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

Yes, Scott is right. Eric Cinnamond's name has become synonymous with "value trap" manager. And he has been invested this way for years now. MFO has endorsed many good funds, but the endorsement on this manager turned out to be a loser over the last 4 1/2 years.
Hate to beat a dead horse, but this guy has been barking up the wrong tree with his investments. He has been over-weight in PM miners for years now. His inability to adapt or see that the market doesn't agree with his analysis is kind of Hussman-esq. Might he preserve capital in a down turn with all that cash? Sure, but how long do you give a manager to prove himself right? Personally, I got out of ARIVX a couple years ago because he was so over weight in mining stocks. Two years later, he still is.

other holdings, some bonds and equities are the drag on performance for both PDT and FFC. With an 8+% distribution, patience will pay off as in pervious years. Quality is the difference.

30 years in front of "eager learners" (Public School Industrial Arts...which transistorized into Technology Education...which morphed into STEM) will cause this. Thanks.

I don't have any junk bond funds because of the recent price action. And junk bond funds could well be on their way to only their fourth negative year (1994, 2000, 2008) since the Michael Milken fiasco in 1989/90. I would love to see a mini crash in this sector. But Josh Brown is really stretching it by invoking Jeff Gundlach (saying Mr Gundlach believes junk bonds could be the next big blowup) in his commentary on the imminent demise of junk bonds. Just last week Mr Gundlach was on CNBC saying he believes junk bonds are a **good** investment bet in 2015. He believes any debacle is a long ways off like 3 to 4 years down the road.
http://www.bloomberg.com/news/articles/2015-07-15/gundlach-says-junk-bonds-will-be-debacle-in-3-to-4-years

If the chart included the the late 70s and the 80s and 90s, it's a totally different picture. One thing I learned as a futures broker in the 70s is never buy commodities, not even as a hedge. I can't tell you how many end of the world fanatics I have encountered over the past 40 years that have a huge portion of their net worth in gold/silver bullion/coins. Had that been in equities instead, they would be vastly richer by an untold amount.

A diversified allocation doesn't really care, since these things all tend to work themselves out. Over 10 years, growth has done better because of the last 3 and 5 years. Technology and health care have led the way, and these are rarely considered value sectors. Five years from now, we could be asking "when will value funds improve?"

FYI: Fifteen years is a long time, but it hasn't been enough to erase the poor average annual returns of growth stock mutual funds for that period. The average growth mutual fund rose an average annual 0.58% in the past 15 years vs. 7.28% for its value-style counterpart, 6.83% for core funds and 4.38% for the S&P 500, according to Morningstar Inc.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MjAwMTcwODY=
Enlarged Graphic:
http://news.investors.com/photopopup.aspx?path=WEBlv072215.jpg&docId=762773&xmpSource=&width=1000&height=1225&caption=&id=762770

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

Can anyone shed some light on the comparative performance of PRGTX to PRMTX? Are these two funds too similar to own both?
I own PRMTX. Aside from 08/09 and 2014, PRMTX has outperformed PRGTX eight out of the last ten years.

This is a report of how employees of national firms (such as Edward Jones) like their employer, not how customers like their advisors.
One cannot read the actual study (this is how companies like JD Powers make their money), but one can still go to the actual press release. That provides more (and often clearer) information than one gets elsewhere (rewrites of the PR).
The survey has been going on for many years (at least since 2008) - the rewrite said just the past two years. It is true that the survey was restructured in 2014, but it appears that the same 1,000 point scale was preserved. (I can't find any description of the scale, e.g. whether it is linear, or like M* ratings distributed unevenly.)
Here's the 2015 release, 2014 release, and 2013 release.
It seems that what the restructuring amounted to was using the same seven factors (e.g. compensation, operational support, etc.) in surveying all advisors post 2013, as opposed to using different factors for employee advisors (9 factors) and for independent advisors (8 factors). The older surveys also ordered the weighting of the factors differently depending upon whether the advisor was an employee or independent.
Not that I think any of this matters, but if one's going to read the results, one might has well have an idea of what they're talking about.

Yes, it would have been great to buy XBI a few years ago at the bottom. At my age, however, I would be too nervous to commit that much money at once after the run biotech has had. Much less anxiety to buy a little ETNHX...or FBIOX. Now, if we had a biotech pullback......

The more I read, the more I think VMVFX (and maybe a bond fund, if one doesn't want to view SS payments as a bond.)
I look at fees as a percentage of what I earned that year. If I pay 1% and earn 5%, I pay 20% of earnings. (VMVFX still costs me >6%.) If I lost money, I don't even want to go there. If someone had been with me from year zero (which NEVER would occur, because I was in debt at year zero), had advised me well, and I had on the average earned 5 to 8 X her charges yearly (10 x would be better), I'd probably be happy, even if she had taken 15% or more of my earnings.
But, if someone wants me to pay them $50K - $200K over 10 years, they had better promise me $0.5 to 1M better than VTI during that interval to justify their cost. If all they are offering is downside protection, they had better cost much less. (Timing may be everything, but it's extremely difficult, and you probably still lost money.)
Since I don't believe it is 4X more difficult to advise a $2M portfolio than one of $500K, I would opt for hourly reimbursed advice even if it's padded by a couple of hours, if I trust the adviser.

International/Global Stalwarts looks interesting, and perhaps they'll stay open a little while longer because of the slightly larger size. Honestly with the microcap fund, this might go small enough that it compounds in the high teens especially since it won't make it past 25 million.
Their funds have done well over the past few years, but with hundreds of holdings, it's hard to believe there are that many attractive companies, despite the universe of stocks they choose from. I'd love to see a focus fund with almost no turnover should they launch something after these three.
I didn't pull the trigger last time on gpiox, but I could definitely consider these for part of my foreign allocation.

@hank. Your comment on the tomatoes reminds me of the 1973 film Soylent Green where I think one went for $250. Actually over the years my attempt at growing tomatoes in my back yard is similar. After buying the plants, the best soil, the mulch, plant food, I figure each tomato I would get cost at least $25.00. Growing them in the strong New Mexico sun and summerheat not like growing them in my former east coast home.

@mnzdedwards
Similar to when Wasatch opened the Microcap Value and International Opportunities Funds years ago also.

Been in and out of gold/precious metals funds over the years. In the wayback years.........well, I better not tell ya.
I don't recall a RSI of 13.6 for much of anything since 2008. A reading of 30 or less is considered a nominal low point for "watching" and a reading of 70 is moving towards the overbought area.
'Course, sometimes these trends have longer legs; not unlike a value stock/fund in a downdraft and the value continues to improve, except for those invested at a higher price.
But, as I posted on Sunday; many sectors in the broad commodity sectors are quite weak. Perhaps the big money is getting ready for an unwind and then a short term profit run.
Ya won't always be bitten by a barking dog; but caution should be observed as shown next, plus or minus a small blip:
NUGT today = -32%
DUST today = +31%
GDX chart, 1 year
Take care,
Catch

When I have been asked about various investment products or vendors, I always attempt to get these "folks" to do their own work/research, too.
Too many friends/relatives I have talked with over the years are too lazy; in spite of the fact that they were good enough to have saved monies to invest and that expressing to them that you worked hard for this money and this money should work hard for you going forward, they don't even want to ask some simple questions about how much of their invested monies with vendor "x" would be their NET return.
A recent example is brothers (beneficiaries) whose mother passed away and the account was evenly split into active accounts from this money for the brothers. None of the investment holdings were changed; the "advisor" only sent letters showing the investments and values once each month. The advisor never sent an introduction letter explaining his fees or methods for "deciding" what would be proper investment areas.
Four of the 5 brothers have kept their accounts in place. One asked for the account to be closed and the monies be moved into a credit union account to be used or invested as desired. I asked about the management fee and what discussion had taken place as to whether the investments for the remaining 4 brothers was suitable to and for them.
They, of course; didn't know. Apparently the advisor fee is 1% of total account value, transaction fees(?) and they're not sure how to decide about investment areas and remain at the "whim" of the advisor. Two of these folks are very "tight" with their spending habits (stuff on sale, coupons for grocery shopping, etc.), but won't take the time and the infomation offered via the internet to get an "idea" of what to do. Guessing their time is limited after clipping coupons.
Example two is for 2 young men (25-30 y.o.) I encountered a few years ago. They worked for an insurance company and were selling their products and approached me. They briefly explained this and that. I asked about a variable annuity (no life insurance frills, etc.) offering and whether they had a cost/fee schedule in plain wording. Well, no........but............ I explained (all I knew about from the top of my head) that I was aware of a variable annuity product from Fidelity that allowed for investments in 57 active managed mutual funds and that my cost would be the E.R. of the mutual fund, plus an annual fee of .25%. How do your similar products measure against this? Well, they were not able to provide any data of value. I am sure they wanted their foot inside my money door to "help" me with their products. But, for every one of me; there will be 99 others with few questions and these 2 salesmen likely will sell something to a few of them.
Lastly, one could hope for a "plain black on white", 1 page form of all expenses one will encounter doing business with person "x" for investment product "y".
One hopes that enough folks with needs and help in this area happen to have a decent person hold their hand through an investment process. I do not begrude anyone "making a living" with helping folks with their investments. It is indeed a special area of knowledge that too few folks have any clue.
I suspect many here field questions about investments, from friends and family.
I/we, at this house, are glad we are a tiny bit smart in this area; and have the "devil's advocate" questions at the ready. One can not expect the proper answer without the proper question.
Just my inflation adjusted 2 cents worth of jabber.
Catch