Hi Guys,
For those of us who seek excess returns, after the primary task of an asset allocation decision, the next most critical challenge is that of Finding Active Manager Expertise (FAME).
Given the sorry performance of most active mutual fund managers, this is not an insignificant task. The search harbors many false signals, and wealth depleting pitfalls and traps. As the old saw goes, “past performance is no guarantee of future performance.” Study after study reinforces this long standing truism. Even financial advisors, who spend all their time and resources attempting to identify superstar managers, often fail. The record is far from encouraging in terms of executing FAME.
David Snowball acknowledged this difficulty in his superb July Commentary. Here is a partial extract from his Dustbin of History section:
“In case you hadn’t noticed, Litman Gregory Masters Value Fund (MSVFX) was absorbed by Litman Gregory Masters Equity Fund (MSENX) in late June, 2013. Litman Gregory’s struggles should give us all pause. You have a firm whose only business is picking winning fund managers and assembling them into a coherent portfolio. Nonetheless, Value managed consistently disappointing returns and high volatility.”
David concluded by asking the question that is partially addressed in this post: “what’s the chance that professionals can assemble a team of consistently winning mutual fund managers?”
By way of full disclosure, I have owned multiple Litman Gregory mutual funds. I joined the original fund at nearly its inception in 1997. I liked the idea of a disciplined selection process designed to unearth superior managers coupled to the concept of a highly focused portfolio to augment the odds for excess returns. The dream remains, is somewhat tarnished, and is definitely elusive. Consequently, I have significantly shortened my positions with that firm.
For fairness, here is a Link to a Litman Gregory report that defines and defends their methodology:
http://www.litmangregory.com/research-articles/selecting-fund-managers.aspx
The Litman Gregory family of funds concept is not unique to them. The proper selection of an individual active fund manager can be easily morphed into a construction of a Fund of Funds strategy with the assembly of a group of actively managed funds. That’s precisely our goal in the actively managed sleeves of our private portfolios.
The Fund of Funds strategy has been under development since just after World War II. The Fund of Funds management has established a checkered history. Performance data is certainly available and is obviously better than anecdotal evidence.
Here is a Link to a performance summary of a Barclay Fund of Funds Index:
http://www.barclayhedge.com/research/indices/ghs/Fund_of_Funds_Index.html
Be careful when accessing and interpreting these data. One potential pitfall is that many Fund of Funds proffer a mixed portfolio with substantial fixed income positions. So any legitimate comparative benchmark must be judiciously selected to match the fund’s asset allocation. When compared to a pure S&P 500 equity position, on average, the Fund of Funds excess rewards are simply not present in most instances.
Barclay also has a nice report that discusses the characteristics that they seek in choosing an active manager and fund firm. Here is the Link to their 2012 report:
https://www.barclayswealth.com/Images/Barclays_The_Science_and_Art_of_Manager_Selection_March_2012.pdf
The first one-third of the Barclay report documents the failures of most successful fund managers to deliver superior persistent performance over 3 and 5 year subsequent timeframes. The Barclay data reviews show probability distributions that resemble random rolls-of-the-dice statistics, with little demonstrated persistency skills. FAME is a fleeting commodity. But a few rare managers have the necessary skill set and the last two-thirds of the Barclay paper outlines their procedures to identify this exceptional talent.
Superior Fund of Funds do exist. The Vanguard Star fund (VGSTX), which assembles a bunch of its funds in a balanced fund mix, serves as a prime illustration. Over the long haul, this fine mix of Vanguard products has persistently done an excellent job at nearly duplicating and sometimes exceeding the returns of a pure equity holding. Like all Vanguard products, its one consistent advantage is its low cost. It does not pile extra fund management charges onto the portfolio as is often the case with Fund of Funds.
How do you go about the process of choosing a manager who guides an actively managed mutual fund to positive Alpha? What attributes do you include as part of your screening process? Here is my incomplete list.
Low costs seems to be a pervasive perennial factor. To avoid the trap that a manager is not a closet indexer, a high active share portfolio fraction is mandatory. Historical data supports the proposition that a small mutual fund is more agile and enhances the odds. Management with major skin in the game seems like a solid incentive to primarily work for the customer and not for the fund’s shareholders.
Additionally, low volatility relative to an appropriate benchmark increases geometric annual returns, adds to cumulative returns, and operates to mitigate the loss fear factor. Also, low Beta compared to a benchmark also reduces downside risk. Low maximum downside losses contrasted against some standard means that recovery demands are lessened.
Focused funds (with perhaps fewer than 50 holdings) should increase the likelihood of excess returns, albeit with an equal likelihood of underperforming with respect to an Index measure. Portfolio turnover rate is yet another factor since excessive trading frequency signals unstable investment decision making.
Another useful measurement would be the specific trading record of the manager. This statistic requires much more work to collect. It would be generated by comparing the performance of discarded stocks against replacement stock performance. It addresses the question if the individual trades increase or decrease rewards from a timing perspective.
Perspective and context are always important. There’s the old story of a man who moved from Boston to San Francisco. When asked about the relocation he replied that it was okay except that he was now too far from the ocean. Indeed it all depends on perspective.
How do you select a solid active fund manager? Please add to my incomplete list. We can all have fun with this topic.
I welcome all addition or subtraction recommendations.
Best Regards.

The idea of the 60 stock / 40 bond portfolio seems to be very dated (although, I still believe this is a good mix for most people). Critics of this idea tend to focus on the following themes: 1) A stock and bond portfolio is not very diversified. It should include commodities and real estate as well. 2) Asset mix should be customized to the individual's financial needs. For example, a retiree should have more bonds than stocks. And as the average lifespan increases, the typical holdings of stocks should be higher than 60%. 3) Bonds are just overpriced right now. Why would you want to own an overpriced asset.
Today's article in Learn Bonds's is http://www.learnbonds.com/how-expensive-are-bonds-relative-to-stocks-now/

Most of the 2008 relative failure occurred in the first three weeks of the fund's existence. Here's Mr. Smead's discussion of that period:

Our first year of managing the Smead Value Fund could not have been more difficult. The fund began trading on Jan. 2nd with an over-weighted position in financials and by three weeks into the year had fallen behind the S&P 500 Index significantly. For the year ended Nov. 30 the fund fell -43.72%, versus a decline in the S&P 500 Index of -36.76%, as we made up some of the relative performance ground from April through May by not losing as fast as the index.
Most of our poorest performers were financial companies which we got out of on the way down like Washington Mutual, AIG and Wachovia Bank.

Absent those first three weeks, the fund dropped around 37% through the rest of the year and the S&P dropped around 35%. The fund also trailed the S&P for four consecutive quarters from 2Q2010 - 1Q2011. Here's his take on, and reaction to, those markets:

At the end of November, 2010 we explained that there were two big risks in the US stock market. We were concerned about how an improving economy might ultimately hurt bond investments and felt that this would be the year that China’s economy would slow dramatically. Therefore, we have rescreened our portfolio to eliminate our exposure to China’s slowdown. We have removed any energy and industrial holdings to help mitigate these risks.
We want to make all the money for you in common stocks that we can while trying to shield you as much as possible from what we perceive are the biggest risks going forward. We have been faithful to that call and fully expect that approach should help us to outperform in the long term. Most folks don’t realize that all the gains in the stock market since the 2009 lows have come while both institutional and individual investors have been net sellers of Large-Cap US stocks.
Performance for the Investor Class shares of the Smead Value Fund for the six month period ended May 31, 2011 was +11.15%. We underperformed our benchmark, the Russell 1000 Value Index, which returned +16.67%. Our best performing stocks in the last six months have been Accenture, Pfizer and Walgreens. Our pharmaceutical stocks have shown relative strength in the last 90 days, but our financial stocks have weakened as some additional worries about getting past the last big slug of foreclosures in the US housing market has attracted great fanfare and attention. We feel the pessimism is overdone. Both financial and consumer discretionary stocks offer significant upside potential.
The Positive Case Which Nobody Makes
We have a much brighter vision of the next 5 to 10 years than do most other money managers. The US has done a great job of adjusting to the deep recession of 2008-09 by recapitalizing its banking system, and US households have quickly crawled back inside their incomes and worked toward cleaning up their balance sheets. Our savings rate has risen to 6% in the US. The massive cleansing of our economy could soon put us in a position similar to 1982 and 1992 where dour news precluded people from seeing upcoming extended periods of prosperity.

The fund has outperformed the S&P in each of the past nine quarters, starting in April 2011 and including the two quarters with negative market returns. It's performance against its large blend peer group has been stronger than its performance against the unmanaged benchmark. It has outperformed them (and the S&P) since inception and in four of its six calendar years (including 2013 YTD).
For what it's worth,
David

Am always a bit bemused when "record" inflows or outflows make headlines. That's probably because most reporting makes little or no attempt to analyze causes or significance. They might as well be reporting wave heights at some off-shore sea buoy.
1) As Scott noted - flows are a good barometer of public sentiment. If the flows reflect greater confidence through increased risk-taking, they should be positive for the economy. Conversely, higher flows into bond funds and other defensive instruments may bode ill both for public sentiment and the economy. (However, not all bond funds are created equal. If you go back and chart the types of bond funds that have been popular since the recent financial crisis, you'll see that the heightened public interest began in the highest credit quality sectors and gradually transitioned into riskier and riskier types of bond funds as the economy progressed and sentiment improved.)
2) Flow data is probably quite useful (and profitable) for momentum investors - for obvious reasons.
3) Heavy flows out of a particular fund can harm the fund by hamstringing management's ability to take advantage of new investment opportunities and sometimes forcing them to sell into a declining market to meet redemptions - further exacerbating losses for the remaining (diluted) pool of shareholders. I doubt heavy outflows would ever be viewed favoably by management or investors. And yes - I have taken this aspect of outflows into consideration when selling funds in the past.

Reply to @Kaspa: Peer-to-peer lending has taken off rather significantly in other countries (Jacob Rothschild invested in peer-to-peer lender Zopa;
“We are witnessing the growth of the non-banking lending market,” Lord Rothschild told the Financial Times. “Following the 2008 crisis many of the banks remain under capitalised,” he said. “In these circumstances alternative forms of credit will be developed on a significant scale. This is happening.” http://www.ft.com/cms/s/0/2ffbe17e-405f-11e2-8f90-00144feabdc0.html#axzz2XvHAAxeD)
I haven't looked into what is available in the US, but plan on doing so at some point down the road. It would seem to me that regulations are likely keeping expansion in this industry slow at best - peer-to-peer in this country is more Kiva and Kickstarter; there are few services (at most) where you earn interest. It will be interesting to watch how this expands over time.

I'm having a hard time figuring out exactly what funds on the F-squared site you are talking about. Are you talking about the Virtus funds or are you pointing out the financial companies investment philosophy? I looked at the VADIX fund and I guess I don't see anything in that one that draws me in. Looks like a fund of funds with poor upside downside metrics versus the s&p, higher standard deviation to funds like FPACX and PAUIX and poorer returns. Which fund(s) are you talking about? What am I missing?

By Richard Gao:
Weekly Asia Update
June 28, 2013
Growing Pains: In China, a cash crunch forces the pace of financial reforms for the long run.
Short-Term Pain, Long-Term Gain
China’s economy has seen plenty of headwinds recently—weak exports numbers, slower growth in both services and manufacturing and a weak recovery of corporate earnings despite rapid credit growth. China’s equity markets have performed weakly too and have been extremely volatile. But much of the recent volatility has less to do with sagging growth and much more to do with a cash crunch and tight liquidity in China’s banking system. What is going on?
These developments are taking place amid major reform efforts in China's capital markets. There is now stronger demand for wealth management and savings and trust products in China. As a result, the actions of central government authorities should be seen not merely as a response to an uptick in credit growth but as steps toward reshaping its entire financial system, liberalizing its currency and creating international financial markets, centered around Shanghai.
China's cash crunch, which began in mid-June, came just before its three-day Dragonboat holiday. (Public holidays are typically times of high demand for cash.) At the same time, banks were scheduled for regulatory review and as such, typically require cash to close their quarter-end books. The Shanghai Interbank Offered Rate (SHIBOR) started to rise due to these high interbank borrowing demands. This has happened in the past toward quarter-end and, typically, the central bank has stepped in to help ease banking system liquidity and thus lower the SHIBOR rate. However, what surprised the market this time was that China’s central bank held back from pumping cash into the market. Instead, it allowed the SHIBOR to soar, at one point reaching as high as 13%. Expectations that the interbank interest rate hike might lead to widespread default among the system’s weaker banks—and spark a banking crisis—led to severe selling activity in the equity markets of China and Hong Kong.
Some analysts claimed that this was a crisis “self-created” by the central bank. True, the Chinese central bank can very easily defuse the crisis by injecting liquidity into the system. But the fact that the central bank did not intervene also sent a strong signal to the banks: They need to source their own liquidity and shed the assumption, particularly held by the country's smaller banks, that interbank interest rates will remain constantly low and liquidity typically abundant. China's banks should also not rely too heavily on low-cost interbank borrowing as their funding source to issue a variety of wealth management products. Banks need to own up to the consequences of a liquidity squeeze and not expect an automatic government bailout. In recent years, the amount and types of wealth management products issued by banks have grown quickly and become central to China’s risky shadow banking system. Wealth management products bear much higher interest rates and are not reflected in bank balance sheets.
So far this year, although China’s overall credit growth has been quite strong, it has not translated into higher economic growth. A big part of credit creation has taken the form of wealth management products, some of which have involved the country's somewhat unhealthy real estate market as well as local government-funded projects. This has posed significant risk to the financial system. Given the fast development and lack of transparency in China's shadow banking system, inappropriately managed wealth management products could significantly deteriorate a bank's asset quality and, ultimately, lead to further needs to recapitalize. China's banking sector liquidity crunch seems likely to have a significant impact on the behavior of financial institutions and could eventually slow the pace of growth in its shadow banking activity. At Matthews, we have tracked the evolution of China's banking sector cautiously. We believe that a widespread banking crisis seems unlikely for China, but we have nonetheless taken a cautious approach and typically are underweight in Chinese financials, especially banks, in our portfolios.
If the interbank interest rate remains high for an extended period, it could ultimately lead to higher financing costs for businesses, harming the growth of China’s already slowing economy. By leaving the SHIBOR rate high, the central bank is taking a risk. But this move also demonstrates its determination to reform its financial system and place it on a more sustainable long-term footing. One would assume that the central bank is aware of the risk in taking these steps and will ensure that it won’t go too far. At the time of this writing, the central bank has announced that it has provided some liquidity to support financial institutions “in prudent need.” As a result, the SHIBOR rate has lowered substantially. The relatively tight liquidity may still exist for some time, but it seems that its peak may be behind us.
Richard Gao
Portfolio Manager
Matthews Asia

Hello, Hrux.
Thanks for the info. You can't stand a lotta volatility. Understood. In your 40s, both working. Children. YOUNG children. They are a blessing, but they are a financial black hole. Don't worry, it's worth it in the end in ways that can't be counted in dollars.
Maximize tax deductions. 401k, 403b, IRA. But you knew that.
Stay mostly in equities, given your age. Others will advise you to hold less international, but I'd go with 50/50 domestic EQUITY and foreign EQUITY.
BONDS: I'd be holding no more than 30% bonds now. You need growth now, not income.
Not too hard to hold a portfolio that is not volatile. If it helps you to sleep, just don't look at it every day. And don't be so diversified that you end-up diluting your earnings. There will be downdrafts, like in the very recent past. That's always going to be part of the game.
Specific suggestions:
DOMESTIC EQUITY................... PRBLX (Large Value) MSCFX (small-cap)
Emerg. Mkt./International..............TBGVX MAPIX and/or MACSX SFGIX
DOMESTIC bonds: DODIX
Overseas bonds: MAINX, FNMIX and/or PREMX
OK. Break that other leg, now. We'll see which other recommendations you get......The folks in here know what they're talking about. If you would spend a bit of time getting familiar with some of the investing nomenclature and concepts, you could construct a portfolio and run it on your own, with little effort.
*Stick with NO-LOAD funds!

http://www.financialsense.com/financial-sense-newshour/2013/06/22/john-betz/healthy-correction
emergency fund and safe investment
http://www.pbs.org/newshour/businessdesk/2013/06/why-you-need-an-emergency-fund-and-wheres-the-safest-place-to-invest-it.html
should investors fear the market pull back?
http://money.usnews.com/money/personal-finance/mutual-funds/articles/2013/06/26/should-investors-fear-the-market-pullback-2-views-on-stocks
you are paying too much to invest
http://etfdailynews.com/2013/06/26/mutual-funds-youre-paying-way-too-much-to-invest/

Reply to @JoeNoEskimo: China isn't a non-issue I think but I think it's a matter of those who have a long-term view on China and Asia in general have to continue to have a long-term view. I don't think there aren't definite issues in China and that there will be more instances of officials trying to calm markets and then finding something else is the case. On the flip side, you have CNBC acting like people should not go anywhere near emerging markets. If you believe that China will successfully transition to more of a consumption economy (and that even in the best case scenario is going to be bumpy), then you have to look at something like ECON.
Like everything else these days in financial media, "CHINA IS OVER! SELL EVERYTHING IN CHINA! GET OUT OF EMERGING MARKETS!" Dividend plays good! Dividend plays bad! I haven't watched CNBC in a year or so before watching it again consistently more recently and it seems like this (telling viewers to not go to anything aside from what is working this very second) has gotten much worse.
Everything is so black/white. I'll continue to add to things like FEO and other EM plays.

Hi Guys,
The markets have made a few wild swings this past week. That volatility, mostly on the downside,has put investors on notice and their fear index is on the ascent. Is the market action a transient perturbation or is it a signal of a major directional shift? Who knows?
Is it the Madness of crowds or the Wisdom of crowds? Many will seek an answer from experts, but how reliable are these experts?
In all likelihood, it depends. It depends on how the expert crowd is constituted. To avoid the madness of crowds trap, the crowd members must be independent, must represent diverse backgrounds, and must not succumb to the groupthink of a dominant member.
Within the month of June, Paul Farrell has written two separate pieces that present both sides of the equity market opinion spectrum. It is a clash of Titans.
Most recently, a segment of the Lazy-Man portfolio managers that Farrell assembled has proffered an optimistic assessment. From their perspective the equity marketplace is still the place to be.
They totally disagree with Paul Farrell and his earlier group opinion with respect to market returns for the remainder of the year. Here is a Link where Farrell forthrightly records the positive projections formed by four members of his Lazy-Man cohort:
http://www.marketwatch.com/story/lazy-portfolio-creators-remain-stock-bulls-2013-06-22
For fairness and balance, here is the doom and gloom earlier article that prompted this contrary assessment:
http://www.marketwatch.com/story/doomsday-poll-87-risk-of-stock-crash-by-year-end-2013-06-05
This doomsday poll included 10 well respected investment and financial wizards ranging from Warren Buffett and Gary Shilling to perennial pessimistic critics such as Nourial Roubini and Peter Schiff. The four Lazy-Man portfolio mangers take exception.
To illustrate, a ubiquitous concern shared by many wizards is the escalating climb of debt within the US. They often cite the public debt rise, but often ignore the more troubling private debt which is three times the total of the public sector. Now that’s a real long-term issue. Many market mavens have blamed the failure to mark to market as the primary cause of the housing bubble and its derivatives explosion Later commentary humorously morphed the “to Markets” sobriquet “to Myth”, then “to Model”, and finally “to Make-Up”. The impact of private debt is likely to persist and to influence longer-term recovery. That’s me talking and injecting a random opinion.
This diverse set of expert opinions is not unexpected. It is rare if experts totally concur on any forecasting matter. If it were an easy forecast, expert advice would need not even be solicited. And all experts are not equally skilled, consistent, or trustworthy. Incentives corrupt the honesty of many experts. Who would you trust more, Jim Cramer or David Swenson?
In several recent postings, I’ve focused on the failures of forecasters to forecast. Experts have cobbled together a dismal record. Both reference articles should be absorbed with considerable skepticism. A book written by David H. Freedman titled “Wrong” explores the challenges and shortfalls of expert studies and forecasting. Here is a Link to a WSJ review of that work:
http://online.wsj.com/article/SB10001424052748704009804575309610811148630.html
I enjoyed the book. Even scientists distort or misreport their findings. Like other professions, a fraction of them are also dishonest and do mischief, sometimes by completely fabricating the data, but more often by stacking the scoring deck. Here is an infamous story presented in Freedman’s book about a college professor who rigged his experimental scoring to validate his theory and practical solution.
The professor claimed to have a procedure to cure the fear of snakes. His final test to validate his “cure” was to expose the client to snakes to demonstrate the efficacy of his work. The scam was that he exposed his clinical subjects to snakes that had been well fed and kept in a refrigerator to make them sluggish and subdued. His test control group members who were not treated were similarly confronted by snakes. However, these snakes had not been fed, and were kept in a heated environment to make them significantly more aggressive. The resultant end statistics of the efficiency of his treatment are obvious, and obviously wrong. The professor’s goal was simply to secure continual funding for his truly ineffective methods. Sad, but true.
Freedman’s final chapter presents a prescription on how to spot a fraudulent expert forecast. To illustrate a few of his alerts, be especially skeptical “if its to simplistic, universal, or definitive”. The author observes that the advice is likely more trustworthy if “its heavy on qualifying statements” and if “its candid about refutational evidence”.
From Freedman’s research, a hierarchy of experts and specialists can be loosely identified. For investors, industry experts and pundits must be near the bottom of that hierarchy because of perverse financial incentives. Academics and scientists are more properly placed near the top of the pyramid, but they surely also are flawed. So, as usual, buyer beware.
I’ll conclude this post with two brief quotes that I extracted from Freedman’s work. From H.L. Mencken: “There is always a well-known solution to every human problem-neat, plausible, and wrong.” Finally, from Lord Salisbury: “No lesson seems to be so deeply inculcated by the experience of life as that you never should trust experts”. Indeed, seek, but challenge expert wisdom.
You get to assemble, integrate, weigh, and interpret the wide array of expert judgments to suit your specific preferences and goals. Good luck.
Best Regards.

10:56 AM Stampede indeed: $61B exited fixed-income investments (AGG, BND) in June, estimates TrimTabs, storming past the previous record of $41B at the height of the financial crisis in October 2008. Pimco's giant Total Return Fund (the ETF version isBOND) is seeing outflows as it puts in one of its worst performances ever. The last time the fund saw money leaving was late 2011, just ahead of 2012's plunge in yields. Comment!
__________________________
CNBC discussing Trimtabs note in greater detail, saying the outflow was very heavily retail.

Reply to @Charles: Yeah, I saw that this AM. His biography ("King of Oil") is a wildly interesting read. It's wildly volatile and hasn't done well like other similar stocks (BHP, etc), but I am buying more Glencore (or now Glencore Xstrata, "Glenstrata") here, trading below book.
I'll highly recommend this article from 2005 Businessweek, "The Rich Boys", which is essentially more or less a summary: http://www.businessweek.com/stories/2005-07-17/the-rich-boys
From the article: "Rich still keeps offices in Zug. "It's eerie," says a financial executive who recently paid a call. "You go up in an elevator and step into a vestibule where you're asked over an intercom if you have an appointment and whom you're there to see. If you're on the list, a security guard opens a door to another room. There you see a receptionist who scrutinizes you. Then you're escorted into another elevator that takes you to a different floor."

ACTIVELY MANAGED FUNDS VS. PASSIVE INDEX FUNDS
June 22, 2013
Two seasoned investment pros argue the case for and against actively managed funds versus passive index funds.
In a surprising twist, Vanguard principal Daniel Wallick presents the active management case while award-winning financial advisor Gregg Fisher defends the passive approach.
http://wealthtrack.com/

Reply to @Old_Joe: Always fascinating to track these statements back.
Uwe Parpart is a heavyweight in international finance and formerly of Kantor Fitzgerald, which sued him when he and three colleagues left for ReOrient. (He won). He's also author of "Death of the Asian Growth Model with the 2008 Financial Crisis" (2008), source of the prediction that "at this rate, the euro will lurch toward parity with the US dollar and through it before year-end, then disintegrate" (2010) and that Shanghai stocks would be sold directly to foreign investors by October or November, 2011 (2011).
He's currently a managing director of ReOrient Financial Markets, formerly Asia TeleMedia, Ltd. ReOrient sells investment advice and trading services to the very rich. That includes private placements, which is seen as an alternative to investing in public securities (which are, we're told, "very problematic"). 80% of ReOrient is owned by Gainhigh Holdings Limited, an investment holding company domiciled in the British Virgin Islands. All of Gainhigh Holdings is owned by Ko Chun Shun (called Johnson Ko). Mr. Ko is a serial entrepreneur who runs China Windpower Group, an investment holding company.
Bright guy with a smudgy crystal ball, talking his book?
David

http://www.cnbc.com/id/100814655
is this the best investment opportunity in yrs
http://seekingalpha.com/article/1502142-oversold-yields-is-this-the-best-investment-opportunity-in-years
em bond heading south??
http://uk.reuters.com/article/2013/06/12/uk-emerging-corporate-analysis-idUKBRE95B0UL20130612

Reply to @AndyJ: The change came with the addition of the other co-manager. Today Yockey's fund invested much less in financial sector and ARTIX has improved in the last several years.

Reply to @MaxBialystock: Actually we talked about our children a lot, MIchelle's inability to cook (she mostly warms things up) and Andrew's passion for it (it's a major stress management tool thought he, like me, hates to bake) and the fascinating bacon-wrapped mozzarella that we were eating. There was a freakish fire alarm in the midst of it all - "this is not a drill, remain in your places" quoth the Chicago Fire Department.
We did drift in the direction of the state of the fund industry (bizarrely uninterested in the welfare and interests of its shareholders) and China (what passes for a financial system there would be barely recognizable to anyone here), but quickly regained our senses and talked about you folks.
David

More than one manager is worried about "a credit event" in China this year. That is, the central government might precipitate a crisis in the financial system (a bond default or a bank run) in order to begin cleansing a nearly insolvent banking system. The central government is concerned about disarray in the provinces and a propensity for banks and industries to accept unsecured IOUs. They are acting to pursue gradual institutional reforms (e.g., stricter capital requirements) but might conclude that a sharp correction now would be useful. One manager thought such an event might be 30% likely. Another was closer to "near inevitable."
More than one manager suspects that there might be a commodity price implosion, gold included. A 200 year chart of commodity prices shows four spikes - each followed by a retracement of more than 100% - and a fifth spike that we've been in recently.
More than one manager offered some version of the following statement: "there's hardly a bond out there worth buying. They're essentially all priced for a negative real return."
More than one manager suggested that the term "emerging markets" was essentially a linguistic fiction. About 25% of the emerging markets index (Korea and Taiwan) could be declared "developed markets" (though, on June 11, they were not) while Saudi Arabia could become an emerging market by virtue of a decision to make shares available to non-Middle Eastern investors. "It's not meaningful except to the marketers," quoth one.

http://www.sec.gov/Archives/edgar/data/1494928/000139834413002870/fp0007468_497.htm
497 1 fp0007468_497.htm
RiverPark Funds Trust
RiverPark Short Term High Yield Fund
Supplement dated June 14, 2013 to the Summary Prospectus, Prospectus and Statement of Additional Information (“SAI”) dated January 28, 2013.
This supplement provides new and additional information beyond that contained in the Summary Prospectus, Prospectus and SAI and should be read in conjunction with the Summary Prospectus, Prospectus and SAI.
Effective as of 4pm on June 21, 2013 (the "Closing Date"), Retail and Institutional Class Shares of the RiverPark Short Term High Yield Fund (the "Fund") are closed to new investors.
After the Closing Date, existing shareholders of Retail and Institutional Class Shares of the Fund and certain eligible investors, as set forth below, may purchase additional Retail and Institutional Class Shares of the Fund through existing or new accounts and reinvest dividends and capital gains distributions. Existing shareholders and eligible investors include:
· Shareholders of Retail Class Shares and Institutional Class Shares of the Fund as of the Closing Date (although once a shareholder closes all accounts in the Fund, additional investments into the Fund may not be accepted).
· Clients of a financial adviser or planner who had client assets invested in the Fund as of the Closing Date.
· Any trustee of RiverPark Funds Trust, or employee of RiverPark Advisors, LLC or Cohanzick Management, LLC, or an investor who is an immediate family member of any of these individuals.
The Fund reserves the right, in its sole discretion, to determine the criteria for qualification as an eligible investor and to reject any purchase order. Sales of Retail Class Shares and Institutional Class Shares of the Fund may be further restricted or reopened in the future.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
RPF-SK-011-0100