I'd go with Templeton. Not just because I finally sold out of TGBAX last month after several years, but the firm just seems to be way behind the times in terms of offerings, fees, loads, and so forth. I was also less enthused by the firm's processes for conducting shareholder communications when "little" things like major distribution cuts or distribution policy changes were (quietly) announced.
I also don't like funds/firms (not Templeton, in this case) who have their rock stars ALWAYS out in the media -- while some of their products may be awesome, I like my fund firms to be fairly boring and not constantly seeking AUM or publicity.

I enjoyed that MJG. I consider Charlie Munger to be the real brains at BH as the Buffett has gone political the last number of years.

David: "(Edmond), do you have wisdom on PDI?
REPLY: Wisdom? No. I've traded in/out of it over the years. It seems to often generate a special year-end divd. It goes ex-divd on 12/22 (if I recall) a rather substantial special divd. So NAV and price will likely drop then accordingly. Its trading at a premium currently. Buy/sell points are not UN-important when trading CEFs -- just as they are not UNimportant in buying ANY security. The OP's initial inquiry indicated his objective was income. Several of the PIMCO CEFs especially seem extraordinarily good at maintaining their disty --- and (just as importantly) EARNING that disty.
As a general rule, with bond CEFs, besides evaluating current/historical premiums/discounts, I always like to review the most recent AR/SAR, and determine if the disty/share is covered by NII/share. If there is a substantial UNDER-earning of the disty, that is a big red-flag for me -- as it may portend a future disty cut (which is not fun for current shareholders. PIMCO publishes a monthy UNII/NII earnigs update on their website. PDI, PCI, PKO and a couple others look 'OK' to me -- but as always, choose buy points CAREFULLY, and consider easing into any position, rather than going 'all in' on one date.
=====================================
ZB: "..keep 20% on the sidelines for other opportunities"
REPLY: As a general comment, I think NOT being fully invested (holding cash) works well for a lot of people (this writer included!). Though I believe that position is a minority one. Most of the financial industry has a financial interest in keeping all retail investors fully invested all the time. And of course with the stock market at all time highs (as presently) those folks can point to the opportunity cost of holding cash. Of course we won't always be trading at all-time highs. Cash IS -- as it has been since 2009-- the most unloved of asset classes. But cash provides reliable "ballast" to a portfolio (bonds do too, but not always). Perhaps most importantly, as you note, cash provides optionality -- one cannot "buy low" if one is always 100% invested. And there is a "sleep easy" factor (speaking for myself) in holding cash. These are not quantitave benefits, they are qualitative. But that doesn't make them unimportant.
Good luck.

I am sorry to hear about your health. There are lots of good suggestions already. My 2 cents. I think it is possible to put together a 4% yielding portfolio without stretching. An early retiree usually needs to have more equities to get a little growth to make sure you don't outlive your money and to provide inflation protection. Think definitely more than 50%. If you can offer up how many years we should plan for it will be easier to offer an allocation suggestion as some early retirees will want 75% stocks. If you have an interest in managing it yourself, I'd recommend some individual issues to complement some funds. Here's an example that is 50/50 stock bonds that will yield about 4.2%:
Individual stocks (with 4% in each):
SO
WEC
JNJ
PG
MMM
UL
REIT's (with 4% in each)::
WPC
O
HCN
Utility ETF (with 4% allocation):
XLU
Baby Bonds (held to maturity; with 4% in each):
CCV
GEH
Preferred Stocks (with 4% in each):
PSA.T
NNN-E
Open Ended Mutual Funds:
TILDX (with a 4% allocation)
AVEDX (with a 4% allocation)
FFRHX (with a 14% allocation)
Vanguard intermediate term bond ETF BIV with a 14% allocation
CEF's (with a 4% allocation to each):
ETB
NSL
(Note, I am long many of these.)

@Zoneblitz More Options and Homework Nice table in SA article
BDC Buzz, from Seeking Alpha
Dividend investing, high income, BDCs, portfolio strategy
Baby Bonds for business development companies are finally starting to deliver attractive yields to investors.
Most of these bonds have maturities of 2-7 years and offer stable yields of around 7%.
I am expecting higher yields in the coming weeks and will likely be making purchases.
http://seekingalpha.com/article/4025080-rising-yields-bdc-baby-bonds
As mentioned by @Edmond. Good source for research and tax status of interest/dividends
http://www.quantumonline.com/search.cfm

Hi Crash. This is a stimulating topic which I find very interesting. But rarely if ever do I attempt to forecast where markets will go. I've been surprised too many times in the past to trust my instincts in that regard. What I do try to do (sometimes successfully) is add or remove risk in the portfolio by raising or lowering my cash and short duration bond position. On that score, I'm not bullish now - but not bearish either. Have been pretty much sitting on my hands with a slightly elevated cash/short bond position for several months. (It wouldn't take much more of this market rally to convince me to raise that a bit higher).
Re: RPIHX - Like you I'm locked out of PRHYX. But I'm not eager to own high yield now anyway. Mark Vaselkiv who has run the very successful RPHYX for many years is co-manager of RPIHX. So that's good. If I wanted a substitute for PRHYX, I'd probably buy it trusting in Vaselkiv and T. Rowe's management in general. But I think everyone looking at high yield now needs to realize that these securities tend to have risk characteristics typical of both bonds and equities. In the case of very low grade junk bonds, the risks are even more closely aligned with equities. Be very worried about these if the stock market takes a deep dive. They're not imune to carnage.
Re RPSIX (which you don't like): I like it as a stabilizing influence in my portfolio. You are correct that it's not a bond fund. It's multi-sector Income, even holding 12% + - in their Equity Income stock fund.
"Do I need a U.S. domestic core-plus bond fund, after all?" - Heavens no. I've never felt that need. That's been especially true the past 5 or 10 years with 10-year Treasuries yielding under 5%. That's not to say bonds can't serve a purpose in many portfolios. But it depends on your other holdings and your style. Does everyone need a dedicated bond fund? No.

Thanks @Junkster
Day after your post of 12/04 bought a cef loan fund TSLF.
http://fwcapitaladvisors.com/wp-content/uploads/2016/12/TSLF_Brochure_2016_Q3.pdf
Also own RIMOX Mix of Hi-Yield/Bank Loans /Alts in EM/Euro/Domestic http://www.citynationalrochdalefunds.com/Content/pdfs/2016/8427/FIOF Portfolio Holdings by Sub-Adviser Nov 30 v1 12-07-16.pdf
I would sure like to know the whos that are so down on bank loans.
Gundlach's webby If you must own fixed inc.-floating rates
Note to @Crash Gundlach's Dec webby: Trump not good for Bond prices.DBLTX always a lower duration than AGG makes the fund a good choice in a rising interest environment.
Bond Market Fascinations: An Interview
Acropolis Investment Management LLCPosted on December 19, 2016 by David Ott
I..don’t think that the shift in rates is entirely explained by the election. The other factors include a reversal of the ‘fear trade,’ which has been going on for years where investors flock to safer assets such as US Treasury bonds to avoid uncertainty. This, along with central bank policies, took yields around the world into negative territory and it came to a paramount this summer with the uncertainty surrounding the Brexit vote.
Over the summer, you can see that everything was locked up and that there was a lot of sideways movement. Once the election hit, yields just broke free. And, of course, the Fed reducing monetary stimulus is a part of it too.
In the short-term, you could see spikes, but I’m not sure that the economy can take substantially higher interest rates. There’s research now that shows that if the yield on the 10-year Treasury gets up to 2.65 or 2.75 percent that it would negatively affect the economy.
I wrote an article for ALM Insights about the debt level in our country (that you can read by clicking here: the article starts on page six). The last time the Fed was raising short-term interest rates in 2004, the total-debt-to-GDP was 180 percent.
When you look at public and private balance sheets today, we’re almost at 260 percent, meaning that our total debt, both public and private, are much higher relative to the size of our economy. Small changes in interest rates will be magnified today because the economy is more tied to borrowing costs. It’s like anything with leverage.The Fed’s forecast for next year that just came out last week calls for three hikes to the overnight rate. They’re the most aggressive forecaster in the market right now – the market only thinks that there is one or two more coming.
The Fed has consistently had much greater expectations than the market. This time last year, they projected four increases and we got one. The year before that, they said four and we got zero. Their track record is not very good.
I like (the) old argument that moving bond duration around is akin to trying to time the stock market since duration is essentially the main beta for bonds. Forecasting changes in interest rates is an impossible task.(we try )not to gamble on the direction that rates will move next.
http://acrinv.com/bond-market-fascinations-interview/

A good suggestion. Since I've been pointing out risks, some of the risks in individual bonds include:
- issue selection - lack of diversification. The most aggressive rules of thumb I've read are that one should have at least $50K (muni) or $100K (corporate), so that one can own bonds from at least 10 different issuers. Here's Fidelity's page recommending a $100K-$200K min, depending on type of bonds.
- inflation risk - locking in a fixed rate of return for many years, even if inflation rises. (WF - CUSIP 94974BFY1 - is 10 year, noncallable)
Nominal interest rate is not a risk, because by hypothesis one is accepting a 4% total return (holding to maturity), regardless of how high market rates go.
Note that the ARES bond (CUSIP 04010LAR4) is a discount bond, so while its total return is about 4.4%, its current yield is about 3.75%, based on a coupon of 3.625 and a current price of about 96.5. The rest of the yield come from the price rising to par (similar to a zero coupon bond, with similar tax treatment).
Nice sampling of bonds with different attributes.
I like the idea of a build-your-own portfolio. It does take a substantial commitment to make it work.

Point well-take Derf.
I guess what I was trying to say is: why would rates go down and stay down over the next few years, thus why aren't BL's a good investment for the time being?
I don't expect 10+% going forward, but as a stabilizer/hedge with a decent yield, that doesn't seen too bad to me. Again, I am just learning about this category, so I could be way-off; that is why I pose these questions and thoughts. I am trying to educate myself and these forums are often a good avenue!
Matt

Why do many seem so be down on BL funds? The prior two years were not stellar; yes 2016 has been.
I am just becoming familiar with BL's and have recently purchased LFRAX (Lord Abbett; pays a 4+% yield). In a rising interest rate environment, i would presume over the next two or three years, doesn't an investment in a FRBL's make some sense as a diversifier and hedge? Maybe not as a long-term/forget-about-it holding, but maybe as a medium-term investment? Or, at least while rates are rising?
I understand BL's move more off of the LIBOR, but does anybody think rates, in general, are going down and staying down for very long?
Do you believe that all of the rate increases over the next two years have already been "baked-in"? Are there better investment vehicles in a rising rate environment, which we appear to be in now and probably for the foreseeable future?
Of course, NO ONE knows for sure, but we are being told this by those who influence rates; shouldn't we pay heed?
Does anyone see a recession in the near-term?
I also own PONDX, PTIAX and GIBLX along with a Muni, so, I am not putting all of my eggs in one basket (pardon the cliche's).
Thank you for any comments, opinions and thoughts!!
Matt
p.s.
I've posted similar comments and questions on M*

Generating 4% yield will take some risk, although if interest rates rise as treasuries will yield 3+% and it will be easier.. but that will be due to inflation so your target may move.
You need to consider the loss of principle risk you run reaching for yield as there is no such thing as a free lunch.
there are multiple advisory services available for stocks and mutual funds but few for income investors. Most of the equity advisors have an "income portfolio" that is loaded with equities and if you look carefully, lost 20% (vs 45% for SP500) in 2008. This would destroy anyone needing current income.
VWINX is everybody's suggestion here, but M* discusses the impact of their bond portfolio ( which has a duration of over 5 years) on their recent returns. In funds like this you have to take what they give you.
I think traditional open end mutual funds are a bit limited here, but there are some good choices in other posts like ZEOIX and RPSIX
Look at Kiplinger's Income newsletter. He has a lot of ideas, doesn't trade much at all ( too little in my opinion), but points to ideas most of us haven't thought of . Most of these are individual stocks, REITS, MLPs, BDCs etc. However, he seems to believe that riding a position down 50 to 75% is Ok if it is still paying a good dividend.
You can also set up your own dividend stock portfolio if you like to do the background work. There are a lot of ideas in Barron's for example, or M* dividend investor.
Doing it on your own will save you 0.8 to 1.25% in an actively manged fund, but you have to be knowledgeable, spend a fair amount of time reading and run some risks
The other thing that has not been mentioned is to assemble your own bond ladder with increasing maturities. you can roll over the shorter maturies as they mature and re-invest at higher interest rates. There are several ETFs that mature at specific dates that would work for this. Look at Guggenheim Bullet shares
You can do alright if you assemble a collection of dividend growth stocks, high yield bonds with short maturities and watch them carefully, but 4% will be difficult

IMHO, there's no way to get a 4% yield without a good amount of risk. Not that that isn't okay, just that one should be aware of the risks assumed. There are the most obvious ones - interest rate risk (loss of value due to increasing rates) and credit risk (delayed payments, defaults, loss of principal).
But there are some others as well embedded in several of the suggestions. One is declining value of your portfolio, not due to interest rate risk or even inflation (though that one's omnipresent). Rather it is using principal to get higher current yield.
If you buy a bond with above market interest (current yield, coupon), you'll be paying above face value (premium bond). For instance, you might pay $110 for a bond with a $100 face (par) value, you'll get that higher stream of payments, but you're gradually losing value, beyond inflation. Same thing with bond funds. This is why I prefer to look at SEC yield, which incorporates this loss (or gain) in bond value in calculating an effective yield.
PONDX's trailing yield is 7%+, but its SEC yield is 3.35%. Conversely, DVY's trailing yield is 3.09%, but its SEC yield is 3.46%.
Another risk is leverage. Funds, especially but not exclusively CEFs (e.g. PONDX also leverages), borrow money at short term rates to buy long term securities yielding more. This works so long as the long term securities continue to yield more. A risk is that rising interest rates will make replenishing cash more expensive (as the short term debt matures), and perhaps even cost more than the fund is receiving on its older long term securities.
Here's a M* video from 2013 (a few years before short term rates started rising), that explains how these funds may work:
http://beta.morningstar.com/videos/610062/What-Will-Higher-Rates-Mean-for-Levered-Closed-End-Funds.html
Then there's the use of derivatives. This can be anything as "simple" as mortgage backed securities (with call risk that can behave poorly with rising interest rates - negative convexity) to a slew of more esoteric stuff. In its analysis of DLTNX, M* lists some of these (while acknowledging that DLTNX has matured a bit): "These securities, which included inverse floater, interest-only, and inverse interest-only mortgage tranches, throw off lots of income but can also be highly volatile and suffer from bouts of illiquidity."
For the most part, you're seeing lots of fine suggestions here, and there's only a little I can add to them. I would not use BAB - Build America Bonds haven't been issued for years. As a result, all the other funds (e.g. BABS [Nuveen], BABZ [PIMCO]) have closed down or broadened the types of bonds they can invest in.
If you're looking at SCHD and DVY, you might want also want to look at VYM. It invests a bit more broadly (~400 securities vs. ~100 for the others), with half the turnover (11% vs. 21-22%). Not significant differences, just another alternative to throw into the mix.
Finally, I'm still working on figuring out how PGBAX seems to walk on water - trailing and SEC yields of 5%+, no leverage. It does dive deeply into junk (averaging B rating), but the closest world bond I found so far, RBTRX, has a significantly longer duration and an SEC yield of "just" 4.5%. So credit rating alone isn't the full story.
If this type of portfolio appeals to you, you might also look at TTRZX or GIM. GIM has been trading at large discounts for the past three years (perhaps reflecting its poor performance over that period, or perhaps its move to almost all EM bonds that typically trade at similar discounts).

Hello,
Due to some medical issues I may be forced to find ways to generate income. I have read this forum for some time and think the members here are top notch. I've managed my own investments for about 15 years and consider myself pretty knowledgeable. However, truth be told, I'm no expert with bonds or bond funds.
I have sought out the advise of a financial advisor and one consultant from a major discount brokerage. Both had very different opinions. The financial advisor recommended a basket of American Funds. The consultant recommended several ETF's, like BAB and high yield mutual funds. ( The actual recommended portfolio only had 18% dividend paying stocks)
Most of the assets are in a taxable account. But, I guess, I can't allow the possible tax ramifications to dictate every investment decision.
I'm thinking of funds like:
VWINX
PONDX
SCHD
DLTNX
High yield bond ?
Short term ?
Trying to generate around 4% yield with around 30% in high quality stocks, if possible. I know that interest will likely keep going higher and this could cause serious issues with the bond portion.
I would absolutely love to hear the thoughts and opinions from forum members. Thanks in advance

@AndyJ, I am investing with Andrew Foster's fund but not this new EM value fund. For now it is too new for me and I prefer the Seafarer Oversea Growth and Income fund. Mr. Foster track record goes back to the days of Matthew Asia Growth & Income fund.
If you wish to invest in the institutional shares, Seafarer makes it possible for retail investors with a minimum of $1,500 with an automatic investment of $100 (minimum). So you really don't need $25K as the minimum. Also you can transfer additional IRA fund from other brokerages to Seafarer if you wish. Andrew Foster is one of the few fund manager I follow for many years.

Wow! A manager of a managed-futures fund produces a survey which might spark interest in its fund... Yeah, no conflict of interest there...
Altegris' managed-futures fund (EVONX) is rated 5-star by M*, meaning it has among the best historical records in the managed-futures category. But let's take a look at that record. It commenced operating late 2011. So full year returns as follows:
2012...(3.17)
2013....0.67
2014...25.92
2015....3.02
2016...(-0.33) [through 12/16/16]
The above returns are net of 1.94% expenses (ouch!)
My reaction? "meh". One "super" year. 4 X "ehh" years. The sequencing/size of the returns almost looks like one might "earn" at one of the gaming tables in Vegas. Makes one wonder what the 3-star rated fund returns look like in this category...
Others may be interested, not I. When considering alternatives, I am looking for something that delivers mostly consistent, positive returns. I'm not looking for outsized returns, but consistent (-positive) ones. If an 'alternative' vehicle can't do that, well, there is fixed-income for ballast & income & equities for growth (with risk). In fact, old, reliable Vanguard Wellesley delivers more consistent, positive returns, thus a "smoother ride", and larger 5-year trlg returns.
p.s. - looks like Gundlach is one of the managers.

Once again, WTF is not working with these funds? And should I wait for another article perhaps once again from the same paper, in another 2 years that could either say, "has not worked", "has worked out"?
Bah!. If anyone wants to make case for these funds not being appropriate then they can make it. Trump or no trump. Or may be I'm being unrealistic. Any "observation" passes for page-filler news. Not sure why I'm expecting something more from WSJ. A wise man once said "don't expect anything and you will not be disappointed". That might even have been me. Now, that's news!

Note the blurring of hedge funds and mutual funds. The word "funds" is used indiscriminately. Hedge funds are the ones that charge a percent (typically 20%) of the gain and give back nothing for a loss, with a high water mark.
In contrast, mutual funds are allowed to have symmetric performance-based fees, which is all he's proposing. They're often called fulcrum fees. A really nice, very detailed (legal/accounting) six page writeup for wonks can be found here.
So this is nothing new. Fidelity has lots of funds with performance based fee adjustments, though the size of those adjustments is minuscule.
Further, looking at Adams' "paper" (a two page pdf), one sees the statement: "Sharpe demonstrated many years ago, using basic arithmetic, that investment management is a zero-sum game: half of all actively managed dollars must outperform and half must underperform, gross of fees"
That's just plain wrong. The mean average return of actively managed dollars must match market performance (before fees). You could have lots of dollars winning a little (relative to the market), and a few dollars losing a lot. It is possible for most dollars to outperform.
I consider suspect a paper that would include such a basic arithmetic misunderstanding.
Here's Sharpe's brief paper. It's a (relatively) easy read for those arithmetically inclined.
https://web.stanford.edu/~wfsharpe/art/active/active.htm

FYI:
Regards,
Ted
December 15, 2016
Preview Clip:

Dear WEALTHTRACK Subscriber,
The U.S. has been the place to be for investors this year, even more so after the election of Donald Trump as President. Since November 8th, U.S. stock markets have been on a tear, reaching new records and extending their lead over international markets by a substantial margin.
As a recent Wall Street Journal headline put it: “The global dominance of U.S. stocks has been boosted by the post-election rally”, as well as the strength of the U.S. dollar, which has also been appreciating rapidly against other currencies. It hit a 14 year high Thursday against a basket of currencies. The market capitalization of U.S. stocks reached over $25 trillion in December, comprising more than 40% of the world’s stock market value, levels not seen since 2006.
No other country comes even close. Despite rapid gains in China’s stock market size and value, it still has less than a 10% share of global market value.
With low unemployment, corporate profits expected to pick up and stimulus anticipated from infrastructure spending, corporate tax cuts and regulatory roll backs more investors are jumping on the bullish bandwagon. Even the Federal Reserve acknowledges that economic conditions have improved significantly enough to allow it to boost interest rates this week, for only the second time in a decade. The way things are going, Fed Chairwoman Janet Yellen expects to raise interest rates another three times next year, in 25 basis points, or a quarter of a percentage point increments.
Improving conditions and this positive outlook are why the message from this week’s guest is such a stunner.
In a WEALTHTRACK exclusive, Wall Street’s top ranked investment strategist is saying it’s time to put on the brakes and get much more defensive!
He is François Trahan, Co-Founder, Partner and head of the Portfolio Strategy team at Cornerstone Macro, an independent macro research, policy and strategy firm he and his partners launched in 2013.
Trahan was recently inducted into the All-America Research Team Hall of Fame by Institutional Investor magazine, having been ranked the number one portfolio strategist for 10 of the past 11 years by institutional investors.
Up until recently Trahan was correctly bullish on the US stock market, as he has been for well over a year.
No more. He is adamantly telling clients that this rally should be sold. He will explain what has changed.
If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now. We also have an EXTRA interview with Trahan about what he describes as investing’s great mystery. Intrigued?
Plus, WEALTHTRACK is available on a YouTube Channel. So if you are unable to join us for the show on television, you can watch it on our website, WealthTrack.com, or by subscribing to our YouTube Channel.
Thanks for watching! Have a great weekend and make the week ahead a profitable and a productive one.
Best regards,
Consuelo

Roy, great to hear from you ! Thanks for all of your contributions over the years with FundAlarm. Please stay healthy and safe, with an overabundance of happiness !
Kevin

Glad to hear you are well Roy! Has it been more than ten years already? Merry Christmas.