According to M*, they have $85B AUM in this strategy by the one manager - combining all the funds like RPMGX, PMEGX, etc. I think that is a lot for a mid cap fund to be effective, assuming mid cap is what investors are looking for. For the past three years it has underperformed both its category (47, 75, and 68 percentile) and LG category. As somebody else suggested, they are likely to open all the funds that are being split into a separate firm - the reason for the split being capacity constraint.

What if:
A. Joe begins the 25 year period by putting 50% into an S&P 500 index fund and 50% into GNMA funds
B. After 3 years the S&P index fund has fallen 40% in value. The GNMA funds have retained their initial value.
C. Joe than panics and moves his remaining equity balance into his GNMA funds for the duration of the 25 year term
For simplicity, let’s assume Joe’s GNMA funds’ managers achieve an annual 3.5% return over the 25 year period as the rate on the 10 year gradually increases from under 1% initially to 5% in year 25.
ISTM that that initial loss (near 20% of portfolio) over the first 3 years has done significant damage to Joe’s future earning prospects. (This proposition can be sliced and diced in a number of different ways.)
-
Taking into account the stocks losses in the beginning, I’m showing that w/o the annual withdrawals the sum after 25 years would have grown to approximately $1,787,262 (using 3.5% monthly compounding).
Had Joe avoided stocks altogether and gone 100% into GMNA funds at the onset (3.5% average return) he’d have approximately $2,234,007 at the end of 25 years.
Difference in return: $446,745 - Approximately 25% more without having incurred the initial stock losses
* Neither hypothetical case takes into account Joe’s $40,000 yearly withdrawals, which would alter the numbers somewhat.

M*'s methodology does have a recent (read: three year) performance bias. It averages a fund's three year, five year, and ten year ratings. Since the three year performance is part of the five year and ten year metrics, those recent years get weighted more heavily.
Nothing conceptually different from other metrics like exponentially weighted averages.
For the moment at least, one can read M* analyst reports via Firstrade. For example, here's their page for VTCLX; just click on "Read full Analyst Report" under "Morningstar's Take".
https://www.firstrade.com/content/en-us/researchtools/research?ticker=VTCLX

@Crash - Thanks for the aviation tidbits. You meet all kinds for sure. Once, riding in first class years ago, a couple older gals seated behind me were downing the free alcoholic beverages as fast as they could. Sloshed by the time we landed. Obnoxiously loud. Not a great ride. “Pedestrian class” might have been better that day,
I have no particular gripe re M*. They are what they are. I always consult at least 3 different sources before buying a new fund. I do think M* favors funds that have been hot recently in awarding stars. So there’s a good chance those stars will propel you to buying at the worst possible time while the fund is hot. Suspect that’s true of a lot of rating systems.
FT is $12 monthly on Amazon Kindle. Six issues weekly. It only takes one really good idea, bit of information, insight, suggestion or revelation to make a huge difference in your investment approach and outcome. Ben Franklin: “An investment in knowledge always pays the best dividend.”

TRLGX. TRP. Holds the usual high-flying suspects: Microsoft, Amazon, Alphabet, Facebook, Apple, Visa. PRGFX. TRP. Almost a clone of the other.
Just noticed: HCAIX holds no bonds, as expected. But it's doing just a tiny bit better this year than PRWCX, which does hold bonds and is heavily into utilities. But you can't get in, unless you're already in.
Morningstar puts Mairs & Power Growth MPGFX into its large-blend category. It has slipped behind the Index that Morningstar compares it to. Instituted in 1958. Only two "bad" recent years I can see: 2014 and 2017. Past 15-year performance = 10.74%, in top 13th percentile vs. "peers." Microsoft, Alphabet, Amazon, United Health, US Bancorp, Ecolab...

I like several funds in this category - POLIX, HCAIX, FBGRX, JGQIX. You need to look at the Sector weightings and holdings concentration among other things before investing. Stating the obvious, most of the top performers over the past 5 & 10 years more than likely held the FANG (Facebook, Apple, Netflix, Google)

We've seen this before:

There was once a king in India who was a big chess enthusiast and had the habit of challenging wise visitors to a game of chess. One day a traveling sage was challenged by the king. The sage having played this game all his life all the time with people all over the world gladly accepted the Kings challenge. To motivate his opponent the king offered any reward that the sage could name. The sage modestly asked just for a few grains of rice in the following manner: the king was to put a single grain of rice on the first chess square and double it on every consequent one. The king accepted the sage’s request.

https://purposefocuscommitment.medium.com/the-rice-and-the-chess-board-story-the-power-of-exponential-growth-b1f7bd70aaca
Reduce the number of squares on the chess board from 64 to 25 to represent the 25 years.
Reduce the multiplier from 2x to the inflation rate (e.g. 1.025 for 2.5%)
Instead of starting with 1 grain of rice, start with $40K scrip
Standard mathematical technique for solving problems - transform them to something already solved.
Even if inflation averages 2.5%/year, there's always sequence of "return" risk. You might have all the inflation in year one, in which case you'd need 25 years x $40K per year x (1.025)^25, or all the inflation could be just as Joe reaches the end of his estimated lifetime. Which brings us to longevity risk.

“Stock investors may be feeling a tad jealous of their crypto cousins. Bitcoin, the largest crypto-currency, blew past its record high this past week, reaching new heights around $67,000, up 50% since Sept. 30. Bulls now see a path to $100,000.”
“After years of false starts, a Bitcoin-futures-based ETF, the ProShares Bitcoin Strategy (ticker: BITO), debuted on Tuesday on the New York Stock Exchange. It racked up a record $1.1 billion in assets in two days, but it already has company. Another futures ETF, the Valkyrie Bitcoin Strategy (BTF), launched on the Nasdaq on Friday. Other futures ETFs that could win approval soon include funds from VanEck, AdvisorShares, and ARK 21Shares. The flurry of futures ETFs may be a turning point.”
Barron’s October 25, 2021

Your post helps tremendously in understanding what you're thinking about. Much appreciated.
My head is full of loosely connected thoughts that would take too long to organize coherently now, so I'll just toss out a few for the moment.
I like BLS's idea of separating out expenses from investments. Just as we don't include stock prices in inflation, OER is designed to exclude the cost of a home as an appreciating asset. At the same time, it attempts to count the costs (including operating costs) of the shelter aspect of one's home. While we can debate how well it accomplishes this, it is a reasonable approach.
Side note: my property taxes are based not on the selling price of comps, but on the theoretical value of my home as rental property. Take market rental rates, and use current interest rates to work backward to compute the "correct" assessment, regardless of what my home would currently fetch. This has got its own set of problems, but serves to show that using OER is not limited to CPI calculations.
Side note: the fact that homes can be viewed as a potentially appreciating asset is something that differentiates homes from vehicles. Except for antique vehicles, which BLS explicitly excludes from the CPI. They're viewed as pure investments, not transportation.
Similar to homes, education has attributes of daily expenses and attributes of an investment. (Perhaps I've been listening too much to Build Back Better's expression of education as an investment in human "capital.") Thinking about this it seems that the two categories of expenses could be treated similarly.
Amortizing the expenses over several years, as a homeowner does with monthly PITI payments could be a reasonable way to incorporate home prices directly and smooth some of the price volatility. Just as students wind up carrying college debt for many years.
Not only do different people experience inflation differently, but inflation on the national level can be different from the way individuals experience inflation. For example, last year the cost (premium) of Medicare insurance went up $3.90, but it should have gone up roughly four times that to cover projected expenses.
From a national perspective medical costs rose by some given amount; it didn't matter who was paying the increase. However, as a result of the subsidy, individuals experienced a lower rate of inflation in 2021. Of course now that this subsidy has expired, Medicare recipients feel like there's a higher rate of inflation. This, despite medical costs having stabilized from a national perspective.
Regarding Forsyth, I haven't really read him. But I did read the cited Carson blog that has much of the same flavor. I tend to tune out things like that because people are good at complaining about perceived wrongs, but tend to be silent when the same measures work out in their favor.
For example, the Senior Citizens League is very good at banging the drum for using CPI-E as opposed to CPI-W for COLAs. But we haven't heard a peep from them this year, not since CPI-W came out a percent higher than CPI-E. What will Fosyth say the next time housing prices fall?

I keep getting money building up in my bank account.

That’s quite common. The experts say we’re still flush with cash. A lot of spending was curtailed during the worst of Covid. Folks travelled little. And with less travel - plus working from home - new wardrobes weren’t necessary. Fuel was cheap.(Crude went below 0). People drove much less. I put off some interior maintenance for almost a year - not wanting workers in the house before being vaccinated.
That cash is beginning to flood back into the economy. I’d like to say I invested mine like @Anna did - but, instead, it went into some important home upgrades this summer (an investment of sorts I guess). While the costs were high, I suspect they were much lower than they will be in 3, 5 or 10 years time.

It’s a real quandary today. No advice. Cash allows you breathing room to see what develops.
For my really “safe” money I’ve moved to GNMA funds. Expect to lose a bit, but it’s a comfort having a degree of federal backing for GNMA paper. A good manager might be able to grab off an extra percent or two above cash or TIPs over longer periods. (Both of mine are 1-2% underwater YTD.) Checking duration at Yahoo (under “holdings”) one fund is less than 3 years out and the other between 4 and 5 years. I wouldn’t go over 5 years on duration.
Balanced funds in general? I’ve stuck with mine. Worst case: managers will go very short term with the bond portion - costing some return potential, but also mitigating the fund’s volatility - a big reason for owning balanced funds.
The only muni I have is PRIHX. Price calls it “intermediate”, but it behaves more like a short-term bond fund. That might be why it doesn’t score well at M* and the rest. FYI - a bet on munis - especially longer term - is a bet on the economy. Under recessionary pressures, including high unemployment, state and local (tax) revenue declines while expenses may actually increase due to unemployment benefits. This can lead to downgrades of the bonds they’ve issued.

Since 10 year rules, inherited accounts and 401(k)s have been mentioned, I'll throw in another technical detail:
A lump sum distribution from an employer sponsored plan inherited from a participant born before 1936 can apply 10 year income averaging. In effect, one gets the money up front but is taxed as though one drew it out over ten years.
https://www.irahelp.com/slottreport/what-you-need-know-about-special-10-year-income-averaging
I actually have run into this situation. Though I wasn't the beneficiary.

@msf said,
"- Inherited Roth IRAs have RMDs."
There is no Require Minimum Distribution for Inheirted IRAs, but instead, a Required Full Withdrawal following the 5 or 10 year rule. One could wait 10 years before making that one full required withdrawal providing an additional 10 years of tax free growth from the date of inheritance.
This article does a good job of explaining Inherited (Roth) IRAs:
https://fool.com/retirement/plans/inherited-iras/
1. A spouse (as a beneficiary) can rollover an Inherited Roth IRA (from a deceased spouse) and continue to enjoy no RMDs.
2. Withdraw the funds as a lump sum. You may withdraw all of the money from the original owner's IRA as a single lump sum. Doing so gives you a lot of money now, but also results in a high tax bill for the current year, unless you're withdrawing the funds from a Roth IRA that the original owner held for at least five years. In that case, you won’t owe any taxes on these withdrawals. However, if the owner didn’t have the account for at least five years, then you could owe income taxes on the Roth IRA earnings.
3. Use the five- or 10-year withdrawal method. The five- or 10-year withdrawal method enables you to withdraw money as often as you'd like and in whatever increments you choose, as long as the money is completely withdrawn within five or 10 years. If you fail to withdraw all the funds in time, then you'll pay a 50% penalty on whatever remains in the account.
You have five years to withdraw all the money from an inherited IRA if the account owner died in 2019 or earlier, and 10 years if they died in 2020 or later.
For all of us, this can be very confusing. If you have a specific scenario (question). I would suggest reader's ask their questions on the Ed Slott (Discussion Forum). It is a great IRA resource.
https://irahelp.com/phpBB

Howdy folks,
The government statistics on inflation are rubbish and have been since they started 'adjusting' them in the 80s. Too many COLAs and other ties to the CPI. feh. It's called screwing the public and hiding the facts about the dollar.
@Hank you mentioned that housing was eliminated in the early 1980s. Other things also. Here is Shadow Stats showing CPI like they calculated it in the 80s' and later the 90's. Ever hear of Hedonic adjustments? That's when a product is 'new and improved' they can charge more and the increase is no included. That's fine if you can still buy the old and unimproved item. Right.
Notice that he has the earlier version of inflation running about 12-13%
http://www.shadowstats.com/alternate_data/inflation-charts
They're still dealing with the Unfunded Liabilities overhang that we've talked about for years now. What some $100 T. Their choices were to break as many promises as politically possible and deflate the currency by about 50%. Please note that it's down 96% since '13 so it only has to go to 2%. Easy. And let's not talk about the strong US dollar. Er, it's the cleanest pair of dirty socks in the hamper.
and so it goes,
peace and wear the damn mask,
rono

My initial objection was to the assertion as to the reasons for the removal of home prices, nothing more.

You not only objected but offered an alternative explanation regarding the CPI-U calculation. My comments pertained to that alternative explanation, nothing more.
Accepting that explanation, then rather than reintegrate housing prices into the CPI-U as Carson did, we should remove vehicles from the CPI-U. Thus the 2021/2020 (Y/Y) CPI-U increase is actually significantly lower than reported.
That's not being contradictory. That's working with your thesis and exploring its implications. I didn't say whether vehicles should be excluded from the CPI-U. I did ask whether you agreed with where your thesis led - that vehicle price increases should not be counted in calculating the CPI-U.
Maybe, despite the statistics, your gut tells you that on some continuum car purchases resemble day-to-day expenses more closely than do home acquisitions which are "rare years-apart purchases." Perhaps looking at different inflation component will help clarify what you have in mind with this continuum.
College educations, rather than being rare year-apart, are often one time purchases. On average, people tend to attend college once in a lifetime. Many never attend college. Some may attend even multiple times without attaining a degree. Others may make multiple "purchases", i.e. earn multiple degrees.
Regardless of the precise average number of college education purchases per lifetime, the purchasing of college educations would seem to share many attributes with home purchases - infrequent, not a day-to-day type of expense, something one budgets for years in advance, something that is paid for over a period of years, something that is "consumed" over multiple years.
Help us understand whether the reason you gave for excluding home prices from the CPI-U also excludes the cost of college educations.

IMO M* stopped being relevant to me years ago. Their move into managing money shifted how their 'analysts' covered stocks and as a result their insights and newsletters (which were ususally good) really began to lose value to me since they became less opinion and more quant-based ... it felt almost as if they used regulatory COI language to avoid directly speaking about things and/or 'making a case' like they used to.

@crash - it's not for everyone but
IOFIX - 1yr.: +18.29% although after last year there really wasn't much place to go but up.
YTD: +13.7%
Yield: 3.98%

IOFIX generated excellent category returns from inception (05/28/2015) through 2019.
IIRC correctly, volatility was low and the Sharpe ratio was high during this period.
The fund then delivered an unpleasant surprise when it returned -36.18% during Q1 2020.
IOFIX seemed like a safe fund for years...

Two petty technical points:
- You're supposed to calculate the RMD for each IRA and then add them together. Usually that comes out the same as adding the values together and then dividing, since:
$A / N years + $B / N years = $(A+B) / N years.
But in rare cases you could have a different N for two IRAs.
If on one IRA the sole beneficiary is your spouse, who is more than 10 years your junior, you use Table II (Joint Life and Last Survivor Expectancy) for the divisor. If the situation is different on another IRA (e.g. beneficiary is sibling), then you use the customary Table III (Uniform Lifetime) to find the divisor.
- Inherited Roth IRAs have RMDs.

Why should rare years-apart purchases be included in widely impacting run-of-the-mill inflation calcs? ...

Do you disagree with the BLS for including the prices of new and used motor vehicles in its CPI calculations?

It's a continuum, arguable, debated, ...

The only antecedent for "it" I can see is periodicity of purchases, so I'll infer that this continuum is the length of time between purchases.
Until the past decade or so, average time of home ownership was about four years. For example:

Source page: https://ipropertymanagement.com/research/average-length-of-homeownership
New car ownership in 2017 was almost seven years, or just a shade less than home ownership since the GFC.
https://www.cnbc.com/2017/05/28/car-owners-are-holding-their-vehicles-for-longer-which-is-both-good-and-bad.html
Is this minuscule difference in holding periods really what you want to pin your continuum premise on?
I'm sure you're aware that when housing costs (including investment attributes) had been used in calculating the CPI, those costs included mortgage interest, property taxes, insurance, and maintenance expenses. That's in the paper I cited.
Paraphrasing your original question, why should frequent, periodic cash outflows (interest, taxes, insurance, and maintenance costs) be excluded from widely impacting run-of-the-mill inflation calcs? Even if those costs fluctuate wildly from month to month as construction (maintenance) costs have done this year.

Some potentially worrisome thoughts …
- Could Zukerberg someday control the universe through this augmented reality?
- Would an augmented reality “Big Mac” taste as good as the real thing? (If it could be made 0 calorie I might buy one.)
Also - Elon Musk, arguably one of the smartest visionaries alive, has been warning about the dangers of AI for several years now.
2018 Article