Ya know, Charles adds some clarity with the data. Recent performance hasn't been so hotsy-totsy. Add to that the (reasonable) supposition that their huge Valeant holding is a dead man walking, do the math, and M* pretty much had to knock off some stars. A cautionary tale for those who believe that concentrated MFs and high active share numbers hold to the virtuous path, in and of themselves. When one goes with concentration anywhere inside the portfolio, I think it's important to mine a little deeper on the screening before making choices, and to look at other stats we rarely talk about on the Board: tracking error and information ratio.
[I think it was @MJG who made this point in a comment over a year ago]
Anyone know how those figures have moved for SEQUX, over the past 5 years?

Through the third quarter, the fund was rated five stars: overall, for five years, and ten years; though it was rated four stars for the past three years. Here's T. Rowe Price's summary page:
http://www3.troweprice.com/fb2/fbkweb/gateway/snapshot.do?ticker=SEQUX
As of today, the three year rating dropped to one star (a 3 star decrease), its five year rating dropped two notches to three stars, and even its ten year performance took a hit, losing a star - down to four stars.
With a three year risk rating of high, and a three year reward rating of low, you can't get more solidly one star.

I certainly don't think they're being overpaid for what they're doing, but the question is whether they can overcome a 2% drag to deliver results that make it worth investing in global micro cap stocks. I believe they can and I'll be happy that I invested, but 2% is a pretty big hole to climb out of year after year so it'll have to be evaluated after a few years when we get a sense of what they're able to deliver.

Interesting to think that Oil companies started preparing for this 40 years ago.
Exxon Predicted the Present Cheap Solar Boom Back in the 1980s
"The oil giant's 25-year-old research into the economics of solar was spot-on."
I recall years ago Exxon Mobil buying the patent rights to integrated solar roof shingle technology (not panels that are mounted on the roof, but are integrated into the shingle).
bloomberg.com/news/articles/2015-11-04/exxon-predicted-today-s-cheap-solar-boom-back-in-the-1980s
Article on Integrated Photovoltaics:
nytimes.com/2009/09/27/business/27novel.html?_r=0

"So far, about three-quarters of the S&P 500 have reported results, with profits down 3.1 percent on a share-weighted basis, data compiled by Bloomberg shows. This would be the biggest quarterly drop in earnings since the third quarter 2009, and the second straight quarter of profit declines. Earnings growth turned negative for the first time in six years in the second quarter this year."
The trend is your friend? Ummm, which one would that be? Eni Meeni Miney Mo.

Ted, Just wanted to say how great it is to see you back posting.
Regarding forecasts for the S&P - I haven't a clue where it will be in one year or in five years.
But I don't think the world will end anytime soon.
Regards

Many other posts have compared ZEOIX to RPHYX. Now, comparing SSTHX and RPHYX for the past three years, we have the typical $10000 at $10,733 for RHYPX, and $10,663 for SSTHX, pretty much a dead heat. In this year's difficult market though, it's 0.76% return for RPHYX, and -1.30% for SSTHX, about a 2% difference in favor of RPHYX. While I'm certainly less than thrilled at the deterioration in the RPHYX NAV, it would still seem to be a better place than SSHTX at least for now.
Looking at ZEOIX, it's doing quite well this year, at a 2.58% return, and with $10,966 for three years. Unfortunately, it's not available NTF at Schwab, as Press notes. Guess I'll have to stick with RPHYX for a while.

I want to decide where I am going to expend my energy
Fund A
Assets: $100B
ER reported: 0.5%
Avg Annual Return: 10%
Fund B
Assets: $1B
ER reported: 1.5%
Avg Annual Return: 10%
Returns are always after expenses. I care about who makes how much money why now? I make 10% in each fund. If either fund is misrepresenting expenses and investors would have ended up with higher return, then all crusaders can go complain to justice department.
25 years back, when information was not forthcoming may be this makes some sense. In today's time with the internet, every fund investor knows all things remaining the same, go with the lower ER fund. If you are going with higher ER fund, do it for a reason - lower asset base, better fiduciary management, etc. etc. "Investors need to know how fund expenses are being paid and who they are being paid to". No, they don't. Why? Because they cannot do diddly squat about it.
I would like Jack Bogle to give interview to someone else besides M*. Or I would like him to ask Christine Benz WTF one ANALyst or another at M* marries American Funds every other week. All well wishers of fund investors, please stop telling investors what they should do and go tell/appeal to those who make money off those investors.

If the last thirty years are any indicator of future trends in Healthcare, maybe a 90/10 portfolio of VGHCX / VFISX vs Warren's VFINX / VFISX: (click on each image for better clarity)

@VintageFreak As the author of the article, I obviously disagree. But I wonder if you read it in its entirety. I think there are two good reasons why total dollars in fees matter. One is this question of economies of scale, which has huge legal ramifications. The perspective that a fund with $128 billion that is collecting $903 million in fees a year has "low" expenses because its expense ratio is 0.83% of assets seems misguided to me. It is relevant to these law suits filed by employees of 401k plans arguing fees are too high. Simply examining the expense ratio leads regulators and judges to say fees are fair when anyone looking at the massive asset growth and thus total dollars in fees the industry has experienced in the last twenty years would realize that economies of scale are not adequately being realized. If a pension plan with $128 billion hired a money manager to run its portfolio directly and not via the mutual fund route, there is no way it would be paying 0.83% for that service. Yes, there are ancillary costs such as shareholder services and broker placements, but these still are not enough to counteract the basic fact that for fund companies opening a new fund is essentially like opening a toll booth. Once you've built the booth and hired the clerk to man it the profits just grow and grow no matter how many people drive through.
The second reason is actually more relevant to MFO readers. These giant funds suffer other costs not recognized by the expense ratio, namely market impact costs that makes it more expensive to trade illiquid securities. Asset growth also makes it more difficult to have a high active share ratio as fund portfolios become more index like as assets grow. The comparison in the story is highly relevant as the JOHCM International Select Fund is run by a small boutique shop that closed the fund to new investors at around the $3 billion mark. As such, it faces much less of the market impact cost and closet-indexing problems of a much larger $128 billion fund. It also happens that it is collecting much less in total dollars of fees as a result. Yet because everyone is looking at expense ratios instead of total dollars in fees it gets penalized for having a higher expense ratio by Morningstar and investors. That seems unfair to me. It also happens that JOHCM International Select is a fund David has reviewed for MFO. So I think the story is relevant here.
I don't necessarily disagree with you about load funds and the high front-end commissions, but that is another story entirely--not the one I wrote in this case.

Sorry, but I don't understand.
I totally get one should look at how much the fund company is raking in. That's why one needs to observe if ER is going down when assets are going up or not. One also has to look at the management fee portion of the total ER since some fund strategies are costly to implement and one must weigh that before purchasing any actively managed fund.
What I don't get is the comment about whether it needs really $1B to run a $128B. Of course not. Since when has it been about that? The larger the fund asset base, the larger the management fee as a percentage. A fund manager is successful when he generates more revenue for his fund company. Are we going to pretend it is anything else? If the asset size of fund grew more because of appreciation and less because of asset accumulation, then didn't the investors think it is worth it. You pay more for an iPhone than other phones right?
VFINX ER is 0.15 (or whatever it is does not matter). What if the assets of VFINX were 10th of its current size. Are we going to ANALize how much it is going to cost to run this fund based on its asset size now? Someone of Bogle's standing IMHO should do more about railing against investors. Tell them to vote with their feet and SELL funds with $128B in assets who are raking in $1B in fees. Or is he suggesting capping fund expenses beyond a certain asset size of a fund? That would be a fantastic regulation. I
Finally, anyone who buys a load fund needs to have their head examined. If it is because they are working with an advisor, then as I have said many times we need to put that occupation out of business. I want Bogle to write articles about advisors who are selling loaded funds with 5.75% loss upfront. I want him to rail about M* doing analysis about how American funds (who can do no wrong) are cheap because even if most people pay a load, over time they cost less because their ER is lower. I listen to Bogle when he rants about indexing vs active management. Indexing is what I use largely in my tax deferred plans. If I was saying same thing for 50 years, I would think it is quite enough and at age 85 take a chill pill.
BTW, Alan Greenspam. Please go away as well. No one needs to hear your expertise on how to (mis)manage the fed.
I'm sorry, but this "news" is only slightly less annoying than "who killed marilyn monroe" shows which TV channels show whenever nothing else interesting is happening in the world. Does anyone have an original idea to help investors?
End of rant.
PS. For the record, I do NOT want Mr Lewis Branham to go away. I DO WANT Greenspam and BogleMyMind to go away or comment on some other topic. Write a cookbook or something.

Don't know much about the tax angle, but VEIPX is one of the best V'rd LCap value funds in the last 5-10 years.

Good point. Even in what has been largely a "Growth" environment, this "Value" fund has done quite well. Might be a good candidate to DCA into.
Thanks for the heads up!

Don't know much about the tax angle, but VEIPX is one of the best V'rd LCap value funds in the last 5-10 years.

I likely wrote a bit too compressed.
The M* figures in the article are as of 9/30/2015. When one quotes YTD figures, one has to be clear on what the "date" is in "year to date". (The Nov 2 dateline of the article is the date the article was written, not necessarily the date of the data within the article.)
M* shows YTD (D = Nov 3) for PREMX of 3.14%. Likely rounding was done differently by Bloomberg; I'm not going try to figure out why the two figures differ by 0.01%. They're basically the same.
If you're looking at YTD performance that includes October and part of November, it would be nice to know what was in the portfolio that produced that performance. Unfortunately, funds report their portfolios with a 30 day lag (at least I think that's the delay), so the best you're going to get is a portfolio as of 9/30/15.
It seems to me that if that's the portfolio one is looking at, then one should also be looking at the performance that this particular portfolio achieved - that is, the returns through the same date, 9/30. Not that it makes a big difference. The portfolio is in constant flux, day by day and even minute by minute, so a snapshot still doesn't tell you what happened along the way to achieve the performance shown.
The raw data for holdings should be the same regardless of the source of you data. That is, Bloomberg, M*, the fund page, should all report exactly the same holdings for a fund on a given date.
But any analysis of the holdings (average credit rating, percent in cash, etc.) is going to vary from source to source. That's because while two sources (M*, fund page) may use the same names (e.g. percent in cash), their calculations may be different.
M* throws bonds with maturities under 1 year into the cash bucket. So if you have a portfolio that is filled entirely with bonds where half mature in six months and half mature in 10 years, M* will say that your portfolio is 50% cash, 50% bonds. My guess is that when M* analyzes the country exposure of the portfolio, it only looks at the 50% in long term bonds. And the country exposure of those bonds may be different than the country exposure of the short term bonds. So what's reported as country exposure might depend on whether you look at just the long bonds or all the bonds.
I haven't even gotten into derivatives, in part because I haven't tried thinking through how one might analyze them. Suffice to say that TGBAX plays enough games with currency exposure (it bears no relationship to the bond country exposure) that one should be able to come up with very different figures depending on how one treats derivatives.
Ideally, one should read up on how all of the numbers are calculated. (I've posted before about how M* computes average credit quality in a way that gives a lot more weight to lower graded bonds.)
If one doesn't fully understand what the numbers mean (I certainly don't), the next best thing is to stick with one source (M*, Bloomberg, some other aggregator). That way, any summary figure (e.g. average credit quality) is computed the same way for each of the funds one is comparing. M* will compute credit the same way for PREMX as for VTBIX.

I would continue to hold and add to these funds. Go play golf and come back in thirty years.
For those less lucky, here's some tips on how to access closed funds:
investorplace.com/how-to-invest/funds/mutual-funds/closed/
Also,
Closing Mutual Funds: Investment Protection Or Trap?
"When your fund or prospective fund is closing, knowing the positive and negative implications of the closure is important for deciding what to do, especially because you'll usually have a short period of time to act. Determining whether the fund is already damaged or whether it's maintaining its strategy, and therefore saving itself from compromising its goals, should be key when you're evaluating a fund's closure. Remember to direct your investments or they will direct you."
investopedia.com/articles/mutualfund/03/080603.asp

I own another microcap fund from a fund company that also flies a bit under the radar, Buffalo Fund's Emerging Opportunities Fund (BUFOX). The fund has 53 holdings with a recent concentration in Technology. It's off its high by 20%, but boosts a 5 yr avg return of over 15%. The reality is that this fund experienced a MAXDD of 48% and it took 6 years to dig out of that hole. These funds are not for the faint of heart and in my opinion require an entry and exit strategy. These funds move in cycles so attempt to buy the lows.

Love seeing these old "ST" tickers from the old Strong Funds where I once invested. Wells inherited these from Dick Strong when he was banned from the securities business by the SEC. Bought up what was left of his firm and kept the old fund names for awhile. The "Advantage" label came from Strong too. But I can only recall it applying to their Ultra-Short bond fund.
While he was a crook, Strong actually had some pretty good funds and some talented managers. 15 years have passed. Possibly Wells is trying to distance themselves from the origin of some of these.
Memories :)

Depends on how this may fit into your larger investment strategy for college savings, as these two funds are quite different. But in terms of an "all-in-one" solution I would go with GLRBX. The fund has a healthy slice of stocks--50% currently--to add some return. SDGIX is a bond fund, and frankly I wouldn't expect much from a bond fund over the next 3-5 years. While a loss of principal is always possible over a time frame as short as 3 years, I'd say the odds are much higher for that occurring in a global bond fund (even a good one like SDGIX) than a conservative allocation fund with stock exposure.

FYI: ( Click On Article Title At Top Of Google Search)
It has taken index fund evangelist John Bogle 40 years to get the mutual fund industry to be comfortable talking about fees. Everyone now agrees that they matter. But there’s another way Bogle likes to look at fees that no one’s talking about. Instead of just comparing funds’ expense ratios, as is standard practice, he thinks investors should also examine the total dollars that each fund collects in fees.
There are two reasons why calculating total-dollar fees matters. One is legal. “The Gartenberg court decision in 1982 determined that a mutual fund fee has to be so large as to offend the conscience of the community before the courts will intervene,” Bogle says. “A percentage fee can never offend anyone’s conscience. What does one say about a fee that should be 0.5% but is 0.75% instead?”
Regards,
Ted
https://www.google.com/#q=Mutual+Fund+Fees:+How+Low+Is+“Low”?+barron's

Crowdfunding for everyone. Pretty exciting, thinks wired.com. So now you and grandma can invest in startups.
http://fortune.com/2015/10/30/its-official-startups-can-soon-raise-money-from-your-grandma/
There will be some income limitations, and platforms set up by issuers to handle the investment can be held legally liable for issuer fraud against investors. Beyond that, however, not all issuers will be required to undergo and disclose an audited financial review, and I suspect you'll be on your own.
http://www.howardlindzon.com/crowdability-the-sec-approves-equity-crowdfunding/
"The media will tell you your Grandma is about to get gutted by hucksters.
She might.
But she was also getting pitched 3D printing stocks and the safety oil income trusts a few years back by her ‘registered’ financial advisor."
@bnath001 Are you a rational person? If so, then Jeffrey Carter believes in you, because he's "a huge fan of individual liberty." He'd tell you to go for it--- the Full Monty! :)
http://pointsandfigures.com/2015/11/01/sec-approves-crowdfunding-for-everyone/