A top performing small cap may not always be one. A fund comes to mind a few years ago I had RYPRX. It was closed and became too large. They are now mid cap.

I have been wanting to get back into NEFJX for sometime now as it has remained closed to new investors for a good number of years. It looks as though the A shares have 337 million in asstets while some other funds I have reviewed for possible purchase are much, much larger. And yes, it is a fund that I have used, in the past, for special investment (SPIFF) purposes. Maybe that is why they closed it? LOL.
I have linked its M* report for those that have an interest. Notice its 10 year performance as well as its one, three and five year numbers. Reminds me of an old song titled ... Leader of the Pack ... youtube link below.
http://www.morningstar.com/funds/XNAS/NEFJX/quote.html

And, another take ...

FYI: Few of the top-performing small-cap mutual funds of the past 10 years are still open to new investors.
Success has a bad side for small-cap funds. Performance lifts assets and attracts more assets from new investors. But most fund managers have a limit to how much money they can run efficiently in the small-cap space.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MjAwODE0Njk=
Enlarged Graphic;
http://news.investors.com/photopopup.aspx?path=webLV073015.gif&docId=764173&xmpSource=&width=1000&height=1063&caption=&id=764072

@davfor: Unfortunately, with many fund investors, its what have you done for me lately. As soon a a fund turns south over a couple of years they start looking for reasons to dump it Both of the Yacktman Funds are in the 1 & 2 percentile for ten and fifteen years. For what its worth I owned Fidelity Magellan from 1972-1996.
Regards,
Ted

@Ted Thanks. That was interesting. Their process continues to make long term sense to me. I recall a similar interview with Don Yackman in 1997 about the time I first invested in YAFFX. YAFFX is up about 510% since inception in 1997 while the S&P 500 is up about 365%. I currently plan to stick with it to see what the next 10 years brings.

I haven't backed up the truck with GILD shares, although I did purchase some more shares last Thursday.

Basically, you have a situation - even more than Apple (and Gilead has often been called the "Apple of Biotech") where the market is demanding to know more about what the next five years looks like.
Look at Celgene, which has really kind of spelled out what the next 5 years look like, complete with projections and a number of recent purchases/partnerships. Celgene is trading at nearly a 50 p/e.
Gilead, which has really not spelled out what the next 5 years looks like, is trading with about a 13-14 p/e and has just had two quarters where the analyst estimates weren't even close to the beat that the company delivered.
If Gilead makes a "transformative" purchase (and their two major purchases have resulted in enormous success) or even a series of small purchases then would it stand to reason that Gilead should deserve to trade at a higher multiple? I think so. Is Gilead undervalued at present time? I think so, too. The market/valuation is acting like there isn't any pipeline at all and is basically ignoring growth internationally. The company has nearly $15B in cash.
The company is certainly not without risk, but it has taken in a lot of cash and management should have - at this point - proven themselves quite capable, given their track record. With the valuation where it is, I'm not buying anymore than the already large position, but I do feel very comfortable holding it and that there is a margin of safety with the valuation where it is. The dividend helps, as well.
I'm not expecting Gilead to repeat its past performance. I simply see what I believe to be a very undervalued stock that I think could do very well over time (and potentially grow the dividend.) I think it's gone from a volatile biotech to something that looks and feels more like a buy-and-hold stock.

A few months old? It's 115 years old (since 1900) :-)
Don't know what use to make of it, but you're right that it looks like a fun read. A very brief skim turned up the fact that the US and France are the most diversified nations (by sectors), and that the Vice Fund did very nicely. I'm wondering what Morocco's sole industry is (phosphates?)

Hi @Junkster
Not unlike any investor, I/we don't like to give back any money.
Had a decent YTD as of last Saturday. That value is taking a bit of a beating since last Friday. But, money (rates/bonds) is still very cheap for borrowing and I feel some equity areas will still be the areas into which the money will continue to run. We don't have any direct exposure, at this time; to Asia area. China.....well, not sure how to gauge that market; as how does one know what is real and what is government support? A whole different form of government QE! So, with fingers crossed; we will remain with the following for today.......
Pretty much a full rotation from 3 years ago for percentages for our portfolio. Broad U.S. equity is so-so, eh?; U.S. real estate is improving, but rough YTD and bonds mostly flat YTD. The support for our portfolio currently, has been from healthcare and Europe.
Below is our current mix.
---68% equity
---22% bonds
Of the equity mix: 42% is health related equity, 25% is blend caps U.S., 20% international and 13% U.S. real estate.
Equity funds:
HEDJ (Wisdomtree hedged Europe, a lot GB, Germany, France and a bet on a continued weakening Euro and improving economies)
FHLC (Fid. health etf)
FSPHX (Fid. select health)
PRHSX (TR Price health)
VIIIX (Vanguard Total U.S. index)
ITOT (I-shares, U.S. market)
GPROX (Granduer Peak)
DPRRX (U.S. real estate)
BRUIX (U.S. real estate)
FRIFX (U.S. real estate...50/50 equity bonds)
Bond funds:
BAGIX (investment grade mostly, similar to Pimco PTTRX)
DGCIX (Delaware bond, mixed)
FBNDX (Fid. I.G. bonds)
Stocks:
DPLO (IPO purchase last October) 30 year old private speciality pharmacy. I/we were very much aware of the quality of management.
ABC (AmerisourceBergen-pharma/medical items distribution, now veterinary, too,etc.)
Reporting from the end of a half sawn investment tree branch and hoping for no big winds to rock the tree.
Catch

I swapped DVN (a relatively long-term holding, I had a small profit) into TDW. This worked well for me in 2008-9 with the housing and financial sectors, I swapped from lower into higher beta names to increase my potential upside when the rebound came without touching my cash stake.
I am, of course, presuming that a rebound is coming is energy, though I am willing to wait a couple years for it...

Hi Guys,
Rick Ferri completely agrees with MikeM’s observation that increasing the number of actively managed funds in any fund category lowers the likelihood of positive Alpha (excess returns) in that category.
According to studies completed by Ferri, investors who hold multiple actively managed mutual funds in categories are swimming against the tide. Their odds of besting a single Index strategy decreases as the number of their active positions and the time length of those positions increases.
Two overarching experimental factors contribute to Ferri’s conclusions. First, the percentage of actively managed funds that outdistance their Index benchmarks is typically below 50% for any given year, and that percentage drops with increasing years. Second, for those few funds that generate temporary Alpha, the positive outperformance is substantially less than the negative Alpha registered by those funds that fail to match the Index hurdle. It’s a double whammy.
Fund managers are smart folks, but selection and timing talents are overwhelmed by fees and costs.
Here is a Link to the whitepaper by Rick Ferri that makes “The Case for Index Fund Portfolios” based on extensive Monte Carlo simulations:
http://www.rickferri.com/WhitePaper.pdf
Ferri identified 3 Passive Portfolio Multipliers (PPM) in terms of returns enhancements: (1) Combining Index funds in a portfolio improves the odds of outperforming actively managed funds, (2) As time expands, the odds shift even more favorably towards Indexing, and (3) Increasing the number of actively managed funds in any asset class also increases the likelihood of Index outperformance.
This last finding directly addresses the issues discussed in this MFO exchange. The statistics are not attractive for those folks who hold multiple actively managed funds in various asset classes. Those studies are imperfect, but they are fairly constructed, honestly executed, and tell a compelling story.
The Monte Carlo simulations do not say it can not be done; in fact, they say it can be done. But the odds are long.
Ferri ran 6 different portfolio construction scenarios. In one of those scenarios, he limited the actively managed fund universe to funds whose costs were below the category average. Results improved, but the Index portfolios still outdistanced their active rivals.
An Index portfolio guarantees Index returns. Adding active elements, even one element, degrades the likelihood of delivering those Index rewards. If you feel you have an edge with one superior actively managed fund why not just invest with that agency? Mixing it with an Index product only dilutes the perceived advantage.
Portfolio diversity works, but there are limits. The law of diminishing returns comes into play. A long, long time ago, market wizards concluded that equity diversity in the US was asymptotically reached when the individual stock holdings approached the 40 level.
Holding 40 or more mutual funds surely does not add to diversity; it contributes complexity. I’m sure reasons exist for such complex portfolios, but diversity is not one of them. Holding so many funds is equivalent to holding the entire marketplace, except at an added cost penalty.
Ferri’s work reaches conclusions that are similar to a small number of earlier studies by researchers like Allan Roth. The odds are that the mixed portfolios, even if they include some Index holdings, will underperform a pure Index portfolio.
To misapply the words of Gertrude Stein: “There is no there, there”.
For the record, I currently hold a mix of both passively managed and actively managed funds. Over time, I am gravitating towards a higher fraction of Index positions. I do plan to keep some actively managed products. Sometimes, hope trumps logic.
Best Wishes.

@MFO Members: Short term IWIRX has had it's troubles, but longer-term 3, 5, and 10 years, the fund has been in the 2, 2, and 1 percentile over those periods of time. I recommend holding this fund. U.S. News & World Report ranks it #3 in the (WS) Fund Category.
Regards,
Ted
http://money.usnews.com/funds/mutual-funds/world-stock/guinness-atkinson-global-innovators-fund/iwirx

"Roy Weston", based on a glowing article in the WSJ back in the 90's. Environmental waste disposal for chemicals and other nasty stuff. You never heard of it? Try this link:
"Trust: We build long-term trusted client relationships"
"Performance: Over 55 years of proven experience"
"People: Our people make the difference"
Our Core Values:
Integrity .. Teamwork .. Focus .. Safety .. Exceptional Quality .. Making a Difference
Odd... they don't mention bankruptcy in there anywhere...

@Old_Skeet
(1) What was the expense ratio of your composite MF portfolio for 2014?
(2) Since the SEC now requires funds to include a separate statistic that includes all expenses paid by fund shareholders in their fund offering literature (this figure includes transaction costs, acquired fees, trading commissions, etc), what would that figure have been for your composite MF portfolio in 2014?
(3) For all your MFs not in tax-sheltered locations, what percentage of the total return of those funds was relinquished to the taxman? For half of those funds, if you had been invested instead in an index fund (say, an index fund used as a benchmark for any of these funds' performance), would your net (after-tax) returns have been higher, about the same, or lower?
"Just curious." I'm speculating you haven't any idea what the answers would be to any of these questions. And, if that is the case, ... then why is that the case? [expenses.... fiddle-dee-dee?]
@MikeM You are not alone--- I started doing what you're suggesting about 5 years ago and probably should have started 10 yrs ago. It takes awhile (still a work in progress for me). The thing I've come to most like about it is that it gives you "another kind" of choice when rebalancing (or, if you get an unexpected gain in an individual stock and decide to realize it, you can "diversify down" the risk of reinvesting the gain by sprinkling some of it into an MF index fund with the same, or different, mkt cap). I dunno, does that rationale make sense? SleepyTime, and my explainer module power is on the wane.

@hank- Howdy. Ever since I've been a teenager I've been fixing stuff like plumbing and electrical installations, although I've tapered off significantly in recent years. Because of that lifelong experience though, I think that I've got a reasonable feel for the historical retail cost of things like copper plumbing parts, and electrical hardware.
Hank. I have to tell you that with respect to copper plumbing hardware- simple things like 90° elbows, pipe couplings and so forth- nothing fancy, just everyday fittings- the cost per item in the last ten years or so has just been astronomical. Look- if you go to the hardware store, pick up a single pipe fitting, hold it in your hand, look at what it's made of, then look at the price tag, it just screams at you: something is very wrong here.
Sure, China's rapid development is a contributing factor, but I have to wonder what the recent cornering of the distribution market by the commodity divisions of the larger worldwide banks for basic metals like copper and aluminum has contributed. My deep suspicion is that the speculative actions of the banks and other middlemen had simply driven the user cost of these materials to the point of absurdity. Since 2008, the whole thing has collapsed, and I'm thinking that these basic materials are simply trying to find their more natural and normal pricing mechanisms.
The oil and energy side of the commodities is a completely different animal, with huge changes coming from every side, but there may also be a certain element of prices trying to find their more natural levels happening there also.

I generally don't discuss funds I've owned, but it's worth making an exception here, because this was a holding I went into with eyes wide open - taking a flyer despite knowing all the strikes against it.
PBHG Emerging Growth (PBEGX). Managed by Christine Baxter, the 25 year old daughter of the fund family's co-founder (Harold Baxter); a fund family focused on momentum investing (guaranteed to crash and burn at some point) - sort of like Janus on steroids if that was possible; and a fund family just as caught up in the 2003-4 fund scandals as was Janus.
As this M* column notes, PBHG wasn't well staffed with analysts and had high management turnover including Baxter, who stepped down at the end of 1999 after erratic and underwhelming performance (relatively speaking).
At least I sold it in early 1999 - on an absolute basis, the fund did great; on a relative basis it underperformed by more than 10%/year for several years (see link on Baxter stepping down).
Some people go to Vegas; I decided to spend my play money this way.

Hi @ MikeM,
Each of us have to run with what works best for each one of us.
I have my portfolio as a whole benchmarked against the Lipper Balanced Index and overall have out performed it through utilization of my sleeve management system which I have posted many times before and below again for those interested. And, yes ... I have most of the sleeves benchmarked against a standard and entered into Morningstar's Portfolio Manager as a portfolio by themselves. With this, I can check each sleeve along with the funds held within the sleeve for their daily performance, weekly performance, monthly performance, quarterly performance, year-to-date performance, one, three, five and ten years returns against a chosen benchmark the exception being the specialty sleeve which has no benchmark.
In addition, the use of special investment positions (SPIFFS), form time-to-time, have been a positive contributor to the portfolio's overall performance.
Old_Skeet's Sleeve Management System (06/26/2015)
Here is a brief description of my sleeve system which I organized to help better manage the investments that were held in five accounts. The accounts consist of a taxable account, a self directed ira account, a 401k account, a profit sharing account and a health savings account plus two bank accounts. With this I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves. … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of four sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve and a specialty sleeve. Each sleeve consists of three to six funds (in most cases) with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and the amounts held. By using the sleeve system one can get a better picture of their overall investment picture and weightings by sleeve and area. In addition, I have found it beneficial to xray each fund, each sleeve, each investment area, and the portfolio as a whole monthly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets and wish to weight accordingly. All funds pay their distributions to the cash area of the portfolio with the exception being those in my 401k, profit sharing, and health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement with the residual being left for new investment opportunity. In addition, most all buy/sell trades settle to the cash area with some nav exchanges taking place.
Here is how I have my asset allocation broken out in percent ranges, by area. My neutral targets are cash 15%, income 30%, growth & income 35%, and growth 20%. I do an Instant Xray analysis of the portfolio monthly and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc.
Cash Area (Weighting Range 5% to 25%)
Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual)
Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 20% to 40%)
Fixed Income Sleeve: GIFAX, LALDX, THIFX, LBNDX, NEFZX & TSIAX
Hybrid Income Sleeve: AZNAX, CAPAX, FKINX, ISFAX, PASAX & PGBAX
Growth & Income Area (Weighting Range 25% to 45%)
Global Equity Sleeve: CWGIX, DEQAX, EADIX & PGUAX
Global Hybrid Sleeve: CAIBX, IGPAX & TIBAX
Domestic Equity Sleeve: ANCFX, CFLGX, FDSAX, INUTX, NBHAX, SPQAX & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, DDIAX, FRINX, HWIAX & LABFX
Growth Area (Weighting Range 10% to 30%)
Global Sleeve: AJVAX, ANWPX, NEWFX, PGROX, THOAX & THDAX
Large/Mid Cap Sleeve: AGTHX, BWLAX, HWAAX, IACLX, SPECX & VADAX
Small/Mid Cap Sleeve: IIVAX, PCVAX & PMDAX
Specialty Sleeve: CCMAX, LPEFX, SGGDX & TOLLX
I wish all ... "Good Investing."
Old_Skeet

That was also nearly 11 years ago... Liquidity in these markets is much different today.

As are the number of golden geese Wasatch has left :)

In another post talking about ARIVX, PressmUp brought in the concept of having multiple funds in the same category (or bucket or sleeve) to diversify management mishaps. Basically if one manager is having an off year another might be compensating with a good year. I know a lot of people here follow this concept and I understand the principle. My counter to this argument is that an index will give the same result of management diversification and the same or better returns over time. My own personal attempt at investing is to mix one favorite fund/manager in a category with the corresponding index. Hopefully a little alpha to outperform the index but even here I could be kidding myself. Of course this alpha fund has to have a system or process or be unique enoughto give alpha.
Just playing around, I used the 2 funds PressmUp mentioned and compared return to the one alpha fund plus index idea. Because all the funds mentioned were fairly new it is a very limited comparison. I took the funds in equal ratios, 50:50 since there were only 2 funds to play with. VVPSX and SCMFX were the funds PressmUp uses and I use 1 fund, GPGOX in the SCap space. I only took the last 3 1/2 years to compare all over an equal time frame.
50:50 mix of:
VVPSX + SCMFX averaged 16% / year from 2012 to 2015 YTD
VVPSX + Russ2000 index avg 17%
SCMFX + Russ2000 index avg 15%
GPGOX + Russ2000 index avg 17%
Russ2000 index alone avg 16%
All examples pretty close in return I would say. I also know my statistics are flawed in that I used 2015 with the same weight in the average as the other full years. But for quick and dirty comparison it works.
Now I'm more curious about people who have 3 or 4 or more funds in a category. Have you stopped to make sure that your manager diversification scheme actually benefits your return?
Are you willing to test your multiple fund selection?
For people with multiple funds in a category, would you be willing to make this comparison for information purposes? If you averaged your 3 or 4 or 5 small cap funds for example (any category really) and compare that to what you think is your favorite fund (if you had to pick just 1) plus the index, which method gives greater return? I'd be very curious to hear.

@PRESSmUP and heezsafe,
For now credit risk in VWITX is low comparing to Oppenheimer exposure to PR bonds. Since rates are will definitely be higher in the future, duration risk still persist in higher rate environment, but it is still manageable unlike long-term mini funds. Having said that, there are only few years where the annual total returns turned negatives since 1994 (2014, -1.56%; 2008, -0.14%; 1999, -0.50%, and 1994, -2.12%) when the interest rates range between 0.25 to 6%.

http://www.moneycafe.com/personal-finance/fed-funds-rate-history/

In the 80's when the interest rates were in double digits, this fund did not fared nearly as well. Given low inflation (by Fed's definition) and slow economy, rate hike will likely to be gradual over the next few years, and I can live with these unknowns.

Safe... I suppose so. As much as anything on this side of cash.
I have 2 years of spend in my taxable account in VWITX. I do know that VWITX has no Puerto Rico exposure, so that's a plus. On the bond side, I have absolutely no idea what is safe and what is not. If I can wring 1-3% out of a bond holding, I will be happy as a clam. I am glad that at this point, I don't look to bond income for my daily bread.
press