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Post by anitya on May 28, 2021 2:32:16 GMT
Just an FYI - This China fund today declared a distribution of capital gains that amounted to 48+% of its NAV. Hopefully, it did not cause heart attacks to investors who saw a NAV drop and did not initially know that there was a distribution. I think the fund was up ~1% for the day, after taking into account the distribution.
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Post by yogibearbull on May 28, 2021 2:46:08 GMT
M* Analyst latest report dated 4/15/21 describes fund changes that probably prompted this huge off-December distribution:
"AMG Managers Emerging Opportunities will soon undergo a complete overhaul under a new subadvisor, changing from a U.S. microcap fund to a China fund, and it will be considerably more attractive within its new niche. We’re upgrading its Morningstar Analyst Rating to Silver from Neutral for both share classes.
After many years as a U.S. micro-cap fund with multiple subadvisors, this fund will change its name to AMG Veritas China on May 22, 2021, at the same time that Veritas Asset Management becomes the sole subadvisor. The new portfolio manager will be Ezra Sun, who has managed the European-sold UCITS version of Veritas’ Asian strategy since its 2004 inception, with outstanding results. (He also began managing a U.S.-sold fund with the same strategy, AMG Veritas Asia-Pacific MGSEX, on March 19, 2021.) He is aided by three analysts, each of whom has been with Veritas for more than a decade and has 20 years of industry experience....."
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Post by chang on May 28, 2021 3:56:34 GMT
Just an FYI - This China fund today declared a distribution of capital gains that amounted to 48+% of its NAV. Hopefully, it did not cause heart attacks to investors who saw a NAV drop and did not initially know that there was a distribution. I think the fund was up ~1% for the day, after taking into account the distribution. Shareholders might have heart attacks when they calculate their 2021 taxes. |
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Post by anitya on May 28, 2021 4:19:13 GMT
M* Analyst latest report dated 4/15/21 describes fund changes that probably prompted this huge off-December distribution: "AMG Managers Emerging Opportunities will soon undergo a complete overhaul under a new subadvisor, changing from a U.S. microcap fund to a China fund, and it will be considerably more attractive within its new niche. We’re upgrading its Morningstar Analyst Rating to Silver from Neutral for both share classes. After many years as a U.S. micro-cap fund with multiple subadvisors, this fund will change its name to AMG Veritas China on May 22, 2021, at the same time that Veritas Asset Management becomes the sole subadvisor. The new portfolio manager will be Ezra Sun, who has managed the European-sold UCITS version of Veritas’ Asian strategy since its 2004 inception, with outstanding results. (He also began managing a U.S.-sold fund with the same strategy, AMG Veritas Asia-Pacific MGSEX, on March 19, 2021.) He is aided by three analysts, each of whom has been with Veritas for more than a decade and has 20 years of industry experience....." , I read it a week ago and put it on a watch list. This is essentially a new fund (minus the AUM grab) cause we can not call a US microcap fund the same as a China centric fund. How does M* start the fund off with any rating at all - not to mention a silver rating? Is that normal? |
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Post by yogibearbull on May 28, 2021 12:06:31 GMT
I was also surprised by M* rating decision. Normally, it suspends or downgrades ratings on manager changes and/or fund restructuring, sometimes unfairly IMO [e.g. on long planned/announced transitions by Price, etc]. But in this case it made an exception - it rated the restructured fund in its new category based on new manager's reputation and record.
I just looked up the fund and analysis after your post because funds typically don't make such large off-schedule distributions. I think that funds are required to do that on major fund restructurings.
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Post by anitya on May 28, 2021 17:28:17 GMT
Just an FYI - This China fund today declared a distribution of capital gains that amounted to 48+% of its NAV. Hopefully, it did not cause heart attacks to investors who saw a NAV drop and did not initially know that there was a distribution. I think the fund was up ~1% for the day, after taking into account the distribution. Shareholders might have heart attacks when they calculate their 2021 taxes. Manager or sub adviser changes are always risky for active funds’ tax efficiency. A reason not to hold active funds in taxable accounts. BTW, even index ETFs can hit us with unexpected excess distributions when they switch indices they are based on - does not happen often but it does happen. I think only funds with “tax managed” in their name and passive index funds like SPY, QQQ, BND, etc. are the ones that are least likely to surprise us with unexpected excess distributions and are more suitable for taxable accounts. There is never a clean answer though as our goal should be after tax total return - do the best one can! |
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Post by mrbilbobaggins on May 30, 2021 23:53:07 GMT
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