He wrote that if the investors bought a fund via ETF shares, they underperformed by around 1.6% over the period examined. But investors who bought the same fund via open end shares slightly outperformed the fund.

@msf, Agree. Underperforming by 1.6% is sizable. Long holding period, i.e. 10 years or so may reduce the difference. By the same token, what is the point of ETFs other than ease of trading?

I've gotten more and more down on bonds over the past decade, as bond yields have gone down more and more. A year ago, I would have suggesting sticking with banks/CUs alone and forgetting about bonds. Yields have come up a bit, IMHO enough to make it worth considering bonds again.
You might take a look at FPNIX. The managers of this fund (first Rodriguez, now Atteberry) use somewhat esoteric devices (e.g. credit enhanced ABSs for credit risk protection, Interest Only (IO) bonds to reduce duration) to reduce, not increase, risk. This fund has not lost money at in any calendar year going back at least to 1992.
Its current SEC yield (as of 12/31/17) is 2.84%, and current yield to worst (i.e. assuming every bond in the portfolio actually yields the worst possible amount) is 2.95%. Its duration is just 1.5 years, and it's investment grade (M* puts it at BBB, almost 90% are A or better).
FPINX fact sheet: http://www.fpafunds.com/docs/fund-fact-sheets/fpa-new-income-factsheet-2017-12.pdf
If you like CDs, and are a veteran or a relative of a veteran, you might look at Navy Fed - it's offering a 15 month CD paying 2.25%. It offers the flexibility of adding money, but only up to $50K.
https://www.navyfederal.org/products-services/checking-savings/certificates.php

I see your distinction @JoJo26, but I don't see the article missing the point or that he is full of crap. The author does make the comment,

...take advantage of current economic and market conditions to produce outsized returns.

. I guess that could be interpreted as being short term tilt, but on the other hand it could also mean conditions are for small caps to do better going forward, or value is preferred over growth in this part of the economic cycle. Those kind of trends can last many years through an economic cycle. I guess it's what you read into his words.
I think the bigger point of the article was to have part of your portfolio in a buy and hold diversified format that has shown to grow over time, but also use economic and investing knowledge to over weight investments that fit the economy more efficiently to add alpha (or is it beta, I get it confused). The risk of course is your beta move could be wrong and essentially hinder your returns.
Anyway. I see your point but agree with Ted.

FYI: As investors sift through the rubble from last week’s equity rout, a blemish has appeared on what had been one of the hottest trades among quantitative investors -- low volatility.
The approach ostensibly offered protection from equity gyrations by betting on stocks that have historically swung less than the overall market. But when the S&P 500 Index registered its worst week in two years, exchange-traded funds geared to low volatility sold off nearly as forcefully.
Regards,
Ted
https://www.bloomberg.com/news/articles/2018-02-14/favored-quant-trade-blemished-in-last-bout-of-market-volatility?srnd=etfcenter

Seems to me the likely candidates (bank loan funds and inflation adjusted bonds) have already been bid up (Just an educated guess). And junk of course is expensive. I know @Junkster had something to say on the bank loan floating rate sector a while back. Don’t think he was too hot on the sector.
Like many things in life, there’s no easy answer to the dilemma of rising rates and need for income. Really a pick-your-poison situation. But others on the board more informed than me have suggested some good PIMCO and DoubleLine funds that cut across fixed-income asset classes. Sounds reasonable to me. Both companies have some good offerings. I’ve gained a lot of respect for Gundlach even though I don’t own his funds.
As I’m mainly at T. Rowe and D&C I use RPSIX and DODIX. The latter has been positioned very short for several years anticipating a rate rise. Savvy investors. But this fund still could easily fall 2 or 3 percent in a year or even more if rates really heat up. My small venture recently into a gnma fund is probably crazy. What I see here is govt. backed paper in case of an equity collapse and rates a point or more over what an intermediate treasury fund will earn. Also (self excluded) I’d think the gnma investor is a more stable lot - meaning less hot money to flee (and further damage the fund) during a steep pullback than with a treasury fund.

Sorta sounds like what I’ve gravitated to over the years. Except I don’t use index funds. Core = a diversified balanced portfolio (about a dozen funds) that rarely gets traded. Pretty much a sleep-well mix. Flexible portion = cash / cash-like holdings plus riskier investments. The Flex part I can vary at will.
As I’ve aged, I’ve slowly increased the Core portion from around 50% two decades ago to 75% today. By the time I’m too old to remember who I am, I hope to have moved to 100% Core. Than I’ll keep my hands off everything and just let it ride.
Not a recommendation for others. Not going to beat the market either. A good sleep well approach that keeps ya from mucking things up too badly.

FYI: U.S. insurer MetLife Inc on Tuesday said internal failures that resulted in its not making payments to thousands of pensioners stretched back a quarter of a century and it would take a major effort this year to fix the problems.
Regards,
Ted
https://www.fa-mag.com/news/metlife-says-pension-failures-go-back-25-years-37158.html?print
Its All Because They Dumped Snoopy And The Peanuts Gang:
http://money.cnn.com/2016/10/20/investing/metlife-snoopy-peanuts-blimp/index.html

FYI: How about this, party people – Listerine was originally invented 135 years ago to cure gonorrhea. And then forty years later it became a mouthwash. True story.
Regards,
Ted
http://thereformedbroker.com/2018/02/12/passive-my-a/

FYI: For years, it’s been the same refrain. Don’t bail on active management, you’ll regret it when the market turns sour.
And while the selloff that ripped through equities this month has been too short to prove anything, early returns suggest they had a point. Thanks to differentiated bets on stocks, equity mutual funds beat benchmarks across the board from Jan. 29 to Feb. 6, with those in the large-cap growth style doing best, data compiled by UBS AG show.
Regards,
Ted
https://www.bloomberg.com/news/articles/2018-02-13/active-funds-shined-in-selloff-just-like-they-said-they-would

I remember (gett'in more difficult as the clock ticks) about 30 years ago, having a casual conversation(s) with a Merrill Lynch broker, his work of the style of the day; at a desk, touch tone phone at hand.
This gentleman seemed out of place for the type of work he was required to perform, being the cold phone call or an existing client call to buy this or that, per the recommendation of the company (ML). He was near the end of his career and had made a decent income for his family.
I didn't know him well at all, was not a client; but we "clicked" as to chatting about the markets in general. His view and understanding over his 30 year career is that there are "funny" things that happen in the markets, a type of "rigged"; and hopefully we as individual investors should not be affected.
Anyway, the article linked regarding the VIX, etc.; and perhaps more so to the technology of the day. Hopefully, the markets won't be in a future tizzy when a solar flare takes out 20% of the communications satellites.
https://www.bloomberg.com/news/articles/2018-02-13/vix-manipulation-costs-investors-billions-whistle-blower-says
Take care,
Catch

Re HSIEX. I’m missing something here. Lipper scores it lowest (1) on: Total Return, Consistent Return and Expenses. (But rates it highest (5) for Preservation). Shows a negative return for 3 years. What’s to like here?

I guess what I'm saying is that maybe your criterion is not realistic.

There ya go. I was wondering the same thing. T. Rowe’s Spectrum International (PSILX) lost over 40% in ‘08 or I would have nominated it. Not exactly what you’d call an aggressive fund. International funds generally got hit harder than domestic in ‘08.

ARTKX is close with 30.11% loss, but you already own ARTGX managed by the same managers.

Is ARTKX open again? It's been closed to new investors for years, and M* still shows it that way. Recent announcement?

Delivering 9% annualized over the past decade while holding significant amounts of cash is truly impressive. On a risk-adjusted basis this fund scores well.
performance.morningstar.com/fund/ratings-risk.action?t=TILDX&region=usa&culture=en-US
Look at the upside/downside capture ratios, standard deviation, alpha, etc. This fund plays defense really well. The thing I agree with though is the fees are too high. Also, this fund was never run by Whitney Tilson. Correction, Tilson was on it for two years but this was always Zeke Ashton's baby.

Hi Guys,
As Lord Kelvin observed: "Large increases in cost with questionable increases in performance can be tolerated only for race horses and fancy women". Perhaps there might be a few other exceptions.
Good investing advice can be nicely summarized on a postcard. Invest in low cost Index funds and stay the course. This doesn't guarantee success but it greatly improves the odds. Expensive active mutual funds outdistance Index products less than 10% of the time over respectable time horizons like 10 or 15 years. Picking a winner against those odds is unlikely. Many of us persist in that game: lots of luck needed. The professor is on target in this instance.
Best Wishes

@BrianW & MFO Members Yes, its a shame, for years Marty was my go to guy for advice distressed securities.
Regards,
Ted

FYI: Third Avenue Management LLC’s Focused Credit Fund imploded in late 2015 when credit markets turned rocky. On Wednesday, Third Avenue told investors it marked down the value of its remaining positions by more than 50%.
Regards,
Ted
http://www.cetusnews.com/business/Two-Years-After-Meltdown--Third-Avenue-Fund-Drops-Again-.ry7YCtc-PoUG.html
M* Snapshot TFCIX Performance:
http://performance.morningstar.com/fund/performance-return.action?t=TFCIX&region=usa&culture=en_US

I haven't heard anybody anywhere in the past few years recommend buying investment grade debt (I guess @Ted holds some corporates). Interesting, since folks chased treasury yields all the way down to 1% or some foolish figure. Now that they’re over 2.8%, nary a word. It was a rough week for a lot of bonds. That’s what happens when rates spike higher. Everybody sees inflation. But you won’t have much (IMO) If the central banks jack up the short end and push us into recession. Pay your money. Take your chances.
Are high grade bonds with durations in the 5-year range still “dumb dumb”? Or might they fill a need for some seniors unnerved by turmoil in the equity and junk bond arena? (I’m biased having added a few GNMAs recently more for protection than with any thought of making money).
BTW - Sad that every thread if left to its own course seems to lead to bitter wrangling (not that I haven’t sometimes unwittingly contributed). A sign of the times I think - plus @Lewis’s Sputnik-bots may be monitoring websites for mention of certain names. Dunno. It’s gotten so bad some in Congress are considering building a wall (there) to wall-off warring Dem and Rep staffers. https://www.cbsnews.com/news/house-intel-committee-gop-plan-to-wall-themselves-off-from-democrats-devin-nunes-adam-schiff/

I'm at 11%, and will be adding to SFGIX. Or you could go with the Matthews shop, which restricts itself to Asia. Lots to choose from, over there. You may have better luck with shareholder services than I did. I pulled the plug with Matthews several years ago. But you'll have to do some real looking. For example, their MAPIX holds a lot in DEVELOPED Asia, by now. MACSX also holds instruments for current income, as well as growth.

How about the fund David highlighted in this months commentary, CBLDX? The selling point, I think, is in the statement below from the commentary. If you want low risk, this might be a consideration.

CrossingBridge is an affiliate Cohanzick Management, sub-adviser to two exceptionally excellent and distinctive fixed-income funds. They are RiverPark Short Term High Yield (RPHYX/RPHIX) and RiverPark Strategic Income (RSIVX/RSIIX). RPHYX, in particular, has posted an exceptional risk-return profile: it has the highest Sharpe ratio of any mutual fund (as in: #1 out of 7000+) over the past five years and 14th over the past three.

One NJ resident friend of mine who has been a local-new reporter and editor at the Bergen Record (now filling in at the NYTimes and at Newsday) only had this speculation, with nothing more concrete or data-based:
I think that [new, due to the new tax cuts] tax emigration could well happen, although I doubt there’s been a stampede so soon. Even without the new deduction issues, a fair number of people leave their high property tax towns once their kids leave the school systems [while staying in-state]. This has been true for a long time. That’s in part because rates vary extremely widely between counties and even between towns within counties. And of course no shortage of people retire and head south, because of both lower taxes and the climate. Nothing new there. This must be true in Massachusetts, no?
He pays well above $20k in property tax and will downsize to a condo in a couple of years, he says.