I fail to see where they’ve yet changed the approach. The 2-3 page statement sounds like it was written by a committee. I might ask “Why change now?” since the past couple years seem to have been very good considering the type of fund. In recent years they’ve kept close to 70% in equities - higher than their “balanced” designation might suggest. ISTM they’ve had near 20% foreign holdings in the recent past, if not now. One concern will be fees. If they go into alternatives that may jack-up fees a bit.
Interesting line. Wonder what date they made this shift? Obviously the past couple weeks have seen some modest yield increases.
“More recently, we have reduced the Fund’s equity exposure in light of higher equity valuations and modestly more attractive bond yields.”

Thanks. I hope this thread can discuss investable funds in the subject space.
As an aside, I took your chart back to 10 years. XLE total return was only 20% while ICLN had nearly 10 times as much. Seems like investors have been working out the transition for a while.

OAKMX and OAKLX did not beat SPY during the last 10 years, but since inception of OAKLX in 1996, it is up 1780%, whereas SPY is 936% up, and VTV (Vanguard Value) is 761%. Thus OAKLX significantly outperformed both S&P 500 and Value index since inception. I would not necessarily bet my house on its future outperformance, but I take Nygren's opinions seriously.

“We expect equity investors to perform well relative to bond investors over the next decade. We also believe that our portfolios are more attractively priced than the S&P 500.”
Hard to disagree as worded. “our portfolios” doesn’t mean the same as what you, I, or somebody else may own. And they seem to disavow the S&P. Unfortunately, we’ll have to wait 10 years to see if the manager’s perceptions re his portfolio are accurate.
Note that the blurb does not differentiate among bonds, lumping all into one hopper. Well, now, there are short, intermediate and long term bonds. Corporate and sovereign. Investment grade and poorer quality. U.S. domiciled and those from other nations. And, there’s EM as well.
I think for many of us the past week is a great opportunity to compare how different asset class we held faired compared to one another. It hasn’t been too often that so many different assets suffered together (Maybe Qtr 1, 2020?).
When all is said and done, I’m glad I had exposure to bonds last week. RPGAX (30% bonds) fell 1.48% as compared to PRWCX which lost over 2.0%%. My worst performing bond fund, DODIX, fell 1.07%. In contrast, my worst performing equity holding, WPM, fell over 10%. Equity funds themselves were all over the place of course. Those heavy into banks saw gains. Similar variance existed among various alts, long shorts, etc. PRPFX surprised, losing just 1% for the week, despite exposure to gold, bonds and growth stocks.
So, if you have a 10 year or longer time horizon and can live with higher volatility, send your $$ to the folks at Oakmark. BTW - I read a lot of Dodge & Cox’s commentary. They might well have written the same blurb.

I own BGAFX and MIOPX, have had for several years. My reasons for buying are still valid, so I am holding and will add/rebalance if this slide continues. Both are MFO Great Owl funds with proven management. They hold foreign and global high quality GROWTH stocks, and the rotation to value is evident. I had trimmed a bit from them in the fall as part of my regular rebalance, along with some risk reduction at the time. If I were to sell now, I think I’d be making the same mistake I’ve made in the past… watch a great fund fall, and sell at lows. These are more B&H core funds.
Best of luck,
Rick

@Derf, Not sure if the following is what you are asking -
If the fund prospectus provides for exchanges between classes (i.e., conversion), then one can exchange (convert) tax free, and the prospectus would say it. These conversions are pretty routine for a lot of fund families. But certain brokerages may not participate in conversions, in which case, one is stuck with selling one class and buying the other in a taxable transaction, subject to wash sale rules or simply transfer the fund out to another brokerage that participates in conversion and convert there. (E.g., Schwab did not convert until a couple of years ago and I have no knowledge of their current status but Fidelity converts quite routinely.) If a fund is closed to new investors, that prohibition may extend to conversions.

"(I personally faced a similar decision years ago. I owned service class shares of a fund. The A shares, with a slightly lower ER, were subsequently offered load-waived. The fund declined to do a tax-free exchange for me. So I continued to hold the higher cost service class shares.)" as per @msf
Does that decision still hold today ? In other words does the fund , any fund, dictate if the exchange is taxed or not ?
Thank you much, Derf

What happened was that investors sold retail fund holdings and purchased institutional fund holdings. Such a move would have been a taxable event had it been done in taxable accounts, but employer plans (e.g. 401(k)s, 403(b)s) are tax sheltered.
If someone had between $5M and $100M in a taxable retail TDF, it is unlikely that one would have sold shares (recognizing personal cap gains earlier in 2021, before distributions). The cost of the taxes on the realized gain would likely have outweighed the benefit of switching to a lower ER fund.
(I personally faced a similar decision years ago. I owned service class shares of a fund. The A shares, with a slightly lower ER, were subsequently offered load-waived. The fund declined to do a tax-free exchange for me. So I continued to hold the higher cost service class shares.)
Investors weren't selling off shares because they wanted out. They were just moving to a lower ER replacement fund. So whether retail or institutional series had higher unrealized gains seems somewhat moot. That said, I agree that the younger institutional series was likely to have had lower unrealized gains.
Since Vanguard decided to merge the series entirely, there wouldn't seem to be much point in merging the employer plan investors and then months later merging the rest of the investors. Had Vanguard given this enough thought to realize that the first change (lowering the institutional min) would trigger the mass migration, it could have skipped that step completely and merged everyone at once.

Sold TMSRX in 2021 with some small profits. I did the same thing with ACVVX QMNNX PAUAX MFLDX years ago. ADANX is on my watch list and I may reduce my holdings in that one. Once they start declining I'm gone, because I don't have confidence that these funds work in every market. There's enough funds like BAMBX CVSIX ARBOX VARAX that continue to work for me. I probably should just simplify and go with funds like VWINX AONIX EXDAX FIKFX .

I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

Just curious, when did you start buying ARKK and ARKG? Is it for a trade or a long term portfolio holding?
I did buy a little bit of ARKK yesterday. I am not putting any money into ARKK that I can not afford to lose. This is not Cathy's first rodeo but I do not see any trophies from past rodeos.

Long term, first buys June 2020. Even in ARKK. Down 8% in ARKG. buying only the big dips. I think this will work out over time, or at least do better than the broad market.

@LewisBraham, that is why Vanguard replaced IT/LT TIPS VIPSX with ST TIPS VTAPX a few years ago in its VG target-date fund (TDF) series.

I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

Just curious, when did you start buying ARKK and ARKG? Is it for a trade or a long term portfolio holding?
I did buy a little bit of ARKK yesterday. I am not putting any money into ARKK that I can not afford to lose. This is not Cathy's first rodeo but I do not see any trophies from past rodeos.

@Hank, I don't own it; did own HSTRX about 12 years ago for a while. A friend owns HSAFX now and isn't too unhappy with it, but you know what they say about a stopped clock.
But then the best I did yesterday was zero from NVHAX, EIXIX, and PQTAX.

I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

@wxman123 -- Bank MM funds yield around 0.4 to 0.5%. FDIC insured so 100% risk free. Are you expecting your near cash holdings to provide a higher return?

Yes, that would be the objective but doesn't always work out. Over the longer term, these "near cash" vehicles should outperform high yield FDIC insured bank accounts, but that's not generally how I use them. I mainly use them in retirement accounts where the only viable, comparable option is near zero MM funds. Over the last 3 years VNLA has earned a total return of 2.39% with very little heartburn. I don't think you could have gotten that even in the highest yielding fully liquid bank accounts.

I would probably opt for STIP for short-term TIP exposure, lower fees 0.05% versus 0.15% and shorter maturity bonds--0-5 years--so less sensitive to rising rates. VTIP also has lower fees. But TIPS in general look pricey right now.

Still not phrasing my question well, evidently.
Higher fee notwithstanding, TIPX has outperformed those other two competitors handily for 9/5/3/2y, but has trailed, nontrivially but perhaps unimportantly, 1y and less, meaning recently. Was wondering about any informed thoughts as to that, and longer-term prospects for any of them.

I’m not sure how Christianity entered the picture here? Maybe Wood’s religion?
I can’t see much difference between stopping at a convenience store in Michigan on the way home from work and picking up a 6-pack of beer along with a half-dozen state lottery tickets and than watching the state sponsored “live drawing” on TV that evening, and wagering $5 or $10 online on a sports event you’re viewing at home.
There are a lot of vices in this world. Gambling is one. And more so when it involves amateur athletes. I agree. But, as think @Mark suggested, you can visit any live casino and bet on a college game just as you would at home. I don’t think @LewisBraham has been in many casinos. I haven’t either. But the few I have been in are highly addictive in atmosphere. The sounds, the flashing lights, the skimpily clad waitresses. All of this is compelling to the addictive personality who tends to stay too long at the bar and run up an excessive betting tab. I avoid live casinos like the plague.
The online casinos are taxed heavily. I don’t think 100% of it goes to education; but a lot of it does. In fact, it’s the heavy state taxes on profits (50% in NY) that is making it difficult for the online casinos to stay viable. Be careful what you wish for, because that revenue is critical to the government and would need to be made up from other sources.
Come to think of it … Any one of us can log-in to Fido or Schwab or VG any time, day or night, and place a “bet” on any number of highly speculative stocks, currencies or ARKK-like funds. But, we don’t call it “gambling”. It’s “investing.” :) Yes, the motive and purpose may be more noble - but the addictive nature and potential for great harm are very similar. If you doubt my analogy here, consider the very words that graced the home page of “Fund Alarm“ for many years. It was a line from the Kenny Rogers song: “The Gambler” .

You are correct, I inadvertently read off YTD rather than 2021 numbers in some cases. Thanks for spotting my errors!
SNGVX really did lose almost a full percent, but you have the correct figure for BBBMX.
GILPX did eek out a 0.02% gain (still effectively zero) rather than lose 0.07%.
But MERFX did really lose 0.19% (still virtually zero), VNLA did really lose 0.18% (again, virtually zero).
BSV did worse than I reported, losing over 1% in 2021.
T-notes (maturities of 2-10 years) saw yields go up by 0.6% to 0.9%:
2 year rose from 0.11% to 0.73%,
3 year rose from 0.16% to 0.97%,
5 year rose from 0.36% to 1.26%,
7 year rose from 0.64% to 1.44%,
10 yr rose from 0.93% to 1.52%
Though yields on T-bills rose only slightly, with the shortest maturity bills even having yields fall:
1 mo dropped from 0.09% to 0.06%
2 mo dropped from 0.09% to 0.05%
3 mo dropped from 0.09% to 0.06%
6 mo rose from 0.09% to 0.19%
12 mo rose from 0.10% to 0.39%
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2021
Since interest rates did not move in tandem, how a portfolio was affected depended on its distribution of bonds. Two portfolios with the same average duration could have all bonds of the same, relatively short duration (thus not much affected by rising rates), or a mix of very short term and somewhat longer duration bonds (with the latter losing more value).

I would probably opt for STIP for short-term TIP exposure, lower fees 0.05% versus 0.15% and shorter maturity bonds--0-5 years--so less sensitive to rising rates. VTIP also has lower fees. But TIPS in general look pricey right now.

But since I use MERFX as a cash substitute, 2%-3% per year is fine with me

The problem is for me a cash substitute fund cannot have sustained a loss greater than 2% in a year, and preferably no loss ever. Why take the risk with such meager returns? My cash subs include, SNGVX (1 off year in 31, so it gets a pass on my 2% rule); BBBMX; GILPX, VNLA (ETF) and even good old BSV (ETF). You can buy with confidence that any loss will be small and temporary. Not so clear with MERFX, which suffered a 5.67% loss in 2002 and 2.26% loss in 2008.

Not picking on anyone here, just remembering the statement that SNGVX had only one losing year out of 31. It's now 2 losing years out of 34, with nearly a 1% loss last year. Not much, but something one hopes not to see with a fund used in lieu of cash.
FWIW, BBBMX stayed in the green, gaining 0.01%.
GILPX did not, losing 0.07%. Likewise, MERFX lost 0.19%, VNLA lost 0.18% and BSV lost 0.12%.
These five funds, win or lose, came so close to zero that one might as well think of them all as having broken even. SNGVX was a different story.
Meanwhile, RPHYX kept chugging away, gaining 1.8% last year. Only 11 calendar years so far, but not a single loss.
I'm also taking a closer look at VMLTX. Only 1 losing year out of 34; that was just a loss of 0.16% in 2016. It normally maintains a higher than average duration to get higher returns. But it has shortened its duration to bring it in line with its peers, showing that it can be managed conservatively if conditions warrant.
My parents used this fund in retirement. Yes,

this is still your father's VMLTX.

It was a tough year in this space, but your numbers seem off based on my personal data and MS. BSV was down 1.09 but BBBMX was up 1.18%. For the year as a whole in 2021, my "near cash" holdings were down .04%. Not great but I can live with it. Wish there were better options but I've yet to find one's I'm comfortable with. Hard to argue about RPHYX, which I hold, but would be reluctant to put big dollars into (or most of these vehicles). While things like SNGVX had a bad year I'm OK with that (based on rising rates) rather then risking a serious loss on defaults as is a bit more likely with most of the others. It happened with ZEOIX, which recovered, but stung when it happened.