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"Austrian" Investment Themes, Investments and Planning

Fund Review: Manager Change for Ivy Asset Strategy

As noted in a previous fund review the Ivy Asset Strategy Fund has for nearly twenty years been a great actively managed fund for investors who are concerned with investment red flags raisedGlobe paper fund review by a belief in Austrian School Economics.   An early foray into gold (circa 2003), a willingness to move quickly to cash as well as an aggressive hedging strategy allowed “Austrians” to protect themselves while still participating in up markets when Austrian investment themes were otherwise not the flavor of the day.

Unfortunately earlier this month parent company Waddell and Reed announced that long time manager of Ivy Asset Strategy Fund Michael Avery would be retiring as of June 30th.

As good as the fund’s long term track record has been, the last few years have been tough sledding. As noted in a previous fund review we speculated that perhaps there was something at work in terms of the recent management of the fund, which led to the resignation of former co-manager Ryan Caldwell back in 2014.

A recent note on Morningstar ($) reflecting on the latest manager change seems to confirm that such guess work was not too far off the mark:

“Avery’s departure comes as a surprise and represents a meaningful loss for the firm. He serves as the longest-tenured manager on this fund and has been widely viewed as the heir apparent to CEO Hank Herrmann…Morningstar downgraded the fund’s People Pillar rating to Neutral when its former co-manager Ryan Caldwell departed in June 2014. His exit was unexpected and represented a major blow to the fund, as he played a key role in the portfolio’s positioning and security selection.”



It should be said that without question the new managers Cynthia Prince-Fox and Chace Brundige are well well qualified to step in and are long tenured with the company. Fund literature and outlook and continues to parrot themes that followers of Austrian School Economics are typically concerned about.

While it may be easy to simply attribute performance concerns to the fact that the last several years have been very difficult for Austrian themed investing, the fund has failed to really distance itself from the pack in spite recent turbulent markets seen both last fall and the beginning of this year. In addition one of the things that made the fund special in the past was to provide downside protection while also participating significantly in the upside of good markets.

Given the upcoming retirement of Mr. Avery along with the fund’s recent disappointment, it would be wise for current investors to at least consider alternatives to the offering. Indeed Asset Strategy’s former co-manager Ryan Caldwell has recently co-founded a new firm with a somewhat similar fund offering that bears keeping an eye on.

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DISCLAIMER: Nothing in this article should be construed as a personal recommendation or advice. Nor should anything in this article be construed as an offer, or a solicitation of an offer, to sell or buy any investment security. Barnhart Investment Advisory Principal and clients may hold positions in securities mentioned above, and subject to change without notice. Consult your investment professional before investing.



  1. Pingback: Fund Review : Ivy Asset Strategy Fund | The Austrian School of Investment Thought - February 25, 2016

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