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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
@LLJB - you identified the crux of the matter that I was trying to address: "what return do you need, what's your risk tolerance and what's your time horizon?"
ISTM that investing for income is one response to this question. People in retirement need a certain minimum amount of cash monthly, they have a higher need for cash to more than barely get by, and beyond that want cash to enjoy their retirement. The more assured the cash stream is, the lower the expected long term result (and less money expected for that third tier - cash to have fun). That's what I was trying (apparently unsuccessfully) to illustrate with bonds.
I also mentioned annuities as a way to address some of the risk aversion. An annuity that pays out enough to meet just the first tier of needs (survival cash) can allay some people's concerns about having an adequate cash flow. As with most risk/benefit tradeoffs, that comes with the expectation of lower total returns.
Now to get into the weeds :-) One can remove reinvestment risk from bonds by purchasing long term bonds (say, 30 year Treasuries). If your retirement lasts longer than that, well, congratulations!
Would one automatically take the less volatile investment if two investments had the same expected long term returns? Not necessarily. Volatility is not identical to risk, and volatility (std dev) may not always be a useful figure. Since we're talking in the abstract here, I'm not going to worry about whether there are real world investments that behave as follows:
One investment returns 2%/month 50% of the time, and 0.0098% 50% of the time. You don't know which one for each month, but over the course of a decade it returns 230% (that's basically 1% compounded 120 times)). The other returns a rock steady 1%/mo, except for a random spike (down 50% one month, up 104.02% the next month).
The std dev of the first investment is 1.00 (since the monthly return each month is 1 ± 1). The second investment's std dev is 10.53. Yet I'd take that investment. All I would have to do is wait out the dip (crash?) for a month and I'd have a smoother ride. Keeping a one month buffer is all I'd need.
So much of this is subjective. Given two investments that you somehow know will have the identical performance over, say, ten years, and you will not be selling over that period of time, their paths to that return (volatility) don't objectively matter.
Which gets us back to addressing sequence risk. Some people will bifurcate (or trifucate) their portfolio into buckets to manage that risk, drawing from the most stable bucket and disregarding the volatility of the other bucket(s). Others will prefer investments that try to temper downside movements. It sounds like KCMTX might serve them well, at least if it provides the downside protection you described.

msf December 2017 in Fund Discussions
reverse split for NBGNX?
@randynevin, Thanks for mentioning this fund.
Seems like the perfect example of where cost matters.
Each share class charges a different set of fees (Expense Ratio & Loads, 12-b1, etc) causing most of this distortion in the NAVs of the same fund over time. Not sure if this "split" is in the best interest of the shareholder or the marketing department.
The advisor share class NBGAX (1.35% ER) is almost 80% more expensive as the institutional share class NBGIX (0.86% ER).
There is a share class NBGSX (R6 shares) that has an ER of 0.75%.
Share Classes:

Looked at over the last 29 years (1988- 2017), a $10k invested in the same fund but different share classes would have netted the following:
NBGIX = $313,098 (over 12% more in the investors pocket than NBGAX Advisor share class) The Advisor "share" was 12% more than Institutional "share"
NBGAX = $274,324
NBGNX = $301,654
NBGEX = $298,384

Finally, This fund seems to manage downside risk very well so you pay for that and this fund seems to have a track record to prove it can manage downside risk better than many of its managed peers and especially the index (VISGX).
Also, over the last five years PLTIX seems to have exhibited some positive "Factor Based" results in the Samll Cap Growth space.
Over the last 10 years 3 other funds that compared well against NBGSX (PRDSX, VRTGX, and CCALX):

bee December 2017 in Fund Discussions
Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
The only reason I see to differentiate between income (dividends) and appreciation is sequence of return risk.
If you invest in a bond, you know that you will receive that same interest payment, month after month, regardless of how the price of the bond fluctuates before maturity. When it matures, you can roll it over and continue on.
If you invest in something that doesn't pay enough interest/dividends to meet your cash needs, then you'll have to sell assets to make up the shortfall. Investing for income and investing for total return may have the same long term performance, but with an equity investment you may be forced to sell at an inopportune time. (You may also wind up selling at a fortuitous time when the market is soaring.)
If you assume long term performance is the same then you would always choose the less volatile option, wouldn't you? If you're time horizon is less than long term then its a very different question. The thing with an actual bond, though, is that it may provide the certainty of a fixed income stream until maturity but rolling it over at maturity is subject to all the point in time risks of higher/lower interest rates. That could be better or worse than the timing risk of needing to sell equities along the way to meet your needs except all your risk is associated with one point in time rather than having the flexibility to manage the timing of your risk depending on how you feel about the market.
If you just consider mutual funds you should, in theory, expect a higher return over time from a more volatile asset, but the question of which you prefer seems just like any other investment decision- what return do you need, what's your risk tolerance and what's your time horizon? KCMTX has been almost as volatile as the S&P 500 over the last 3 years, more volatile over the last 5 and the returns are lower while its mostly been a risk-on environment and invested in equities. PRWCX has been a good amount less volatile so you've been getting something for the cost of lower returns.
As a general rule I'm a believer that funds like KCMTX are intended to outperform when there's a significant downturn that lasts long enough for the portfolio to move away from equities and into other asset classes that will do far better. The last 8 years has been pretty difficult because most of the downturns, even the more painful ones, have been relatively quick and that causes whipsaws rather than advantage. One day that's going to change and when it does then we'll really see how good KCMTX's process is. If it performs really well during a big market downturn its volatility and risk-adjusted returns will also look a lot different. At this point, though, I think you have to be really happy if it captures a good portion of the upside and doesn't get whipsawed too often. I don't think it should be a big surprise that it has more volatility and lower returns.

LLJB December 2017 in Fund Discussions
Buy, Sell and Ponder December 2017
Hi @Ted, Are you not window dressing?
Skeet
I always assume in posts like that that the author also indicated earlier the date of purchase(s). So I would be fairly confident @Ted has done that somewhere along the way. He’s obviously a lot more aggressively positioned than most investors in their 70s or 80s are. I’m happy for his good fortune.
Personally, I’ve strived to leave visible documented “tracks” in the What Are You Buying, Selling, Pondering? threads as to my purchases and sales of a tactical nature. That’s only fair to readers. Some of those tactical moves reported over the past 3-4 years involved funds like: PRLAX, PRNEX, OPGSX, OREAX, QRAAX (closed) and PIEQX. Not perfect, but at least I’ve tried to be transparent. By that, I mean that if you’re going to write about how much a fund you hold has gained, you should also have noted your purchase at/about the time you bought.
Early this week I reported a small purchase of a gold and precious metals fund (OPGSX). Anyone following the “tracks” would find that I sold it in early September at/near a yearly high. And that it dropped more than 15% in the 3.5 months I was out of it. And, obviously, readers can note how it pans out in the coming months. IMHO these “buying and selling” threads have pretty much run their course. So I probably won’t share future buys and sells. Thanks to those who have contributed and continue to contribute to them.
Regards

hank December 2017 in Fund Discussions
Etf Playbook for 2018
http://www.etf.com/sections/features-and-news/one-strategists-etf-playbook-2018-0?nopaging=1
John Davi is known in the fund industry for his research, and now at the helm of New York-based Astoria Portfolio Advisors, he is managing some $115 million in ETF portfolios. For five years, he has been putting out an annual ETF Playbook, and he shares here what he likes and doesn’t like when it comes to ETFs for 2018.

johnN December 2017 in Fund Discussions
Barry Ritholtz: Wall Street Wises Up To The Folly Of Forecasting
FYI: It is that time of year, when the financial industry engages in its annual ritual of making forecasts, which is usually little more than the prelude to looking foolish. Titles like “Outlook for 2018, “What to expect in the new year,” or some variation thereof litter the landscape. Over the years, it has been my distinct privilege (and truth be told, pleasure) to point out how silly this process is.
Regards,
Ted
https://www.bloomberg.com/view/articles/2017-12-15/wall-street-wises-up-to-the-folly-of-forecasting

Ted December 2017 in Fund Discussions
Fidelity Manager Rips Up Buffett Playbook, Goes All In On Crypto
The point is a matter of my perspective, having covered this stuff for too long. People were saying the same exact things in 2000--valuations don't matter. They don't matter until they do. The idea that bitcoin related cryptocurrency stocks are being trotted out as a good idea by this manager is very disturbing to me. This is what this manager says;
"I don’t believe in Warren Buffett," he said. "I care about new things, things that are innovative, that are growing, that are changing the world."
He’s unfazed if those stocks look expensive. "Valuation is an immaterial part of the process for me," he said. "It’s the least useful piece of information you will ever get because everybody knows what the valuation is."
That is exactly what I used to hear back when investors were buying stocks like Pets.com in 2000, and a very odd and dangerous thing to say nine years into a bull market.

LewisBraham December 2017 in Fund Discussions
Point of Interest ... KCMTX Makes Annual Capital Gain Distribution
Hello,
About a month ago, or so, Parker Binion who is one of the fund managers on KCMTX began to post on our board.
For those that have an interest in KCMTX, as I do, I thought I'd post recent news on his fund in that it made it's annual distribution on December 13th in the amout of $1.69.
Looking back over the last five years KCMTX has paid out $4.57 in distributions while it has grown its nav from a starting value of $12.24 to current value of $13.06 (after distribution). With this it has demonstrted it's ability to to grow its value while at the same time make reasonable payout to its investors that might be seeking an income stream coming from capital gain distributions. Know that these annual distributions vary in amounts.
This fund is listed as a multialternative fund by Morningstar and one that actively engages the global markets. Since, it can hold just about anything the mangers choose I consider it a hybrid type fund. With a turnover ratio of 318% indicates that it is very active in changing its positioning. This fund reminds me a lot of Marketfield and Ivy Asset Strategy which I use to own but no longer do. As these funds grew in size they also became bloated, from my perspective; and, with this, it took longer and longer for their managers to reposition them. As their performance waned I sold them off.
I have linked below KCMTX's Morningstar Fund Report.
http://www.morningstar.com/funds/XNAS/KCMTX/quote.html
I wish all ... "Good Investing."
Old_Skeet

Old_Skeet December 2017 in Fund Discussions
Did anyone listen to the Grandeur Peak conference call this morning?
@openice, thanks so much for the summary!!
@Ben, your question is one I've had as well. I'm a shareholder of 3 of their funds, both directly with them and also through my brokerage account. In this case I received an email about the call but there was a call earlier this year, maybe 6 months ago (I can't remember exactly) and in that case I received nothing. I only found out about that call because of something mentioned here or maybe there was a comment in one of their quarterly commentaries. My assumption has been that there's a conscious judgment being made, like that the mid-year call was just institutional while this one was for everyone, but your experience makes that less clear.
I'm also on their mailing list, I think because of some questions I emailed them at some point and I receive multiple emails with the quarterly commentaries. In this case I only received one email, so I'm pretty sure that's not coming because of my brokerage account and I suspect its also not coming just from being on their email list. It could be, but just a guess, that I received the email as a result of the direct account I have with them. There's no question, however, that there's inconsistency and it's not totally clear how they're doing things regardless of whether that's intentional or not.
I like these guys a lot and they have more of my money than any other fund or fund company, but I liked them a lot better when they acted like they wanted to be a tiny niche player with tight control of AUM and essentially one fund sliced a handful of different ways. Each of the business decisions they've made over the last few years has been explained very logically and has made some sense in and of itself, but when you look at it all together I feel like some of the luster has been lost and their not really as altruistic as they held themselves out to be initially. At least in my case, its something I'll be keeping an eye on.

LLJB December 2017 in Fund Discussions
M*: Making Fund Screeners Fantastic
FYI: In the wake of "The Fantastic 43” article in September, readers wrote to ask if there was a way to replicate the screen in the Premium Fund Screener tool on Morningstar.com. Unfortunately, the Manager Investment of More Than $1 Million in the Fund and Returns Above the Fund’s Benchmark Over the Manager’s Tenure screens that were crucial to my tests are not available in this tool, which was built many years ago.
Regards,
Ted
http://beta.morningstar.com/articles/839773/making-fund-screeners-fantastic.html

Ted December 2017 in Fund Discussions
Buy, Sell and Ponder December 2017
@MikeM - I respectfully request that you not put your rally stopping powers to work at this time. I'll call you when it's appropriate to do so.
On an off topic matter, I truly enjoyed the game your boys played in this past Sunday. Very reminiscent of a New Years Day tradition here in my neighborhood of this frozen tundra we call home.

Mark December 2017 in Fund Discussions
Ben Carlson: What A Complacent Investor Looks Like
Hi Bee,
Thanks for reading my post and for the excellent, informative graph that you included in your reply.
I did read the article referenced, and I would say that the line you quoted is not unconditionally correct. It depends. It depends on the specific circumstances of the individual investor. If he is adding to his portfolio, market volatility is surely an "opportunity". But if the investor is in retirement and mostly using his portfolio as one source of income, volatility can be frightening.
The approximate equation that I quoted really does tell the story. Volatility does indeed operate to reduce net portfolio wealth over years below annual average return. The higher the volatility, the quicker and more forceful is that negative impact. And it's always negative.
Give it a test by running a few what-if possible cases. A couple of years of possible what-ifs will demonstrate the wisdom in that simple equation. Of course you will tire of this exercise after a few samples so the proof will be incomplete. However, I hope it will be sufficient to reinforce the validity of the questioned equation.
Thank you once again. Good luck good investing.

MJG December 2017 in Fund Discussions
Muni Market In 'Fever Pitch' As Investors Can't Buy Fast Enough
I added, for me, a double tax free muni fund (FMINX) to my income sleeve a few years back. Since, then I have been buying about every six months (late fall and early spring) as part of my seasonal investment strategy. Seems bond funds are the weakest during this period while stocks seem to be the strongest. For me, my tax equilvent yield is a little above 4% while the 10 Year Treasury is currnetly paying just short of 2.4%. This in of itself explains, in part, why they are in such demand.

Old_Skeet December 2017 in Fund Discussions
Tech Is Taking Over Our Lives, And Our 401(k) Accounts
You could have written that headline 20 years ago...
That said, tech is -- and will --put severe financial pressures on many industries -- displacing (or buying or replacing) them.
(Physical-) travel agents? (Mostly - )Long gone.
Retail? Check.
Pay/cable TV? -- Amazon prime, Netflix, and (soon-) streaming Disney/Fox content direct.
Many others too. Glad I will be out of the workforce soon. The "AI job-pocalypse" is coming...

Edmond December 2017 in Fund Discussions
Value time again ??? Recent indicators and returns pointing a new direction for the hot money?
I’ve felt it was “value time” for the past 5 years. But that’s just me. Not everybody sees it that way.
On the other hand, doubt anything out there is really cheap. Proceed at your own risk.
Warning: You are about to enter the “annual distribution zone.”
(PRPFX was the first of mine to take a haircut today.)

hank December 2017 in Fund Discussions
What To Consider Before You Dash Into Cash
Maybe it is a good time to sell. Any of you remember how much the market loved the turmoil Nixon brought on? I wish I had an in-house lawyer who would say he was the one speaking when I had put my foot in my mouth. More will be revealed, but it won't be good for the market.

All I remember about RMN’s impact on markets is that he is/was the only Pres. during my lifetime to impose unilaterally an immediate temporary freeze on wages and prices. (Hope I’ve described the 1971 executive order accurately.) I was 20-something at the time and enroute to my first good paying post-college job when the news broke over the radio.
Sell decisions are fraught with peril as several here and at FA have noted over the years. For longer term investors there’s the dilemma of when to get back into the market. It’s a coin-toss at best that they’ll manage to re-enter at lower prices than they sold. Even for older investors with shorter time horizons there’s the risk of forgoing substantial future gains should the markets run hot for several more years. Than there’s the sector issue. An overvalued S&P or high yield market doesn’t necessarily mean that deep value, financials or industrial metals are overvalued. Sometimes the opposite is the case as hot sectors tend to pull money away from more tepid markets. Hope I’ve made clear that despite my misgivings about the current market euphoria, I could never recommend to someone else that they sell.
What I haven’t heard mentioned lately is the Presidential election cycle. But that’s a whole different topic.

hank December 2017 in Fund Discussions
What Are Donor-Advised Funds?
I guess the author of this WSJ article didn't have much time before his deadline -- it's brief and doesn't say much.
I think Morningstar had more information recently, comparing donor-advised funds from different investment firms. Their focus was more on how these funds perform as investments over time.
I've used the Fidelity Charitable Trust for about ten years and never considered this as a place to grow money. My time horizon is generally fairly short. I'll move some mutual fund shares or shares of stock into FCT and place the funds in the money market fund there, then direct the "grants" to charities fairly quickly.
There are several advantages. As the article says, I get the credit for the charitable contribution in the year I make the deposit, even if the individual grants are not delivered until the next year. Fidelity allows small grants; I've given $100 to a local homeless shelter (which met Fidelity's guidelines), whereas some other donor-advised funds have much a larger minimum.
Fidelity sends cash; some charitable organizations might have a hard time handling shares of stock, or especially shares of mutual funds.
Donating this way gives you a tax deduction for the entire amount of your contribution, no matter what your basis. I've donated some small spinoffs just because I didn't want to figure out the basis. I gradually donated one entire mutual fund position over a period of years, after accumulating it over a very long period of years (with reinvested dividends and monthly contributions); I did not want to try to establish my cost basis.
Of course, there is a small fee assessed annually.
It's usually best to donate appreciated assets and a donor-advised fund makes it simple to do this. It's all online and your past giving history is readily available.
David

dstone42 December 2017 in Fund Discussions
Why buy bonds, and a few short lists
Junkster's Forum Comment
Here is looking at you @MikeM.
Discuss > Single Post All PostsForumsBlogsSharingTopicsJoin
Re: Bond OEFs - what now
Junkster 11-02-2017, 11:05 AM | Post #3880685 |
0
>>>> FD says "Most of my money is in 3 horses PIMIX,IOFIX and NHMAX(switched from PHMIX was luck or skill??). IOFIX last jump was 8/22, are we going to see the next one this month? let's see if the pattern will continue.<<<<<<
Hope you are right about IOFIX FD. My problem is when a pattern becomes too well known and predictable....... Last year it had a big jump on September 30 and then it wasn't until February 24 of this year for the next one. Plus AUM which have grown dramatically may impact the pattern. But I will stay put with IOFIX for awhile. Pimco's Mark Kiesel said just the other day that non agencies are mispriced and " are among the few bonds that have price upside"
I've found a newer fund and a mini IOFIX I haven't seen mentioned anywhere. It's not available in all states and I contacted them to have it blue skied in my home state of KY which takes but a few weeks. I went through that process with SPFRX when it was a young fund back in 2015. Regardless, looking forward to 2018 and seeing where the momentum will be. Junk corporates are so unloved because of valuations they may surprise. Or maybe bank loans because we may have more aggressive rate hikes.
Will check back in next year. After this post immediately deleting all my trading and investing forums. Winter off trail hiking is just around the corner. At 70 years old hanging out on forums has lost much of its appeal. Good luck to everyone.</blockquote>
And your point is? The Master of Misrepresentation strikes again conveniently omitting this was a post made on the Morningstar board. Trying to stir things up? That was simply my way of saying goodbye to the Morningstar forums. Had never posted there till IOFIX became a topic of conversation after my comments made on this board earlier in the year. Some great posters and conversations over there but not my cup of tea. But no way was I able to delete this fine board try as I could. As for that mystery fund much ado about nothing. The River Canyon Total Return Bond fund for the time being will not be available on any retail brokerage platforms.

Junkster December 2017 in Fund Discussions
Why buy bonds, and a few short lists
Junkster's Forum Comment
Here is looking at you @MikeM.
Discuss > Single Post All PostsForumsBlogsSharingTopicsJoin
Re: Bond OEFs - what now
Junkster 11-02-2017, 11:05 AM | Post #3880685 |
0
>>>> FD says "Most of my money is in 3 horses PIMIX,IOFIX and NHMAX(switched from PHMIX was luck or skill??). IOFIX last jump was 8/22, are we going to see the next one this month? let's see if the pattern will continue.<<<<<<
Hope you are right about IOFIX FD. My problem is when a pattern becomes too well known and predictable....... Last year it had a big jump on September 30 and then it wasn't until February 24 of this year for the next one. Plus AUM which have grown dramatically may impact the pattern. But I will stay put with IOFIX for awhile. Pimco's Mark Kiesel said just the other day that non agencies are mispriced and " are among the few bonds that have price upside"
I've found a newer fund and a mini IOFIX I haven't seen mentioned anywhere. It's not available in all states and I contacted them to have it blue skied in my home state of KY which takes but a few weeks. I went through that process with SPFRX when it was a young fund back in 2015. Regardless, looking forward to 2018 and seeing where the momentum will be. Junk corporates are so unloved because of valuations they may surprise. Or maybe bank loans because we may have more aggressive rate hikes.
Will check back in next year. After this post immediately deleting all my trading and investing forums. Winter off trail hiking is just around the corner. At 70 years old hanging out on forums has lost much of its appeal. Good luck to everyone.

Old_Skeet December 2017 in Fund Discussions
Polen Global Growth
@VintageFreak
This fund has been in my portfolio since 2015. Watching to see what happens with current fund management and holdings makes sense. Polen Capital executes a specific process. The remaining managers know that process. The firm has been putting some focus into international investing in recent years. I'll hold on to see how things go in 2018. Given the low turnover rate and small number of holdings, I don't expect there will be any rapid decline in performance over the short term due to the management change. So, I don't feel a need to make a rushed decision.

davfor December 2017 in Fund Discussions