Wasatch Global Select Fund will seek long-term growth of capital. The plan is a bit unclear to me; it’s global, all-cap, and concentrated with managers who will “travel extensively outside the U.S. to visit companies and expect to meet with senior management.” The fund will be managed by five people who manage other Wasatch funds (International Opportunities, International Growth, Micro-cap …) which largely bear four- or five-star ratings. So maybe this is Wasatch’s “best ideas” fund: young, successful managers largely unconstrained by size, geography, industry or style able to buy whatever is most compelling? Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,000, reduced to $1,000 for accounts established with an automatic investing plan.

Wasatch International Select Fund

Wasatch International Select Fund will seek long-term growth of capital. The plan is a bit unclear to me; it’s global, all-cap, and concentrated with managers who will “travel extensively outside the U.S. to visit companies and expect to meet with senior management.” The fund will be managed by Ken Applegate and Linda Lasater, who are also members of the Global Select team. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,000, reduced to $1,000 for accounts established with an automatic investing plan.

William Blair Small-Mid Cap Core Fund

William Blair Small-Mid Cap Core Fund will seek long-term capital appreciation. The plan is to build a diversified portfolio of “high quality but undervalued” stocks. The fund will be managed by Daniel Crowe, Robert C. Lanphier IV, and Ward D. Sexton. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $500,000.

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Each month, dozens of funds report manager changes to the SEC. The vast majority of those are inconsequential: one MBA-yielding member of a 12-person management team is popped out and another is popped in. This month’s compendium covers manager changes at 122 funds. That’s a larger-than-normal report mostly because we shared only a compressed list in our June issue, which reflected the competing time demands that Chip faced as she prepared for Ireland.

This month sees few blockbuster moves, though several “A” tier managers are on the move. Kathleen Gaffney is departing several Eaton Vance funds. John Carlson, Fidelity’s lead EM debt guy, formalized word of his year-end retirement. And the Zacks funds are losing one of their two Zackses.

Ticker Fund Out with the old In with the new Dt
EGALX Aberdeen International Real Estate Equity Fund Bruce Ebnother will no longer serve as a portfolio manager for the fund. Svitlana Gubriy, Jon Stewart, and Toshio Tangiku will continue to manage the fund. 5/19
AEOVX AC Alternatives Emerging Opportunities Total Return Fund Kevin Akioka has announced his plans to leave American Century Investments. As a result, he will no longer serve as a portfolio manager for the fund. Alessandra Alecci, John Lovito, Margé Karner, and Abdelak Adjriou will continue to manage the fund. 5/19
ACOIX AC ONE China Fund Frederick Ruopp will no longer serve as a portfolio manager for the fund. Patrick Pascal will continue to manage the fund. 5/19
FNG AdvisorShares New Tech and Media ETF David Chojnacki is no longer listed as a portfolio manager for the fund. Scott Freeze will now manage the fund. 5/19
AAIPX American Beacon International Equity Fund Foster Corwith has retired and is no longer listed as a portfolio manager for the fund. The other twenty managers will continue to manage the fund. 5/19
KORP American Century Diversified Corporate Bond ETF Kevin Akioka is no longer listed as a portfolio manager for the fund. Le Tran, Gavin Fleischman, Jeffrey Houston, and Charles Tan will continue to manage the fund. 5/19
AEDVX American Century Emerging Markets Debt Fund Kevin Akioka has announced his plans to leave American Century Investments. As a result, he will no longer serve as a portfolio manager for the fund. Thomas Youn, John Lovito, Margé Karner, and Brian Howell will continue to manage the fund. 5/19
ABHIX American Century High-Yield Fund Kevin Akioka is no longer listed as a portfolio manager for the fund. Le Tran, Gavin Fleischman, Jeffrey Houston, and Charles Tan will continue to manage the fund. 5/19
BGESX Baillie Gifford EAFE Fund Kavé Sigaroudinia will no longer be a portfolio manager for the fund. James Anderson, Thomas Coutts, Lawrence Burns, Brian Lum, and Julia Angeles will continue to manage the fund. 6/19
BGBKX Baillie Gifford Multi Asset Fund No one, immediately, but Patrick Edwardson is expected to retire effective on or about May 1, 2020. The rest of the team will continue to manage the fund while keeping an eye on the calendar. 6/19
MDLOX BlackRock Global Allocation Fund Kent Hogshire is no longer listed as a portfolio manager for the fund. Rick Rieder joins Russ Koesterich, David Clayton, and Dan Chamby in managing the fund. 5/19
HRCVX Carillon Eagle Growth & Income Fund No one, but … Brad Erwin will join Edmund Cowart, David Blount, and Harald Hvideberg on the management team. 6/19
LIIAX Columbia Corporate Income Fund No one, but … Timothy Doubek has returned from a medical leave of absence to resume his investment responsibilities as co-manager with Thomas Murphy. 5/19
ALDAX Columbia Limited Duration Credit Fund No one, but … Timothy Doubek has returned from a medical leave of absence to resume his investment responsibilities as co-manager with Thomas Murphy and Royce Wilson. 5/19
CMIEX Columbia Multi-Manager International Equity Strategies Fund Foster Corwith has retired and is no longer listed as a portfolio manager for the fund. The other sixteen managers will continue to manage the fund. 5/19
CRMEX CRM All Cap Value Fund Jay Abramson has retired. Robert Maina will continue to manage the fund. 5/19
DBALX Davenport Balanced Income Fund William Noftsinger, Jr. has resigned from Davenport & Company LLC. Christopher Pearson joins David West, George Smith, Robert Giles, E. Trigg Brown, John Ackerly, Christopher Kelley, Charles Gomer, and Michael Beall on the management team. 6/19
DAVPX Davenport Core Fund William Noftsinger, Jr. has resigned from Davenport & Company LLC. Christopher Pearson joins David West, George Smith, Robert Giles, E. Trigg Brown, John Ackerly, and Michael Beall on the management team. 6/19
DVIPX Davenport Value & Income Fund William Noftsinger, Jr. has resigned from Davenport & Company LLC. Christopher Pearson joins David West, George Smith, Robert Giles, E. Trigg Brown, John Ackerly, and Michael Beall on the management team. 6/19
DTCAX Dreyfus Sustainable U.S. Equity Fund Raj Shant is no longer listed as a portfolio manager for the fund. Rob Stewart and Yuko Takano join Jeff Munroe in managing the fund. 5/19
SSTGX DWS ESG Global Bond Fund Rahmila Nadi and Bernhard Falk are no longer listed as portfolio managers for the fund. Thomas Farina and Joseph Bowen are now managing the fund. 6/19
MGSFX DWS Fixed Income Opportunities Fund John Ryan, Kevin Bliss, and Onur Uncu are no longer listed as portfolio managers for the fund. Rick Smith joins Thomas Sweeney in managing the fund. 5/19
KTRAX DWS Global Income Builder Fund John Ryan and Kevin Bliss are no longer listed as portfolio managers for the fund. Thomas Farina and Scott Agi join Dokyoung Lee, Di Kumble, and Darwei Kung in managing the fund. 5/19
SPDAX DWS Multi-Asset Conservative Allocation Fund Pankaj Bhatnagar and Darwei Kung are no longer listed as portfolio managers for the fund. Sophia Noisten joins Dokyoung Lee in managing the fund. 5/19
SPGRX DWS Multi-Asset Global Allocation Fund, which becomes DWS Multi-Asset Global Allocation Fund Pankaj Bhatnagar and Darwei Kung are no longer listed as portfolio managers for the fund after the change in name. Sophia Noisten joins Dokyoung Lee in managing the fund. 5/19
PPLSX DWS Multi-Asset Moderate Allocation Fund Pankaj Bhatnagar and Darwei Kung are no longer listed as portfolio managers for the fund. Sophia Noisten joins Dokyoung Lee in managing the fund. 5/19
KSTAX DWS Multisector Income Fund John Ryan and Kevin Bliss are no longer listed as portfolio managers for the fund. Kelly Beam and Thomas Farina will now manage the fund. 5/19
EBABX Eaton Vance Core Plus Bond Fund Henry Peabody and Kathleen Gaffney are no longer listed as portfolio managers for the fund. Vishal Khanduja and John Croft join Matthew Buckley in managing the fund. 6/19
EVBAX Eaton Vance Multisector Income Fund Henry Peabody and Kathleen Gaffney are no longer listed as portfolio managers for the fund. Kelley Baccei, Justin Bourgette, and John Redding will now manage the fund. 6/19
FEAAX Fidelity Advisor Emerging Asia Fund No one, immediately, but John Dance is expected to transition off of the fund effective on or about December 31, 2019. Xiaoting Zhao joins John Dance on the management team and will continue to manage the fund upon Mr. Dance’s departure. 5/19
FSEAX Fidelity Emerging Asia Fund No one, immediately, but John Dance is expected to transition off of the fund effective on or about December 31, 2019. Xiaoting Zhao joins John Dance on the management team and will continue to manage the fund upon Mr. Dance’s departure. 5/19
FNMIX Fidelity New Market Income Fund No one, immediately, but John Carlson is expected to retire on or about December 31, 2019. Jonathan Kelly and Timothy Gill will continue to manage the fund upon Mr. Carlson’s retirement. 6/19
FPBFX Fidelity Pacific Basin Fund No one, immediately, but John Dance is expected to transition off of the fund effective on or about December 31, 2019. Bruce MacDonald and Kirk Neureiter join John Dance on the management team and will continue to manage the fund upon Mr. Dance’s departure. 5/19
FTEMX Fidelity Total Emerging Markets Fund No one, immediately, but John Carlson is expected to retire on or about December 31, 2019. Jonathan Kelly joins the rest of the team and will remain upon Mr. Carlson’s retirement. 6/19
FCARX Fiera Capital Diversified Alternatives Fund Geoffrey B. Doyle no longer serves as portfolio manager of the fund. Mark Jurish and Kazuhiro Shimbo will continue to manage the fund. 6/19
FEBAX First Eagle Global Income Builder Fund No one, but … Julien Albertini joins Edward Meigs, Sean Slein, and Kimball Brooker on the management team. 5/19
GABAX Gabelli Asset Fund No one, but … Brian Sponheimer joins Mario Gabelli, Kevin Dreyer, Christopher Marangi, and Jeffrey Jonas on the management team. 6/19
GNOM Global X Genomics & Biotechnology ETF James Ong is no longer listed as a portfolio manager for the fund. Kimberly Chan joins Chang Kim, Nam To, and Wayne Xie on the management team. 6/19
GDAFX Goldman Sachs Alternative Premia Fund Evgeny Gladchenko will no longer serve as a portfolio manager for the fund. Federico Gilly and Matthew Schwab will continue to serve as portfolio managers for the fund. 6/19
SFAFX Goldman Sachs Strategic Factor Allocation Fund Christian Morgenstern will no longer serve as a portfolio manager for the fund Matthew Schwab and Nishank Modi will manage the fund. 6/19
TTIFX Goldman Sachs Tactical Tilt Overlay Fund No one, but … Siwen Wu will join Sergey Kraytman and David Hale in managing the fund. 6/19
Various Goldman Sachs Target Date Funds Scott de Haai will no longer serve as a portfolio manager for the fund. Neill Nuttall joins Christopher Lvoff in managing the funds. 5/19
HNISX Harbor International Small Cap Fund Colin Riddles, Rosemary Simmonds, and Nicholas Williams are no longer listed as portfolio managers for the fund. Waldemar Mozes and Jonathan Brodsky will now manage the fund. 5/19
HSFAX HSBC Frontier Markets Fund Talib Saifee no longer serves as a portfolio manager of the fund. Jennifer Passmoor joins Razmi Sidani in managing the fund. 5/19
ICCCX ICON Consumer Discretionary Fund Scott Snyder is no longer listed as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICLEX ICON Consumer Staples Fund Scott Snyder is no longer listed as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICARX ICON Emerging Markets Fund Scott Snyder and Rob Young are no longer listed as portfolio managers for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICENX ICON Energy Fund Derek Rollingson will no longer serve as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
IOEZX ICON Equity Income Fund Derek Rollingson will no longer serve as a portfolio manager for the fund. Brian Callahan, Scott Callahan, and Donovan Paul will now manage the fund. 5/19
ICFSX ICON Financial Fund Derek Rollingson will no longer serve as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICTRX ICON Industrials Fund Rob Young is no longer listed as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICTEX ICON Information Technology Fund Derek Rollingson will no longer serve as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICNEX ICON International Equity Fund Scott Snyder and Rob Young are no longer listed as portfolio managers for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICBMX ICON Natural Resources Fund Rob Young is no longer listed as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
IOCZX ICON Risk-Managed Balanced Fund Craig Callahan will no longer serve as a portfolio manager for the fund. Brian Callahan joins Scott Callahan and Donovan Paul in managing the fund. 5/19
ICTUX ICON Utilities Fund Derek Rollingson will no longer serve as a portfolio manager for the fund. Brian Callahan, Craig Callahan, and Scott Callahan will now manage the fund. 5/19
ICMBX Intrepid Capital Fund Ben Franklin is no longer listed as a portfolio manager for the fund. Joe Van Cavage, Matt Parker, Clay Kirkland, Hunter Hayes, and Mark Travis will continue to manage the fund. 6/19
ICMIX Intrepid International Fund Ben Franklin is no longer listed as a portfolio manager for the fund. Matt Parker will manage the fund. 6/19
CHTRX Invesco Charter Fund Ronald Sloan will no longer serve as a portfolio manager for the fund. Benajmin Ram, Paul Larson, and Manind Govil will now manage the fund. 6/19
AGAAX Invesco Global Small & Mid Cap Growth Fund James Leach is no longer listed as a portfolio manager for the fund. Ryan Amerman joins Borge Endresen, Shuxin Cao, and Jason Holzer on the management team. 6/19
GTAGX Invesco Mid Cap Core Equity Fund Ronald Sloan will no longer serve as a portfolio manager for the fund. Matthew Ziehl, Adam Weiner, Raman Vardharaj, Magnus Krantz, Kristin Ketner, Joy Budzinski, and Raymond Anellow will now manage the fund. 6/19
VGRAX  Invesco Mid Cap Growth Fund James Leach is no longer listed as a portfolio manager for the fund. Ronald Zibelli and Justin Livengood 6/19
OPTFX Invesco Oppenheimer Capital Appreciation Fund Paul Larson will no longer serve as a portfolio manager for the fund. Erik Voss and Ido Cohen are now managing the fund. 6/19
OPPEX Invesco Oppenheimer Capital Income Fund Michelle Elena Borré Massick and Krishna Memani are no longer listed as portfolio managers for the fund. Scott Wolle, Christian Ulrich, Scott Hixon, Chris Devine, John Burrello, and Mark Ahnrud will now manage the fund. 6/19
OSVAX Invesco Oppenheimer Dividend Opportunity Fund Laton Spahr is no longer listed as a portfolio manager for the fund. Meggan Walsh, Christopher McMeans, Kristina Bradshaw, and Robert Botard are now managing the fund. 6/19
OAEIX Invesco Oppenheimer Equity Income Fund Laton Spahr is no longer listed as a portfolio manager for the fund. Meggan Walsh, Christopher McMeans, Kristina Bradshaw, and Robert Botard are now managing the fund. 6/19
QMGIX Invesco Oppenheimer Global Multi-Asset Growth Fund Benjamin Rockmuller and Alessio de Longis are no longer listed as portfolio managers for the fund. Scott Wolle, Christian Ulrich, Scott Hixon, Chris Devine, John Burrello, and Mark Ahnrud will now manage the fund. 6/19
QMAIX Invesco Oppenheimer Global Multi-Asset Income Fund Benjamin Rockmuller and Alessio de Longis are no longer listed as portfolio managers for the fund. Scott Wolle, Christian Ulrich, Scott Hixon, Chris Devine, John Burrello, and Mark Ahnrud will now manage the fund. 6/19
QVSCX Invesco Oppenheimer Mid Cap Value Fund Eric Hewitt and Laton Spahr are no longer listed as portfolio managers for the fund. Jeffrey Vancavage will manage the fund. 6/19
OVSIX Invesco Oppenheimer Small Cap Value Fund Eric Hewitt will no longer serve as a portfolio manager for the fund. Jonathan Mueller and Jonathan Edwards are now managing the fund. 6/19
CGRWX Invesco Oppenheimer Value Fund Laton Spahr is no longer listed as a portfolio manager for the fund. James Warwick, Kevin Holt, Charles DyReyes, and Davin Armstrong are now managing the fund. 6/19
IECAX Ivy Pictet Emerging Markets Local Currency Debt Fund No one, but … Robert Simpson has joined Mary-Therese Barton, Philippe Petit, Guido Chamorro, Carrie Liaw, and Alper Gocer on the management team. 6/19
MNVAX Madison Investors Fund Adam Sweet will no longer serve as a portfolio manager for the fund. Richard Eisinger joins Matthew Hayner in managing the fund. 6/19
MIGFX Massachusetts Investors Growth Stock Fund No one, but … Joseph Skorski joins Jeffrey Constantino in managing the fund. 5/19
MGJRX MassMutual Select BlackRock Global Allocation Fund Kent Hogshire is no longer listed as a portfolio manager for the fund. Rick Rieder joins Russ Koesterich, David Clayton, and Dan Chamby in managing the fund. 5/19
MMVYX MassMutual Select Small Company Value Fund Stephen Gutch, J. David Wagner, Glen Murphy, Martin Jarzebowski, Michael Abata, and Brian Morandi are no longer listed as portfolio managers for the fund. Shri Singhvi, James MacGregor, Miles Lewis, and Jeff John are managing the fund. 6/19
DIFAX MFS Diversified Income Fund Effective September 1, 2019, Ward Brown will no longer serve as a portfolio manager for the fund. In September, Neeraj Arora will join Robert Almeida, David Cole, Rick Gable, Matt Ryan, Jonathan Sage, Geoffrey Schechter, and Michael Skatrud on the management team. 5/19
MEDAX MFS Emerging Markets Debt Fund No one, but … Effective September 1, 2019, Neeraj Arora will join Ward Brown and Matthew Ryan in managing the fund. 5/19
TALTX Morgan Stanley Alternative Strategies Fund Matthew Rizzo is no longer listed as a portfolio manager for the fund. Zachary Apoian joins Sukru Saman in managing the fund. 5/19
MELAX Morgan Stanley Emerging Markets Leaders Portfolio Ashutosh Sinha will no longer serve as a portfolio manager for the fund. Vishal Gupta will continue to manage the fund. 6/19
TILUX Morgan Stanley Inflation-Linked Fixed Income Fund Jeremie Banet no longer serves as a portfolio manager for the fund. Stephen Rodosky joins Mihir Worah in managing the fund. 5/19
TSGUX Morgan Stanley Pathway Funds Small-Mid Cap Equity Fund Michael Whitfield, Stephen Knightly, Christopher Scarpa, John Schaeffer, Brent Miley, N. Carter Newbold, Dennis Scannell, and Peter Schliemann are no longer listed as portfolio managers for the fund. Thomas O’Neil, Scott Moore, Gary Mitchell, John McPherson, Bruce Kennedy, Matthew Dent, Chad Baumler, and David Adams join the other eight team members on the management team. 5/19
NDNAX Navigator Duration Neutral Bond Fund No one, but … Alexander Meyer joins K. Sean Clark and Jonathan Fiebach in managing the fund. 5/19
NTBAX Navigator Tactical Fixed Income Fund No one, but … Alexander Meyer joins Robert Bennett, Mason Wev, David Rights, K. Sean Clark, and Jonathan Fiebach in managing the fund. 5/19
NUSAX Navigator Ultra Short Bond Fund No one, but … Alexander Meyer joins Robert Bennett and Jonathan Fiebach in managing the fund. 5/19
NHINX Neuberger Berman High Income Bond Fund Patrick Flynn is no longer listed as a portfolio manager for the fund. Christopher Kocinski joins Joseph Lind, Daniel Doyle, William Covode, and Thomas O’Reilly on the management team. 5/19
NHSAX Neuberger Berman Short Duration High Income Fund Patrick Flynn is no longer listed as a portfolio manager for the fund. Christopher Kocinski joins Joseph Lind, Daniel Doyle, William Covode, and Thomas O’Reilly on the management team. 5/19
NCGFX New Covenant Growth Fund Patrick Kaser, James Clarke, Peter Thompson, Brian Kramp, Patrick Kelly, and Ankur Crawford are no longer listed as portfolio managers for the fund. David Hintz, Stephen Dolce, Paul Bouchey, and Thomas Seto will continue to manage the fund. 5/19
NCEGX North Country Equity Growth Fund Peter Capozzola is no longer listed as a portfolio manager for the fund. Alina Kindron joins Adam Horowitz in managing the fund. 6/19
NSBRX Nuveen Santa Barbara Dividend Growth Fund James Boothe will no longer serve as a portfolio manager for the fund. David Chalupnik and David Park have taken over management of the fund. 6/19
NUGIX Nuveen Santa Barbara Global Dividend Growth Fund James Boothe will no longer serve as a portfolio manager for the..

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