Think actively managed exchange-traded funds (ETFs) are taking the ETF concept too far? Maybe it depends on who is managing the ETF. Some, like the Horizons AlphaPro Managed S&P/TSX 60 ( HAX) might turn out to be OK, as argued in this article. Others, like the Horizons AlphaPro Gartman ETF ( HAG), may have taken it too far.
Never mind active how about hyperactive? The investment mandate of HAG, described in a nutshell: The manager uses fundamental, macro-economic and technical analyses to go long and short on a variety asset classes using a variety of investment vehicles. Phew! Seems like a lot of swinging at a lot of pitches.
HAG is run by Dennis Gartman, author of the investment newsletter The Gartman Letter. Will it prove as popular as his advisory? Time will tell. But its not off to a good start. As the one-year anniversary approaches (in late March), HAG is trading just under $9, below the initial listing price of $9.50 (after fees). Meanwhile the S&P/TSX 60 Index is up about 40% over the period.
The off-stage, verbal slugfest between Gartman and Fabrice Taylor, a Globe-and-Mail columnist has been interesting. It began after Taylor penned a Nov. 30 columnsuggesting Gartman was long on talk and short on results.
Gartman responded by sending Taylor an email taking issue with the column, setting off an exchange of accusatory missives. The exchange is posted on Taylors blog. Someexcerpts:
From: Dennis Gartman Sent: Monday, November 30, 2009 To: Fabrice Taylor Subject: A note from Dennis Gartman Dear Mr. Taylor, I read your note on my performance a short moment ago, and I have one or two major problems with your comments . Firstly, I was never contacted by you regarding my performance, although your note says that I refused to speak with you. That is simply not true . Secondly, I never called Mr. Buffett an idiot . The notion that I called Mr. Buffett an idiot was something that the internet spun up and out of control after a speech I gave earlier this year in Spokane, Washington [M]y performance was stellar in my Canadian fund until two instances in recent weeks wreaked havoc upon me. One was the surprise purchase of Marvel Comics, which was my largest short, by Disney and the second was the massive one day collapse of Molsons on a day when its earnings were stellar and yet the stock fell 11%….Regards, Dennis Gartman
From: Fabrice Taylor Sent: Monday, November 30, 2009 To: Dennis Gartman Subject: Re: A note from Dennis Gartman Dear Mr. Gartman: Its an inauspicious start to our dialogue that you call me a liar though. I am happy to supply you with my cell phone records, which will show that I did indeed call you twice last week and left a message . Im not lying, so please dont say or otherwise imply that I am. Were not going to get along at all if you do. As for telling the truth, here is a quote from the Wall St. Journal, June 19, 2009: The Oregonian reports: Warren Buffett is an idiot, he [i.e. you, Dennis Gartman] said, emphatically, in a short interview after the speech. Shame on Warren Buffett. Thatll be a good quote for your article. This isnt something manufactured in the Internets vortex. Its you speaking to a journalist. Is the Oregonian lying?As for your pairs trades and your unfortunate short sale of Marvel, who cares? The numbers speak for themselves.Sincerely, Fabrice Taylor
From: Dennis Gartman Sent: Monday, December 1, 2009 To: Fabrice Taylor Subject: A 2nd note from Dennis Gartman Mr. Taylor, I do hope we can talk Im actually looking forward to speaking with you to set the record straight on both sides. Over the years Ive learned very, very often that the calls that begin in animosity end more often than not in friendship. Lets hope that that happens in this instance.
Regards, Dennis Gartman
The correspondence seems to end there. Taylor writes in his blog:
Friendship? Not quite. Our conversation didnt go much better. Mr. Gartman insisted that I hadnt called him, and he called The Globe to make the same allegation. Heres a copy of my cell phone bill [see his website].