I may not have been sufficiently clear. Many funds offered in VAs are not designed (from a legal perspective) to be offered for sale as securities. Even if they are structured that way, they are rarely offered for sale outside of an insurance policy. The two funds I wrote about are generally not sold outside of insurance policies.
This has nothing to do with tax efficiency. Though with a tax cost ratio over the past five years of 1.5% and nearly 3% in the past year, I might have second thoughts about keeping this fund in a taxable account. To put those figures in perspective, DBLTX's tax cost ratios over the same periods are 2.3% (five year) and 1.8% (one year) - that's for a pure bond, ordinary income fund.
The Voya fund prospectus reads: "Shares of the Portfolio are not offered directly to the public. Purchase and sale of shares may be made only by separate accounts of insurance companies serving as investment options under Variable Contracts or by Qualified Plans, custodian accounts, and certain investment advisers and their affiliates, other investment companies, or permitted investors.
The AZL fund prospectus states likewise: "Shares of each Fund are sold exclusively to certain insurance companies in connection with particular variable annuity contracts and/or variable life insurance policies (each a “Contract” and collectively the “Contracts”) they issue.

@mcmarasco
"Does anyone know anything about the Voya versions (virtual clones) of PRWCX (ITRAX / ITRIX / ITCSX / ITCTX)? They are open according to M*, but can the average investor purchase them???"
According to test trades I just made, these clones are not available at WellsTrade, Fidelity, TDAmeritrade, Scottrade and Firstrade. I still think that the most attractive option is to get a friend or acquaintance of yours to gift you a share between taxable accounts at a given brokerage.
Kevin

This is a fund designed for tax advantaged accounts. One finds it in individual variable annuities, college 403(b) plans, etc. So the question is: how desperate are you to purchase a PRWCX clone?
You can purchase the ADV class (ITRAX, 1.24% ER) through a Voya Preferred Advantage VA. The annuity itself adds another 0.60% fee. IMHO, that's too high a total cost - the 0.60% annuity fee is about the same as Schwab's, but you're paying up for the fund (it's tacking on a 0.75% 12b-1 fee).
On the plus side, the annuity has no withdrawal fees, the min for the whole VA (all investments) is $5K, and the annual maintenance fee is waived with a relatively low $15K balance. Also, the contract is relatively straightfoward - 50 pages plus fund descriptions, which may sound like a lot, but most of this is required to describe a basic annuity; no bells or whistles.)
Another option is to invest in AZL T. Rowe Price Capital Appreciation. A combined (print) page with all the M* info is here (scroll past the nonexistent analyst report for the rest of the info).
You can purchase this inside the Allianz Retirement Pro® VA. This is a low cost VA, rated one of the top 10 traditional VAs by Barron's a couple of years ago, along with Vanguard/Monumental Life), Fidelity, TIAA-CREF (see embedded graphic) - Top 50 Annuities, May 27, 2013.
The VA costs 0.30% (Base Account, not the Income Advantage Account, which is a more restrictive and costly GLWB rider). The Class 2 shares of the PRWCX clone have an ER of 1.05%, for a combined cost of 1.35%, 1/2% below the ING offering, but still not cheap.
This annuity requires a min of $75K (across all investments), and charges an annual maintenance fee unless the balance is above $100K.
I don't suggest investing in these clones, but since the question was raised about how the average investor purchases them, there you have it. It is possible that other retail annuities offer these clones, though I am doubtful, because these seem to be proprietary clones offered through proprietary VAs (e.g. Voya clone offered through Voya VA).

@mcmarasco,
Since my holdings are all with American Century, my suggestions would be narrowly focused. I hold ASDVX for the short duration unconstrained bond. AMJVX is their multi-asset income fund and ALNNX is their alternative income fund which I use as a complement to AMJVX.
For short duration, I like the template my fund has. < 2 years duration. Unconstrained gives the fund management more leeway as where to go.
For income funds, I also favor the anywhere style of unconstrained and multi-asset. The markets of today are complicated with various types of investments. As I mentioned above, I use ALNNX as a complement. There are some duplicate strategies between both funds but ALNNX includes hedging and other strategies. The way it performed in this past downturn was impressive, but that is also just one event. With the bond markets as they are investors have to change their thinking somewhat as being in longer term bonds during a period of rising rates will surely be counterproductive.
These strategies are relatively new and M* doesn't classify them properly. Running some Google or Bing searches may provide more answers.
Edit: BlackRock has a decent offering in the multi-asset income sphere. BAICX.
http://www.blackrock.com/investing/products/227565/blackrock-multi-asset-income-inst-class-fund

I want to thank each of you very much for your detailed and thoughtful comments. I'm always impressed reading about the strategies that each of you employ. I've got a lot to learn. Thanks in particular to Scott, Press,and Old Skeet for the discussion of specific ideas and links. Gives me some great weekend reading for strategy development!
Scott, I'm quite intrigued by your discussion of real estate investments. You clearly know this area well. If I'm somewhat limited in the amount of capital currently available I'm wondering if it might be better to with a REIT fund vs. individual names. Are there specific funds that you like a great deal in this area? If not, I can do some research on the names that you list above and perhaps just buy small positions across a few stocks. I'm also reading up on Ecolab based on your earlier posts. That also looks quite interesting. thanks so much again everyone!
Good article on dividend payers in Morningstar today -- http://www.morningstar.com/cover/videocenter.aspx?id=712994

Thanks!
I think my issue - and I emphasize that this is a me thing - is that I don't want a lot of retail and I don't want apartments. The latter is more an instance of "at this time" and the former is more of a long-term view. I've thought for a long time that - in terms of retail - the highest quality and most innovative operators will succeed. I also have no interest in hotel REITs.
I think "dime-a-dozen" mall operators will struggle or go. DDR - which was obliterated in 2008 and is still nowhere remotely near its pre-2008 levels - is an example of what I don't want. Simon Property took its strip malls and spun them off into a different company. We are overbuilt on retail in this country and one of the reasons (among many) that I've never really been enamored with the Sears bull thesis.
"Consider this: The number of enclosed shopping malls with a vacancy rate at or above 40% – the point at which malls typically enter their death throes – has more than tripled since 2006. Nearly 15% of all enclosed malls are suffering from a vacancy rate between 10% and 40%, according to Green Street Advisors" (http://www.wallstreetdaily.com/2015/03/11/mall-reit-simon-property-group/)
I like Tanger Outlets (SKT) due to management and due to the fact that people like the high-end outlet concept. Go to one of these high-end outlet malls on a weekend and they're jammed. Go to one of them on a particularly busy period (when people are doing back to school shopping or Christmas shopping) and they're a mob scene. At least that I've seen.
General Growth (which I have exposure to via Brookfield Property) and Simon (SPG) are fine, with the latter also having a significant portfolio of premium outlets. So, I'm not a fan of malls. I do think that some large, quality operators will innovate and continue to succeed, but I really, really don't want much exposure to malls and I don't want strip malls/dime-a-dozen malls.
Retail Opportunity (ROIC), which I mentioned above, is somewhat different from the fact that it is retail, but with need-based anchors (drug stores and grocery stores), which I think gives that some level of defensiveness.
I think apartments in major cities are a compelling investment with high barriers to entry and people have to live somewhere. That said, I don't feel comfortable investing in apartment REITs with apartment rents at absolute record highs that don't feel terribly sustainable over the long-term. I like things like Equity Residential (EQR), but I have no interest in them at these levels. Again, longer-term I think quality apartments in major cities are great, but they'd need to come down quite a bit to get to an interesting entry point.
I don't own it, but I'm slightly interested in things like Lamar Advertising (LAMR), a REIT that is basically outdoor/indoor advertising spaces. I do think that with the rise of mobile phones, people who are waiting at the airport and elsewhere will have an increasingly larger level of interactivity with advertisements on a daily basis. Their website is pretty ridiculous, you can literally see every advertising space they own. I'm not looking to add to much of anything right now, but I may explore this further. There are only a few major billboard companies and those few enjoy the majority of market share. Also, regulations may limit new competition. This wasn't a REIT until a year or two ago. The real big problem here in the short-to-mid term is that it is at its core .... advertising. In a 2008 situation, this will get obliterated. Longer-term I do think outdoor advertising may become a more and more compelling space as there is more and more interactivity due to smartphones - someone's sitting at an airport and they can scan a cereal poster with their phone for a coupon and when they use their mobile wallet to buy the cereal the coupon will already be there. We're not there yet, but I think it's an eventuality.
Not a fan of hotel REITs not because, I mean, look at 2008. Many of these companies bought right into the top and not only were the shares rocked, many either cut or eliminated dividends, with some not bringing dividends back for years after - see Strategic Hotels and Resorts - while that is now entertaining a possible sale, it was $23 in 2007 and $1 by 2008 and never reinstated its dividend. Are hotels in major cities interesting in terms of barriers to entry? In theory, but geez, these are economically super-sensitive.
I like high quality office space in major metropolitan areas. Brookfield (BPY, or BAM if you want to go with the parent if you don't want to deal with a partnership) is an example. Vornado is a great example, but I think a lot of REITs ran up to a silly degree earlier this year because of a hunt for yield. Vornado's move towards $120 was way overdone and $78-82 is more fair value.
As with healthcare in general, I think healthcare REITs will continue to do well and a number of names have been unfairly taken lower. I like Ventas (VTR), but HCP, HCN and Omega Healthcare are other options. I like Industrial/warehouse, although I don't think there's tons of names that grab my interest.
Triple Nets (WPC, O) have been taken down to points where they're compelling.
Certainly, in the shorter term there's a good deal that depends on the Fed rate hike and if the Fed does hike rates in September or December you may get a better opportunity for income names.
As for income names, Pipelines have been unfairly obliterated by the combo of interest rate fears and concerns over anything oil-related. Inter Pipeline (IPPLF) just reported a record quarter and is down considerably. Quality MLPs (EPD, MMP) are down enormously and I just don't think the state of the business for these companies suggest the declines that have been seen.
As for Ecolab, that's absolutely never going to be a home run. What I want is something that I think offers a high degree of consistency and whose business provides a need in both good times and bad. It's raised the dividend every year for 30+ years. The water aspect of Ecolab (ECL) is a core element of why I find it attractive, but the company works for me on a number of levels - as for hygiene and sanitation, hospitality/restaurant and other businesses have to maintain standards in good times and bad. (http://www.ecolab.com/about/our-businesses.) Again, I'm not looking for a home run with Ecolab by any means, I'm looking for something that I think works for a number of themes and I think will be consistent and relatively boring over the long haul.

We've been using AC for over 20 years, and never had an idea of this. Agree with VF re genuine!

FYI: Most corporate philanthropy follows a conservative and predictable course, but at American Century Investments, a $152 billion-asset mutual fund firm in Kansas City, Mo., charitable giving has a whole new level of meaning and commitment. In 2000, American Century’s founder, Jim Stowers, broke ground on the Stowers Institute for Medical Research. He endowed the organization over the years with $2 billion, including a chunk of his wealth and, crucially, a 40% share of his mutual fund company. Since then, the medical institute has received $1.1 billion in dividends from American Century.
Regards,
Ted
http://blogs.barrons.com/penta/2015/08/28/how-american-century-investments-funds-science/tab/print/

Sure would have been nice to include some evidence in support of that claim. Barry's evidence seems to come down to two things. First, computerized selling created Monday morning's disconnect between price and value. SBUX was down 22%. Some ETFs were down 30%. Second, he links to an article from January 2012 on the theme "sure has been quiet around here lately." Sadly, neither of those two bits of information (nor the fact that hedge funds were poorly allocated and that CNBC's ratings suck) support the claim that mom 'n' pop are finally cool, steely creatures.
The evidence he offers that folks are buying more ETFs actually points in the opposite direction (the "T" is for "Trading" and evidence I've seen suggests that people who possess trading vehicles, well, trade them). The evidence that TD Ameritrade froze up and that Vanguard had to do the "all hands on deck" thing to cover incoming calls suggests that mom 'n' were on the phone and at their keyboards . The WSJ reports that Tuesday's stock fund redemptions were the greatest in eight years.
I'd really like the headline to be true. I'm just not sure that I've seen the evidence to substantiate it.
David

Michael...if you like the idea of divi payors, pay close attention to what Scott recommends for reits...in your deferred account. Always do your own research, but it's worked nicely for me. That's a nice addition to a portfolio.

Personally in regards to real estate, things that come to mind in the moment - may be others, but just throwing some things out... as noted above, always do your own research.
No particular order:
1. Starwood Property (STWD) Somewhat dull, excellent management, not going to be a home run ever but high income that I have a degree of confidence will remain stable and grow. Will benefit from rising rates and the presentation on the company's website has outlined how much they will benefit.
2. Ventas (VTR) Has been obliterated, but high-quality healthcare REIT that is somewhat cheaper in the literal sense now after they did a spin-off. I'm not against the major names in healthcare REITs, but feel Ventas is particularly high quality.
3. Kennedy Wilson (KW). Not much of a yield, but interesting integrated real estate company (not a REIT) that owns real estate and provides services (auctions, etc.) Somewhat volatile. Famed investor Prem Watsa's Fairfax Financial had a large stake in Kennedy Wilson (although I believe a significant amount and possibly all of it is convertible preferred) as of recently, I'm not sure what the stake is at this point. From the end of 2014 letter: "We have invested $629 million in real estate investments with Kennedy Wilson over the last five years. Through
refinancings, sale of some loan portfolios and gains on hedging contracts on Japanese yen, we have received
distributions of $465 million. Our total net cash investment in real estate investments with Kennedy Wilson is
therefore now $164 million, and that investment is probably worth about $350 million. We have yet to sell though,
while our cash flow return of 11.2% is very acceptable. Also, we continue to own 10.7% of Kennedy Wilson
(11.5 million shares): our cost was $11.90 per share, and the shares are currently trading at $26.19."
--
4. Equity Lifestyle Properties (ELS). Sam Zell chaired REIT that is heavily into RV/campground/retirement communities. Lots of waterfront/near water land. Compelling (while not everyone is going to be into RVs, where the land is is the thing) but not cheap at all and not a great dividend. Still, unique and worth having on radar.
I'm trying to post the rest of this but it's not letting me, I keep getting an error.

"This sage advice smacked me in the face Tuesday night, coming from a 20-year Wall Street trading veteran. After the craziness of the previous few trading days, he emailed to ask if I wanted to grab a drink. So we did."
1. Does the author identify the 20-year Wall Street veteran? Oldest trick in the (journalistic) book is fabricating interviews with presumed knowledgable individuals as a way of making your own conclusions more palatable to readers.
2. Note that he arrived at these conclusions over a drink(s). Booze usually makes me smarter too.
3. The title of the article is ludicrous on the surface. I've been investing, reading and following markets for at least 40 years. Still haven't learned everything I need to know.

FYI: (I will link interview early Saturday morning when it becomes available for free.)
Regards,
Ted
August 27, 2015
Dear WEALTHTRACK Subscriber,
Most of the top rated money managers we interview on WEALTHTRACK are what are called “bottom up” investors, they build their portfolios one security at a time, stock by stock, bond by bond by carefully analyzing the fundamentals of the security itself, the company it represents, the business it’s in, and the customers it serves.
This week’s guest, Brian Singer, takes a different approach. He is what is known as a
macro investor. Singer is Portfolio Manager of the William Blair Macro Allocation Fund which he and his team launched when they joined William Blair in late 2011.
The Macro Allocation Fund is rated five-star by Morningstar and has outperformed its Multialternative category handily over the last three years with over 9% annualized returns.
Prior to joining William Blair, Singer was the head of investment strategies at his namesake firm, Singer Partners and prior to that was head of global investment solutions and Americas chief investment officer for UBS Global Asset Management.
Singer’s top down approach doesn’t involve choosing individual securities. It does mean actively managing across asset classes, geographies, currencies and risk themes.
We’ll find out why he strongly believes that macro matters for individual investors. He will also share his “One Investment” idea for a long-term, diversified portfolio.
As usual, the show will air on Public Television this Friday and over the weekend. You can check your local listings here. If it’s easier for you to watch the show online, it’s available to our PREMIUM viewers right now. Otherwise, it will be available on our website over the weekend. In our EXTRA feature, you can also see our exclusive online interview with Singer about his positive take on Bitcoin!
Have a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo

@heezsafe, thanks for the video. Will watch it later. Here is my take on OSTIX. Osterweis is a conservative firm who invest much of the old money in the Bay area for a long time. OSTIX has the flexibility to invest in many bond sectors. Kaufman's team chose the higher quality end of high yield bonds based on the best balance between risk and return as part of the portfolio construct. Noted that most are rated in B quality, little in C and below. Duration has been shorten in recent years to anticipate the impact of future rate hike. According to M* X-ray, there is little overlap between OSTIX's individual bond holdings comparing to that of the high yield ETFs such as JNK or HYG. While there are many oil driller bonds in the high yield sector and many will likely to default due to the declining oil prices, but OSTIX has none of these bonds. In addition, the double digit cash position reflects their risk adverse nature in today's market condition. In other times the cash position are in single digits. Of course, some of these bonds are thinly traded and difficult to price in stress times that reflect longer recovery period as David eluded to. Loomis Sayles Bond fund also experienced the liquidity issue in 2008, but it rebounded strongly in 2009. Dan Fuss gave an excellent interview in Wealth Track about a year ago discussing this issue. Overall OSTIX is an excellent multi-sector fund for conservative investors who seek flexible mandate and skillful management team.

FYI: Here are four days from the past 15 years that taught some harsh lessons—and a guess at the lessons investors will learn this time.
Regards,
Ted
http://blogs.wsj.com/briefly/2015/08/27/5-days-that-taught-investors-all-they-need-to-know/

"As an FYI...If I had things to do over again, I would have started earlier with my income sleeve consisting of dividend paying stocks. Even holding things like JNJ, PAYX, AEP as examples for the last 5 years, I have been astounded with the power of compounding dividends....and when stocks are down, is the perfect time to buy the dividend payers. That's a hint, BTW."
I'll second this....
"Hindsight is always 20-20. No one can predict the future. Make decisions in the present and be at peace with yourself they are the right ones"
...and this.
----
Most of what I own are in individual names, but there are also some mutual funds and a couple of other things, like RIT Capital Partners (http://www.ritcap.com/our-team)
For me, investing is largely a mixture of income and growth, with names that I find attractive/fall into themes that I'm interested or have other aspects that I find compelling. As I've noted before, I particularly like tangible assets (railroads, infrastructure, real estate) and needs (healthcare being a core focus there, along with things like Ecolab.)
There are large dividend payers (Starwood Property, Blackstone, etc), medium dividend payers and small dividend payers that will hopefully grow the dividend over time.
I do feel very strongly about what I consider a portfolio of best ideas. Oddly, I find owning individual names that I have a strong thesis about less stressful than owning funds because there is that connection and thesis.
Personally, while a day like Monday was disappointing and a bummer, with mostly individual names that I consider a collection of "best ideas" (and my best ideas are not going to be someone else's and that's fine), I wasn't like....

.... because I don't plan on selling these names or trying to time them (and a number of them I see as potentially multi-decade holdings.)
I am younger than most on the board and am heavily stocks. I do not recommend that those who are in retirement or nearing retirement allocate in the manner that I do, although I do think there are holdings of mine that are conservative, including Ecolab (ECL)
But yeah, I agree with what Press said: "Your choice is to put it in all at once per Ted's advice....which is sound if you have 10-15 years until retirement, or to invest in increments. Frankly, if you break it down, don't break it down too finely...1/3 or 1/2 at a time.
But you need to get it in play being that far out from retirement. If you see 2 big down days in a row, hold your nose and put the order in."

In situations like right now, I sell my "least conviction" funds, then if I think this may not be a dead cat bounce, I buy my "high conviction" funds. By that I don't mean I buy what I think might go down more or what I might go up more. I mean those funds I never bought as a long term hold, and those funds which would be the last funds I would sell.
So I sold some SCMFX, bought some FPACX. I sold some RWGFX, bought some AUXFX. No one went broke paying taxes and no one fretted about not making enough money in the market. Au contraire, I still feel like puking when I remember how stupid I was in 2000-2002 and will never get over it.
Hindsight is always 20-20. No one can predict the future. Make decisions in the present and be at peace with yourself they are the right ones. Don't let anyone tell you 5 years later you made a mistake. If they do, slap them.
Lesson for investing. Lesson for life.

Thanks Michael,
I'm about 75% equities in a taxable account, and 40% in an IRA rollover, but with additional monies to be put into play on the equity side in both as I described. I tend to shoot for 65-75% equities, but am flexible depending on the environment.
It's a bit more complicated than that, as those percentages include money in bucket 1-type funds for near term spending in both accounts. You may learn more about that as you near retirement. I'm a big fan of that type of mental accounting, and used the last 6 year run-up to fund that cushion. It makes entering retirement a bit less stressful.
What I recently added money to is in Scott's thread..."what are you buying", etc.
As an FYI...If I had things to do over again, I would have started earlier with my income sleeve consisting of dividend paying stocks. Even holding things like JNJ, PAYX, AEP as examples for the last 5 years, I have been astounded with the power of compounding dividends....and when stocks are down, is the perfect time to buy the dividend payers. That's a hint, BTW.
press.

Michael...as they say "time in the market beats timing the market". Unfortunately, moving money out of stocks requires you to be right twice...when to move it out, and then when to move it back in. I must say, if you wanted to scale back, you hit that first item right on the money.
I was faced with a similar question, when I recently retired and the 401K funds were shifted from my employer to Schwab where I control the rollover account. I purposely chose not to invest the equity portion...which turned out ok to this point, as I moved 35% into equities yesterday when the market was down 10%.
Your choice is to put it in all at once per Ted's advice....which is sound if you have 10-15 years until retirement, or to invest in increments. Frankly, if you break it down, don't break it down too finely...1/3 or 1/2 at a time.
But you need to get it in play being that far out from retirement. If you see 2 big down days in a row, hold your nose and put the order in.
Just curious...are the funds taxable when you ultimately withdraw them?

@MikeW: "I reduced my stock fund holdings % in my 401K account down to about 50%." That was a big mistake, get back to 75% as soon as possible. With 10-15 years till retirement, time is on your side.

Hello all,
I greatly appreciate the dialogue from members on MFO as I learn from each of you on a daily basis. I was hoping to get your advice. With the market turmoil, I reduced my stock fund holdings % in my 401K account down to about 50%. I did this two weeks ago. While I was able to avoid some of the carnage, I am now faced with needing to develop a strategy for increasing my stock holdings back up to their target allocation. I am 10-15 years away from retirement and my target allocation is 75% stocks and 25% bonds(38% S&P index, 16% small cap index, 21% international fund index, 20% short-term U.S. Treasury security index, 5% Barclays Capital U.S. Aggregate Bond Index).
I wanted to ask your advice on a strategy for gradually increasing my stock holdings back to their target allocation. I am thinking about increasing this gradually -- perhaps from 50% to 60% and then 60%-70% and finally 70-75%. I could make these moves on a weekly or monthly basis. Would value your advice on whether this makes sense or if you would suggest a different approach. Also, please let me know if you have any thoughts on my asset allocation. I am a member of the governments thrift savings plan so I can only choose their index funds.
thank you!
Michael

I have stuck with MAPOX. Market price has taken it down to 12.93% of my total. I concentrate on the 3-year return number, rather than day-to-day, because I've actually been in the fund for 3 years, now. But now, here it is, Thursday, 27th August, and EVERYTHING is green and doing well, even XOM, which is the 5th-largest holding in MAPOX. I do not think that the fund's bias toward Upper Midwest companies is good or bad, either way. Only 5% turnover, with a Large/Value slant.
http://www.morningstar.com/funds/XNAS/MAPOX/quote.html

There are decent cash like choices to cover short term uses without dipping into bond and equity buckets. Cash Money market short term CD are reasonable choices as others on this board have noted on another discussion.
Many 401k plans have a stable value fund (ER 0.2%) with a daily NAV of $1.00 and a yield slightly higher than money market. Government employees have a government investment securities that functional similar to money market. Don't know if 403b plans have similar choices.

CHS Preferred Shares (CHSCP, there are others but lets use CHSCP as an example) over the last 6 months.
http://finance.yahoo.com/echarts?s=CHSCP+Interactive#{"range":"6mo","allowChartStacking":true}
Take it out to 10 years.
http://finance.yahoo.com/echarts?s=CHSCP+Interactive#{"range":"10y","allowChartStacking":true}
Plus a 6.5% yield currently.