http://www.marketwatch.com/news/story/top-small-cap-stock-fund-reopen/story.aspx?guid=%7BE5A2C22B%2D81F0%2D4254%2DABAC%2DE970B16C6F0D%7D&dist=msr_4

Nemesis

Anyone thinking of getting into this fund???  Any better small cap funds out there?  Thanks.  Monty

This is another small cap gem which just recently re-opened.  The returns are better than TASCX, and it's also a low risk fund.  I bought into this one!

Baxter

Baxter,

Ok, you really got my attention with PNVDX - I had never heard of it before you mentoned it above. Interesting that they beat their index in the rough spell from 2000-2002 while badly underperforming when the market snapped back in 2003. You're right: it's "lower risk." I'm impressed with management. Long tenure. Relatively consistent results. What else do you know about this fund?

Ditto.

I ran a quick comparision between TASCX and PNVDX.

They have identical annual turnover of 27% and an identical 5-year annual return of 15.78%!

Overall, however, PNVDX tends to come out slightly better.

The only negatives I could identify in my cursory examination were a slightly higher expense ratio [PNVDX 1.21% vs. TASCX 1.10%] and an unethical 12b-1 fee of 0.25% charged by PNVDX.

On the other hand, Schwab does not charge a fee for PNVDX, so that represents a savings of $49.95--in my account at least.

Jagor 

Also, let's not forget that Allianz is a publicly held company that lost one of the PM since Pimco/NFJ was purchased by them.  I do not hold any funds of publicly held companies because I believe they are less aligned with shareholders and tend to stick around for far shorter periods of time.  Third Avenue (I also do not own but would buy first between these two options) is still independently run with a young PM and a deep analyst bench that knows only one way of investing.  The Whitman Way.  JMO

Here are two recent articles about PNVDX which provide a little more info about this fund.

http://news.morningstar.com/articlenet/article.aspx?id=236788

and

http://www.smartmoney.com/undertheradar/index.cfm?story=20080507-Allianz-Small-Cap-Value

Baxter

 

FYI

The Third Avenue funds were sold to Affiliated Managers Group, a publicly traded company (ticker: AMG), several years ago.

'tato
 

With respct to valunvestr's comment taht some mutual fund companies are publicly-held whereas others are private, it is indeed an important matter to consider when purchasing a mutual fund.

The potential conflict-of-interest between the fund managers and the mangement of the fund companies on the one hand and the customers on the other is an area of concern and is addressed by Louis Lowenstein in his book The Investor's Dilemma, recently reviewed in Barron's.

Thus there are several points to be made: first, at least 95% of all the mutual funds currently open for ivnestment are wothless wastes of money.  And it also happens that most of those funds are, indeed, products of for-profit, publicly-held companies, usually banks or insurance conglomerates.  Furthermore, a lot of the fund managers of publicly-owned companies do not even invest one red cent of their own money in the funds they manage; they prefer to play Monopoly with their customers' hard-earned savings.

But it is also true that many of the worthless funds are managed by employee-owned or privately-held companies.  And as Dan Wiener has pointed out recently, a surprisingly large number of Vanguard's fund managers don't care to invest in the funds they manage--and Vanguard is run as something of an investor-owned co-operative venture.

Thus there is no real cause-an-effect relationship that can be demonstrated between above-average returns of a mutual fund and the fact that the company is privately owned.

Finally, as 'tato reminds us, Third Avenue funds are no longer privately owned.  So, it seems the question is now moot.

I have conducted some additional due diligence on PNDVX and it still looks pretty appealing. For example, NFJ describes itself as a "deep value" shop, which sounds good to me.

Jagor  

I never suggested the returns are likely to be better because the firm is privately held.  I think the management is more likely to stick around though.  If you have two proven strategies, I would prefer to choose the one where the manager is more likely to stick around.  In this case, I think it is Third Avenue. 

This long-short SC fund has been quite successful on relative terms during its short three-year lifespan and the managers apparently have a large personal stake.  It's essentially a "quant" fund. 

I own and like it.  This is a difficult market and I make a point of carrying some positions that are relatively uncorrelated with the indexes. 

PNVDX looks interesting.  Thanks for mentioning it. 

FWIW. 

[quote user="norbertc"]

This long-short SC fund has been quite successful on relative terms during its short three-year lifespan and the managers apparently have a large personal stake.  It's essentially a "quant" fund. 

I own and like it.  This is a difficult market and I make a point of carrying some positions that are relatively uncorrelated with the indexes. 

[/quote]

Norbert,

You do manage to find some odd funds.  2.48% ER and 492% turnover ratio?!   The high turnover and diverse portfolio (393 holdings) is not unusual for a quant fund, which is one reason I don't particularly like them.   (Although I think they make more sense for SC funds than LC funds, since detailed information and analysis is harder to come by on small companies.)   With "black box" quant funds there's little to go on except past performance, and while this fund's past performance looks good, the future never repeats the past.   I always prefer to put my money in the hands of a human (or humans) whose brains and instincts I trust rather than a computer model which performed well in the past.   (The history on this particular fund is in fact limited.)   Didn't quantitative hedge funds get into trouble last summer?

M* touched on long-short funds in this article, and if you scroll down to the paragraph "Long-Short Disappointment" you'll see they are panning your fund TFSMX while praising HSGFX.   (Which reminds me, I haven't seen much recently written here about the erstwhile econometricist and fitness guru John P. Hussman (Ph.D.).)

Re TASCX: own it, like it.   Last couple of years it has been low in volatility because of its large cash stake, but it spent mostof that by the end of last year, and it's still turned in a very good 2008.   Jensen's commentaries are fantastic, I actually like them better than Whitman's.   Simply put, I trust this guy with my money.   I wish the fund didn't reopen because they let cash climb to 40% before they closed it, which is way too high.   TASCX and TAVIX are at the top of my list for adding new money. 

BTW Norbert: many people (and all the Lebanese) speak French here in Dubai.   We have a spacious villa a couple of minutes walk from the beach, and you are very welcome to come visit us and sample Dubai's pleasures while doing research for your investment in TRAMX.

Actually, yes, you are correct but they are left independent to run their firm and portfolios with autonomy.  It is also their call as to when to open and close their funds.  I do not believe that to be the case at Allianz.  I can be wrong but there big bank/insurance companies tend not to be hands off as an AMG.

[quote user="Chang"]

You do manage to find some odd funds.  2.48% ER and 492% turnover ratio?! 

[/quote]

Hey, it's working!  True, TFSMX got clobbered back in July, 2007, but look how fast it has bounced back!   I dedicate a certain percentage of my portfolio to investments that have low market correlation.  Plus these guys have their own money in the fund and I think they're on to something.  TFSMX's three-year returns are at the top of the scale. And look at its risk ratings:  have you ever seen a Beta that low (.37)?  With a decent Alpha (8.79)? These guys are no Hussmans. 

Well, I shouldn't be too cocksure.  It's still early. 

Most of my money is also with humans.  Your OAKBX recommendation became my largest holding - before the credit mess started.  Thanks again for that. 

Remember the Vix strategy I mailed you last year?  I traded it during the Fall and Winter and have 100% successful trades.  The account is up 20% since July.  And they all laughed at norbertc ...

It's actually slightly funny that you wouldn't invest in TRAMX, but ended up moving to Dubai.  Please let me know if you notice the vacancy rates shoot up ...
 

[quote user="norbertc"]

It's actually slightly funny that you wouldn't invest in TRAMX, but ended up moving to Dubai.  Please let me know if you notice the vacancy rates shoot up ...

[/quote]

The pace of construction of new residential and commercial space is unbelievable.   They can build 7 stories a week on skyscrapers.   And when you look at an apartment or villa, if you like it you need to whip out your checkbook on the spot (and pay a deposit...followed by the full 12 months rent when you get the keys) because otherwise it will be gone tomorrow.

A 4BR villa in a good location rents for about $8,000 a month.

I like the idea of TRAMX but I think a lot of people don't appreciate the risks.   On principle, I won't buy into a fund like this until after a nice collapse, like maybe 50% (as happened in China - and I still wouldn't touch a China fund).

Despite the technical marvels of Dubai, this is still a third world country.

Chang,

As I recall, most of the stock markets in the Gulf countries already have had "nice collapses, like maybe 50%."  In fact, if I remember correctly, some of them even crashed more than that, and more than once.

Certainly there is currently an overheated real-estate market in the Emirates, particulalry Dubai [former colleagues of mine were buying and flipping apartments there to supplement their salaries and one of them won a red Lamborghini in a raffle--the buyer of each apartment got a free ticket--true story]. 

But that alone is no reason to dismiss TRAMX, since it is not a "Middle East and Africa real estate fund," but rather a fund of mostly banks, materials and telecom--which is just what you would want in a Middle East investment portfolio.

And one other item about the Gulf that hasn't been widely reported in the media concerns Abu Dhabi which is in the midst of constructing Masdar City, the world's first zero-carbon, zero-waste, car-free city. Plans call for the green, sustainable city to open by 2009.  President Bush saw a model of Masdar City during his visit to Abu Dhabi in January, 2008. 

Isn't it ironic that a country that derives most of its revenue from oil and natural gas which it sells to the hydrocarbon-gobbling consumer countries has found the vision to create a totally carbon-free, car-free city?

Jagor  

Chang,

I understand your concern on the ME funds.  I'm wonder if there is a different play here that will also work.

China growth has been within for buildings and infrastructure materials, they have manufacturing. 

Mid East is building a lot, but they don't manufacture the infrastructure materials do they?  such as wiring, fuse boxes, outlets,  etc..  I'm guessing they import the parts used in the buildings, and other infrastructure stuff.  From Europe? or Asia?

Europe is close, transportation less..  How much of the material is imported?  Cargo ships?  I know China is rapidly building more cargo ships..

Can you tell if there is any other plays from the ME expansion?

[quote user="kerryvan"]

Can you tell if there is any other plays from the ME expansion?

[/quote]

Give me some time to settle in, and perhaps I'll be able to contribute something useful.  I can say that it's clear to the U.A.E.'s rulers that the oil supply is finite and they need to diversify their economy away from oil.   And they have.  They have a huge financial industry here in Dubai.  The DIFC -- Dubai International Financial Center -- where I work, is a collection of banks, insurance companies, investment companies and other financial firms.  (Qatar and Bahrain are competing with Dubai for a piece of the financial pie.)  

Tourism is also big, especially for wealthy Russians who love the beaches.   And of course, real estate development companies operating all over the Middle East.  I'll bet the fraction of GDP derived from oil is much lower today than it was 10 years ago, though I don't have the figures at hand.

We should not assume that the Gulf countries "don't manufacture the infrastructure materials...such as wiring, fuse boxes, outlets, etc."

Small- and mid-sized industries started up several decades ago, particularly in Saudi Arabia. 

Just a few examples: For many years the country has manufactured air conditioners specially designed for harsh  Gulf weather condition.  There is also a local pharmaceutical industry. The Al-Safi farm is--or was--the world's largest dairy farm.  And Mercedes-Benz has been assembling trucks at a plant in Jeddah for many years. 

These examples are just off the top of my head, but they are indicative. As Chang indicates, the Gulf countries understand that they must diversify away from their reliance on the export of crude oil and natural gas

Jagor 

.

Thanks Jagor,

I haven't been there, so I'm a not knowner.  I was wondering if there is some other area that would have the growth due to the rapid expansion, something they import.

With all the rapid growth around the world, it would appear that natural resources, food, and middle income lifestyle are the long term demand items.  these won't have the same ups and downs over the next few yrs.

Unfortunately, RYPRX is still closed.

Check out RPFFX.  This fund, like PNVDX I mentioned earlier, is also available NTF at Schwab.  M* says it's closed, but Schwab's site says it's open and available.  RPFFX would pair nicely with PNVDX.  Both are great funds!

Baxter