Comparing TGBAX to Barclays Agg makes no sense to me. We use the Citi World Govt Bond Index as a benchmark, and it stacks up well. Under-performs for 1 and 3 year (mostly because of last 12 months), beats 5 years and wallops 10 years. We have captured gains that have accumulated for the last 10 years in client accounts, but continue to hold the fund. We are not blind to its very recent stumbles, however, and are watching and staying in touch with our Templeton connection. Honestly we like smaller funds better, and there was a tone of hot money that came in since 2010. Some of that has left (moving on to the now-hot sector), which is fine by us.

If not a Frontier fund, she can still join their EM fund, right?
It is a bit underwhelming fund so far based on its performance, and probably needs a good hand, though I am not sure how much she can help.

Sure that would work and if her path is to GP it would make more sense because they haven't registered any new funds that you might think would happen if she was going to run a Frontier fund.
I'm not sure I'd agree with "underwhelming" for GPEOX so far. The history is short so I don't think it means much in the bigger picture, but it's beating its primary and secondary benchmarks since inception and with the exception of YTD 2016 it has also beaten both of the benchmarks each year by a pretty wide margin.
I think the confusion comes because M* lumps all diversified emerging markets funds together but the reality of the last few years has been that larger cap funds have done far better than smaller cap funds. If you look just at the emerging markets funds M* says are true small cap funds, of which there are very few, GPEOX is winning each year pretty easily. Even if you include mid-cap funds, of which there are more to compare, GPEOX is winning each year against most of those too. There's no question they've been in a tough place to play for a while now but in my mind they're doing really well against those they're competing with directly.
They have 2.5 years under their belt so far and it'll be more interesting to talk about their performance after at least 5 years but if the goal is to be exposed to true small cap emerging markets, which mine certainly was, then I think this has been a good choice so far even with the high expense ratio.

Has anyone heard anything about where she's going? Any chance the guys at GP were able to pluck her from their former employer?

That's funny! A few years ago I wrote to them and asked if they would consider a frontier markets fund and the response was that they didn't have any plans along those lines but they certainly didn't rule it out either. In some respects I think she'd be a reasonably good fit for GP's culture but I'd also prefer if they stuck to the originally stated plan, kept their AUM small and focused on being great at what they're doing. Nonetheless I'd buy a frontier markets fund from them in a heartbeat if that's what's going on.

Posted yesterday 7 June, please find all MFO ratings and fund metrics updated on MFO Premium site through month ending May.
I continue to marvel at results of Fund Family Scorecard. How do poor performing fund management companies persist? Could be that absolute return is not a concern, that it's all about risk adjusted return. Could be that some of the funds did well initially, then went south but investors are too stuck to change. Could be that these firms just have strong marketing and, my friend Ed offers, "write good newsletters." Could be that they are just having a run of bad luck and stuck in an uncooperative and "irrational" market ... but given enough time and a return to sanity, the Great Pumpkin will appear.
There are 30 fund families that have failed to beat their peers with every fund they manage ... 135 funds (oldest share class only) that underperform against their category averages on an absolute return basis since inception, measured from first full month of offering through May 2016.
Three of these families each manage assets of $1B or more ... Dunham, Hussman, and Domini.

Dunham & Associates Investment Counsel, Inc. is a San Diego based firm with a line-up of of 16 funds that "...operate on performance-based advisory fees, also commonly known as Fulcrum Fees, and feature objectives ranging from capital preservation to aggressive growth." Average age 9 years. Average annual expense ratio 1.90% (all share classes). These 16 funds have nearly $1B in assets under management (AUM). None of the 16 have beaten their category averages. How can that be ... ? One clue: 1.9% across 9 years represents a drag of 18%.

Another is Hussman Strategic Advisors Inc. Four funds. $1.1B AUM. I suspect in this case, Dr. Hussman would argue it's about risk adjusted return: "Investing for long-term returns while managing risk". Certainly that appears to be the case with its Strategic Total Return Fund (HSTRX), but what about the other three funds? Like, its flagship Strategic Growth Fund (HSGFX) ... it has been underwater for 92 months now and counting.
Here are some risk profile metrics for HSGFX since inception and across various time frames, including the last two business cycles ... something appears to have gone terribly wrong this cycle.


Finally, at $1.7B AUM ... "Invest in a greener, more peaceful future with Domini Social Investments." Three funds. Average age nearly 17 years.

Its front-loaded, 9-year-old International Social Equity A (DOMAX) has done pretty well the past three and five years, so Amy Domini is quick to post its five star status on her web site ...

Here's a closer look ...


As always, if you see anything amiss with this month's update or have recommendations for improvements, please do not hesitate to email us.

I am making some LC (domestic) changes in one of my kids' retirement accounts. I have finally given up on the Yackts after many years of significant underperformance, and am also going to sell a large percentage of her FLVCX. She has held both for some time. Account is with Fido, so am considering adding to her PRBLX and also buying DVY and maybe some HDV. Thoughts, general or specific? She has good amounts in good small and mid funds, plus some (disappointing) foreign.

Fun with numbers. NCHRX, another misclassified California muni junk bond fund, shows numbers just like VWAHX, and for the same reason - it's been tossed in with investment grade funds for comparison.
           VWAHX           NCHRX
1Mo.: 1 percentile   1 percentile
3Mo.: 1 percentile   1 percentile
YTD:  2 percentile   1 percentile
1 Yr.:  3 percentile   1 percentile
3Yr.:   5 percentile   1 percentile
5Yr.:   4 percentile   1 percentile
10Yr.: 1 percentile   5 percentile
15Yr.: 1 percentile
Also like VWAHX, it has had some lousy years (relative to its "peer" funds, not junk funds), bottoming out at 95th percentile in both 2007 and 2008, with a third bottom quintile performance in 2013, same as VWAHX.

MMHAX and PYMDX look less risky than NHMAX because they are of shorter duration (8.6 and 7.0 years vs. 10.1 years).

PYMDX is also somewhat higher up the credit quality chain, according to the literature and from the percentages by rating I got from Pimco a few months ago. Pimco doesn't publish credit quality figures for oef's, but the CSRs will give them out over the phone if you call.
NHMAX uses inverse floaters, sometimes pretty significantly, apparently selectively. See for example p. 4 of the Q1 commentary (PDF available here).

MMHAX and PYMDX look less risky than NHMAX because they are of shorter duration (8.6 and 7.0 years vs. 10.1 years). Neither existed in 2008 (though the institutional share class PHMIX did), which also tends to make them look better.
In the case of PHMIX, even though it existed in 2008, M* does not incorporate that data into its calcuations, because M* generally bases its combined figures on 3, 5, and 10 year figures. PHMIX has not existed for 10 years, so only its 3 and 5 year data are included (conveniently skipping 2008 for now).
The best one can do with these funds is look at 2013, the next worst year, to get some sense of risk. Again, I suggest looking at BCHYX. You'll see that these other funds fell over 5% (just a shade less than the category average), while BCHYX fell 3.17% and VWAHX was nearly a perfect match falling 3.22% for that year.
For completeness, NHMAX fell 4.69%, an impressive one year performance for a fund that on paper has more risk.

MAPOX & PRWCX = 51.7% of portf. (Both are balanced funds)
DLFNX = 2.5%
PRSNX = 11%
PREMX = 14.3%
(Not the entire portfolio.)
***************************************
M* X-RAY shows
10% Cash
43% US stocks
8% foreign stocks
37% bonds of all sorts.
.....EM bonds are flying high.
"World bonds" pretty alright, too.
I won't be adding. What I will be adding to is a utility stock, to build quarterly divs. for current income in a taxable account. I have 8.5 years before RMDs kick-in on the IRA.

@ Mark: Actually, I went to a memorial service for a friend I've known for over seventy years, and the best man at my wedding. But, thanks for asking !
Regards,
Ted

@MJG & Roy - Gentlemen, I couldn't agree more. For years and years I chased around reading all the pundits/guru's/hot hands writings and recommendations trying to diversify and be in the right place at the right time when all I really had to do was select a handful of decent options at the start and then keep my hands off. Infinitely more financially rewarding with the bonus of plenty of time for other stuff like a life.

10 years ago I decided to simplify, for several reasons, by moving our investments from a handful of mutual fund companies and 10 mutual funds to 1 mutual fund company and largely 1 fund, a moderate allocation fund (PRWCX). Very simple and easy to manage.
After about six years I found myself thinking that maybe it would be wise to be better diversified than basically being all-in on one fund, so I transferred all our investments to an online brokerage account to gain easier access to other fund families and funds.
Today, I find myself slowly moving an increased percentage of assets back towards PRWCX as finding other MA funds or a combination of other funds to form a MA that comes anywhere near the performance of this singular, diversified fund difficult...including combinations of index funds.
Our online brokerage account rep is trying to convince me to hand over at least a portion of our portfolio to him which would be invested in ETF's...and many of them. Past performance of these ETF portfolios with similar equity/bond ratio does not warrant it. Also, I can't help but feel that it would be just as good to be invested in a couple index funds rather than an array of 18 or more ETF's...only justification for that many funds seems to be to justify their management fees!

@varmint &MFO Members: Varmint is correct that time is on you side, and VWAHX has a excellent long-term record. VWAHX is ranked #3 in the Muni High-Yield Bond Fund category by U.S. News & World Report.
Regards,
Ted
http://money.usnews.com/funds/mutual-funds/muni-national-interm/vanguard-high-yield-tax-exempt-fund/vwahx

That's a ranking of investment grade bonds, not high yield bonds.
This just goes to show that over the long term, if one rides out the ups and downs, junk bonds seem to do marginally better than investment grade bonds, commensurate with their higher risk.
VWAHX, with its lower risk than typical junk, would be expected to return less over the long term than typical junk bonds. Yet it did outperform the HY average over 15 years. That is because of its 2008/2009 performance (and because of its much lower expenses). Like other investment grade bonds, it fared much better in 2008 than junk. So much so that its underperformance in 2009 (relative to junk) didn't wipe out this sizeable one-time advantage.
But some good, inexpensive junk bond funds still outperformed cumulatively, even going back past 2008. BCHYX outperformed VWAHX over every time frame (though not on an individual year basis) - YTD, 1 week, 1 mo, 3 mo, 1, 3, 5, 10, 15 years. (Go to this M* page, and input BCHYX to compare.)
VWAHX straddles junk and investment grade. That's why it makes such a good entry into junk. M* calls it "conservative, and so much so, that it places in the muni-national intermediate-term category". Comparing it with either junk or investment grade, without adjusting for its distinctive mix of quality grades, can lead to wrong inferences.

I have held Vanguard Hi Yield Municipal Bond Fund for about 20 years, through ups an downs, very happy, no plans to mess with it. You get the rock bottom expenses and don't have to worry about it blowing up because a manager decided to make a big bet on a security or the market and messed up. I hold funds for long periods of time, don't hold that many, have a large dollar portfolio. Time is on your side in the market and I have the returns to prove it.

The three funds are all BB rated by M*, with the longest duration fund (NHMAX, 10 years) having a disasterous 2008 and a spectacular 2009, not surprisingly. BCHYX's duration is in the middle (7.8 years) with 1, 3, and 10 year performance in the

NHMAX also has a 4% front load!

Did I read you right, that you want to use muni bonds in IRAs? Some custodians won't even allow this. For example, Fidelity does, but not online:
"The security you are attempting to trade is a tax-free mutual fund. Retirement accounts are prevented from buying or exchanging into tax-free mutual funds through the electronic channels. "
That said, given your last comment ("MUB might be the way for lowest risk"), I would also ask what you are looking for in terms of risk/reward. If you're even comparing MUB with junk bond funds, then it may be that you're not comfortable enough with junk. I find that over the long term the volatility doesn't matter (to me), but each person has his own comfort levels and objectives.
Bonds (and bond funds) are at one level pretty simple vehicles. As quality goes down, risk and reward go up. (If one wants to minimize this type of risk, one can stick with investment grade funds). As duration goes up, risk and reward go up.
Quality and duration, along with cost, are the three main levers. These levers determine the vast majority of a vanilla fund's performance. You pick the risk level and source of risk you want and then go fund a low cost fund matching that. Sure issue selection matters, especially with junk, but broad diversification can paper over a lot of problems there.
To make things interesting, let me toss in another fund - one that isn't classified as high yield - BCHYX. It's a single state junk bond fund. But given that the state's California, (with an economy approaching the size of the UK's), you still get a fair amount of diversification. Also, the fund fits midway between your two other funds.
The three funds are all BB rated by M*, with the longest duration fund (NHMAX, 10 years) having a disasterous 2008 and a spectacular 2009, not surprisingly. BCHYX's duration is in the middle (7.8 years) with 1, 3, and 10 year performance in the middle. DVHIX with its shorter duration (6 years) tends to give a smoother and more muted performance. All of these are still much longer than MUB's 4.7 years, if you're focused on minimizing interest rate risk.
I have a hard time with bond funds, especially munis, that have ERs over 0.50%. High ER and long duration would be my concerns with NHMAX. For an index fund, one hopes to do better on cost, but HYMB barely beats this target with 0.45% ER. Nevertheless it gets you higher quality bonds (BBB), albeit still with a somewhat long duration (8.2 years).
HYD does better on cost (0.35%), but still at the longer end of duration (8.7 years), and appears to have the lowest quality portfolio (eyeballing its fact sheet).
If you really want junk and also want to dial down risk, look for funds with BB or better credit and shorter durations. The obvious choice if you want to have a "high yield" muni fund with training wheels (that's not a pejorative, just a colorful description) is VWAHX/VWALX.

Hi Guys,
Comparing women’s skills and contributions against men’s skills and contributions in any competitive industry is always entering controversial and dangerous waters.
Simple explanations are easy, but are often wrong. Complex explanations likely improve the odds of a meaningful answer. On the top of that decision pyramid, informed simple solutions are most likely to provide the best odds and the why insights. Here is my attempt at an informed simple explanation.
Women are an underrepresented population in the financial advisory industry because of 3 interactive reasons: (1) they lacked motivation and opportunity in the past, (2) they lacked the requisite education, and (3) industry adjustment time lags.
This is an informed simple explanation based on a single set of curves that summarized women’s education participation and levels over the last 5 decades. Here is the Link to the data sets that I referenced:
http://www.russellsage.org/blog/rise-women-seven-charts-showing-womens-rapid-gains-educational-achievement
These data sets are quite revealing. Young women have historically done better in High School than young men. Yet, those with advanced degrees, that would make them attractive to the finance advisory industries, have only arrived in sufficient numbers in the last several decades.
The financial industries are tradition bound. They make tons of money with little capital investment, and are reluctant to change this profitable equation. But it is changing slowly, ever so slowly, as more and more women are entering the business, are demonstrating their dedication and skill sets, and are moving up the corporate ladders. Inertia is a powerful drag. It just takes time.
Today, women only compose roughly 10% of the financial wizards in the USA; in some European countries, that percentage approaches 20%. In 2 decades, I predict those percentages will increase to 50% worldwide. I don’t fear long range predictions because nobody worries, nobody cares, and nobody remembers anyway.
As an aside, I was not surprised that girls outscore boys at the High School level. That’s been a truism forever. But I was surprised by the increase in overall grades over the last 50 years. Are we getting smarter? My answer to that question is a sharp “No”. The timeframe is too short. My answer is that the grading system has become softer. That’s not an especially good motivator; a more demanding score keeper will provide stronger incentives.
What do you think? Your comments are encouraged.
Best Wishes.

Sometimes I think some high profile managers say things to draw attention to themselves to keep them in the spotlight. Is Bill Gross even relevant anymore?? We have been hearing for more than a few years now how low returns going forward will be the norm. That high profile manager from GMO (among others) was saying that back in 2010. As for the present, seems like small and mid cap biotech has been having a stealth rally. Maybe those closer to that area can confirm. SUPN anyone?

"Didn't gold basically go down about 75% from roughly 1980 to 2001?"
Peaked at $850 in 1980. Slid to around $350 in 1993. In dollar terms (non-inflation adjusted) that's a loss of around 60%. As rjb says, the inflation adjusted loss was much greater.
I bought a little just before the 80s peak and attempted to buy down on the frequent dips for three or four years after. A terrific first lesson in investing. One I won't forget.

FYI: The difference between short- and long-term yields in the $3.7 trillion municipal-bond market is the smallest in more than eight years.
Regards,
Ted
http://www.bloomberg.com/news/articles/2016-05-31/muni-bond-yield-curve-flattest-since-2008-credit-crisis-chart