I worked for 50 years, I guess "interesting' is one way you could describe it!

IMHO, market neutral funds may or may not work in bear markets. Emphases on may not. And they surely do not in any other market. Hence, no need for any fund called market neutral. They all sport different magic and any of the processes used in these funds only work under specific conditions. Any other condition deems them useless. A marketing scheme for the tepid investor. If you don't believe they are a marketing scheme, count the number of these funds today versus 5 or 6 years ago.

HKMNX has been in existence only 2 or 3 years.
Is this some game these fund managers play?
Launch a fund and hope you hit the market "just right" and the fund rockets higher. Hot money pours in and propels it higher still?
But ... should you instead lose a couple % ... they kill you off?
What a sham! From management's standpoint it amounts to simply rolling the dice repeatedly until you hit it just right and "investors" (I use the term loosely) take the bait.
Another reason not to like these go anywhere funds.

"The Board of Trustees of the Birmiwal Investment Trust......has concluded that due to the relatively small size of the Fund, it is in the best interests of the fund and its shareholders that the Fund cease operations."
The fact that BIRMX has lost 55% of its value while the S&P 500 index has doubled over the past five years couldn't have something to do with it, could it ??
Just asking.

You are correct about the foreign holdings in FLPSX and that it doesn't always track exactly with a US mid cap index. In my situation, I have foreign holdings covered in other funds such as ARTGX, FMIJX and a smaller stake in GPROX, which is in a tax-deferred account. PGVFX is a pretty interesting fund with low turnover and low tax cost ratio. It did have two very bad years in 2007-2008 but has turned around nicely since then.

Once or twice a year, I try to find something comparable to FLPSX and fail (at least according to the metrics that matter to me, such as cost, portfolio, etc).
The portfolio is value-leaning, non-large cap, low turnover (12%), 1/3 foreign. IMHO, it's that last factor that explains the relative underperformance the past few years. It's a global stock in all but M* classification. Which is not a bad thing if that's what you want. For that sort of fund, it's doing quite well.
I think I finally did find a possible alternative. Polaris Global Value (PGVFX). But here's the thing - it is classified a global stock, and is somewhat more heavily foreign weighted (60/40 foreign/domestic).
Having more foreign stocks, it doesn't match FLPSX in performance - but it does tend crudely track the same performance curve, and it helps if one wants/needs a bit more foreign exposure. (Since domestic stocks have been outperforming foreign ones, a person's portfolio could easily have tilted "too much" toward domestic.)
It's more tax efficient (both relative to FLPSX, though this may be because it is still sitting on losses from 2008-2009 (per website). On an absolute basis), it falls into the same mid cap value box (though with slightly higher average market cap). Same low turnover (14%).
This has been a fund on my radar for years, but I always considered it too expensive (and in the past have been disinclined to buy global funds). But it has temporarily lowered its ER (it remains to be seen whether the temporary reduction will be renewed).
Finally, unlike FLPSX, one can benefit here from a foreign tax credit. The rule is that if a fund's portfolio is more than 50% foreign, then the fund is allowed to pass the foreign taxes through to you. FLPSX, at 1/3 foreign, can't do that. (Funds are not required to pass through the taxes, but they usually do.)
Just an offbeat thought on a replacement or complement to FLPSX. I'd say it was thinking outside the box, but part of the appeal is that it falls within the same style box.

+1 to msf. I would leave well enough alone, suck it up in April, and certainly not bail on Danoff and Tillinghast based on the last few years, nor even necessarily switch from Fido to Vang (though the CG points are noted). But your position is popular among some, even in the 15% bracket, and I recognize that this might sound argumentative.

Hi David - I appreciate your comments even though I may not agree with all of them. Let's take FLPSX, for example. Tillinghast is very well respected as we all know. However, he is slowly easing away from managing this fund and will not be there forever. If you compared FLPSX with a Vanguard Mid Cap Index fund, say VIMAX, then Tillinghast's fund loses on tax adjusted returns over the 1, 3, 5 and 10 year time periods. Not bad for an index fund. FLPSX loses to VMVAX as well although the latter is a newer fund. Both index funds are more tax efficient as well. UMBMX doesn't come close to either index fund in terms of tax-adjusted returns.
I am in the 25% tax bracket, BTW.

+1 to msf. I would leave well enough alone, suck it up in April, and certainly not bail on Danoff and Tillinghast based on the last few years, nor even necessarily switch from Fido to Vang (though the CG points are noted). But your position is popular among some, even in the 15% bracket, and I recognize that this might sound argumentative.

Thanks for the reply, MSF. Some of the funds I've mentioned have had a record of paying out big distributions, such as FLPSX and UMBMX. Neither one of those funds have performed well over the past three years, either. FCNTX was particularly bad this year as well with a huge distribution. My point is that I would rather settle for slightly lower returns and not get hit with big distributions rather than the other way around. That's just my preference. With the size of my portfolio, I don't need to hit home runs with funds - singles or doubles will suffice. What I don't like is cutting a larger tax check than necessary every April 15.
Your points are well taken and I will certainly take a look at some of those Vanguard ETFs and indexes.

Keep in mind that this year is a bit unusual in terms of distributions.
2013 was a fantastic year. If funds were still sitting on realized but undistributed losses going back to 2008, they all but surely used them up that year. (Funds are required to distribute substantially all of their net gains each year, but if they have losses, they can't distribute them. Instead, they are allowed to use them against gains in future years - I believe for up to ten years.)
Follow that with an above average 2014 (domestically, anyway), and you've got the makings of disproportionately large distributions. It pays to keep things in perspective. For example, FMIJX (FMI Int'l) is in the 2nd percentile for 3 year after tax returns (excluding this year). And this is a very concentrated fund (29 stocks, plus some other securities) - do you want to replace it with a fund that has a gazillion holdings?
Don't overreact to one year's taxes and lose sight of the objective - net return, not minimizing taxes. The latter is easy - don't make money.
If you sell your shares, you'll wind up paying more taxes now (gains on the shares). If you want to make some moves, you might consider taking the distributions in cash, and investing them in newly selected funds.
I would be more inclined to use Vanguard than Fidelity for broad based stock index funds. They tend to have lower cap gains distributions (e.g. Spartan 500 made cap gains distributions this year and in 2007), Spartan Total Market made cap gains distributions in 2007-2010). You don't see these in the Vanguard funds. (Also, the Vanguard funds have ETF shares, so they have the tax advantages of an ETF, with no bid/ask spread.)

Dear MJG,
As you know, I don’t practice traditional diversification. So, for me,
this has been a good year – just being long the market.
Recently I read some adviser’s comments regarding this year’s
market active that echoes this article. He said something like -
“If a portion of your portfolio is not losing value, you’re not diversified.”
(Since that’s not a direct quote, I don’t know if it needs parentheses.
One of these days, I’ll have to learn that.)
While this philosophy may satisfy the average low-information
retirement investor, to me it seems a bit like a circular
firing squad or antiperistalsis.
As to your previous posting regarding Rotholtz -
I don’t take exception to “universal rules” and don’t believe that
these congeries are wrong or irrelevant.
However, a summation of these rules and others like them always
proves to be the traditional advice - be a conservative, diversified,
long-term investor.
To me, diversification is like making an “exotic” wager at the
house track.
In this case, your portfolio is your bet.
“Exotic wagers allow you to make multiple bets on multiple horses
in a single wager. Exotic wagers are generally much more difficult
to win than straight wagers, require an advanced degree of skill
and knowledge in horse picking, and are more expensive.
However, the payoffs on exotic wagers are much greater
than straight ones.”
Yes, the potential rewards can be greater – but the odds are against you.
So, I prefer taking the odds rather than laying them.
Or, as my brother-in-law says, “You may have three balls in the air
at the same time, but that doesn’t mean that you’re juggling.”
As to the long-term, I prefer to manage the short term and
let the long term take care of itself.
All of which means that I’ve been touting indexing to my students
for nearly 20 years and ETFs for maybe 10 years. And, of course,
moving averages.
While I still have your attention, I want to thank you for your
high standard of comments over the years.
Best wishes,
Flack

@Skeeter:
Good call Skeet. I remember it. I hope I gave no advice back than. It would have been wrong - in the near-term anyway.
My thinking remains that, as alternative strategies go, these guys have a good longer term track record and should be given some slack. I don't like or invest in these go-anywhere funds - but if I wanted one as a longer term hold (measured in decades not years) I'd select this one. When money washes out in torrents, as it has with this fund, it distorts the investing process for the managers and amplifies the losses. In the end, the blame falls on the managers for not restricting inflows. I wish there was a way to quantify the degree of impact on a fund such "hot" money has both on the incoming side and the outgoing side. I'd think it's a substantial impact.
-
BTW: The board represents a wide variety of investing styles and philosophies. I learn from all. We're much more focused on not losing $$ than on making it. We're nearly 20 years into retirement and pull distributions directly from our "mishmash" of mutual funds. Over the years we've gravitated more and more to the conservative hybrids like TRRIX- but still make occasional small sector bets as I've done on energy/natural resources this year. Stability is very important and we view diversification as key to protecting our nest egg - though it sometimes means sacrificing near term performance.
-
Thanks for all your great contributions over the year Old Skeet. I very much respect that you have a plan founded on fundamentals that works for you and are willing to share with the rest of us.
My New Year's Resolution? ..... Not to give any investment advice!
:)

BINGO!
Among alternative strategy funds, HSGFX may boast the most consistent performance. 9% annual losses 3 years running. Negative for 10+ years. Try funding your retirement on that.
Definition of Insanity: Doing the same thing over and over - and expecting different results.

FYI: It’s been one of the worst years for investment decisions on record, almost across the board. With some help from Charles Dickens, let’s take a look at what we experienced.
Regards,
Ted
http://fortune.com/2014/12/24/investing-year-review/

I own BWLAX, American Beacon Bridgeway which is a large cap value fund and I am well pleased, thus far, with its performance. It is available in other share classes and the no sales load thicker is BWLIX. You might want to do a performance analysis between BWLIX and BRLGX. Over the past ten years (period of time) BWLIX edges out BRLGX.
I have lniked its Morningstar report for those that might be interested in taking a look.
It is rated five stars by M*.
http://quotes.morningstar.com/fund/f?t=BWLIX
BWLAX is held in the growth area of my portfolio in my large/mid cap sleeve and is one of six funds held within this sleeve; and, it accounts for just short of ten percent of the sleeve's value.
Old_Skeet

I think Bridgeway is the best quant shop out there available to retail investors. The main manager, John Montgomery, treats investors very well. I'd look at BRAGX, their flagship, go anywhere fund too. BRAGX, like the other funds in that family, including BRLGX, had a couple of disasterous years in their but great long-term records.
If you look at Bridgeway's web site, you'll see it has tons of literature and they do say explicitly that they believe (contrary to some recent theories) that higher volatility is necessary if you want higher rewards.
If you like quant funds, or want at least one for diversification. I would seriously consider Bridgeway, either BRLGX if you're lacking large growth or BRAGX, but then you'll have to prepare for a bumpy ride.

In fact, PYSAX has a VERY good history, since its manager David Glancy was the manager of Fidelity Leveraged Stock FLVCX during its glorious first 4 years. It was not doing well last year though...

I have PYSAX (load waived through Schwab) for my mid/large growth. It does not have quite that long history, but has done very well since its inception a little over five years back. A little different animal though.

FYI: Look around you: This is the time of year when the pages of newspapers and magazines are filled with predictions and lists and all manner of money-losing nonsense. I have pushed back against much of this silliness in these pages over the years.
Regards,
Ted
http://www.ritholtz.com/blog/2014/12/the-basic-simple-truths-of-investing/print/

>> not many funds have beaten the SP500 3% annualized for the past 20 years.
Correct, not many, though you mean 19y, right?
FLPSX is one. There may be some Vanguard likewise.
One thing that is interesting is that it began its 08-09 dive a full year prior, oddly. It is since the bottom (spring 09) that it has raced past everyone. Even FLVCX, amazingly. But that is only 5.5y.