FYI: Lately, commodities have performed so poorly investors would be forgiven for thinking people no longer need anything to eat, drink, or fuel their cars—just iPhones and subscriptions to Amazon Prime. In the past five years, the average commodity mutual fund has lost 8% a year, while the S&P 500 has gained 10%.
Worse, even when commodity prices have gone up, most commodity funds have failed to fully capture those gains. A phenomenon known as “contango” has been a drag on fund performance. Investors rarely buy commodities directly, instead favoring futures contracts, which are derivatives with expiration dates. Contango occurs when a commodity future’s price is above the current or spot price, so that every time a contract expires, investors must pay more for a new one.
Regards,
Ted
https://www.barrons.com/articles/if-commodities-day-has-come-this-fund-should-be-a-winner-1543496400?refsec=funds
M* Snapshot JCRAX:
https://www.morningstar.com/funds/XNAS/JCRAX/quote.html
Lipper Snapshot JCRAX:
https://www.marketwatch.com/investing/fund/jcrax
JCRAX Is Unranked In The (CBB) Fund Category By U.S. News & World Report:
https://www.marketwatch.com/investing/fund/jcrax

FYI: There no longer can be any doubt that the creation of the first index mutual fund was the most successful innovation—especially for investors—in modern financial history. The question we need to ask ourselves now is: What happens if it becomes too successful for its own good?
The First Index Investment Trust, which tracks the returns of the S&P 500 and is now known as the Vanguard 500 Index Fund, was founded on December 31, 1975. It was the first “product,” as it were, of a new mutual fund manager, The Vanguard Group, the company I had founded only one year earlier.
Regards,
Ted
https://www.wsj.com/articles/bogle-sounds-a-warning-on-index-funds-1543504551

FYI: Investors may be thrilled that U.S. stocks have rallied, pushing the S&P 500 to a 4.4% total return for the year, including dividends, as of the close on Wednesday. But the good times probably won’t last, according to Rob Arnott, founder of the investment research firm Research Affiliates and co-manager of funds such as Pimco All Asset All Authority (ticker: PAUAX).
Regards,
Ted
https://www.barrons.com/articles/sell-u-s-tech-stocks-buy-emerging-markets-says-rob-arnott-1543516901?mod=djem_b_Weekly barrons_daily_newsletter
M* Snapshot PAUAX:
https://www.morningstar.com/funds/XNAS/PAUAX/quote.html

FYI: Over 70% of financial advisors surveyed believe it's going to take a significant correction in the equity markets to wake all investors up to the portfolio benefits of fixed income investing, according to a new survey released today by Incapital LLC, a leading underwriter and distributor of fixed income securities.
Regards,
Ted
https://www.businesswire.com/news/home/20181129005552/en/Significant-Correction-Equities-Wake-Investors-Benefits-Fixed

"Most brokerage firms have found a subtle way to squeeze money out of their customers. The trick: switching their sweep accounts from higher-yielding money market mutual funds to lower-yielding bank accounts."
Kathleen Pender has an interesting article in the San Francisco Chronicle on yet another way many brokerages have found to short-change you.

How can a strategy said to be market neutral plunge 13-15% YTD?

It’s been an especially rocky and nasty year for most hedge-type funds. In fact, they haven’t done well for many years. And the big hedge funds have experienced huge outflows this year. I don’t pretend to understand it. But there might be more at work here than simply “stupid managers.” High fees for sure. But, possibly, “insane” markets as well based on unsustainable increases in a few large indexes (ie - the elephant chasing his tail).
-
Edit: A couple added late-night thoughts:
- Some hedge funds (including so called market neutral funds) may be betting on an eventual break in the unusually strong Dollar. This might involve holding gold or EM bonds - both of which have slumped sharply since the beginning of the year (explaining some of their dismal showing). The reasoning behind this is that the Fed will “blink” after U.S. equity markets have turned down and stop raising rates. I think they’re right in that assumption - but it’s hard to say when that will happen. BTW - Ray Dalio of Bridgewater is one hedge fund manager who is hedging with gold.
- I think the term hedge fund as a style makes more sense than market neutral. If you want a truly “market neutral” approach - go 100% cash. Excepting that extreme, don’t know how you can remain truly neutral.

FYI: Guggenheim Total Return Bond boasts a compelling strategy and stellar record but has historically produced more risk than most peers with a record modest in length and untested in a major crisis. Staff turnover and tenure give reason for pause. The fund carries a Morningstar Analyst Rating of Neutral.
Regards,
Ted
https://www.morningstar.com/articles/902797/why-we-dont-recommend-this-5star-bond-fund.html
M* Snapshot GIBIX:
https://www.morningstar.com/funds/xnas/gibix/quote.html
Lipper Snapshot GIBIX:
https://www.marketwatch.com/investing/fund/gibix
GIBIX Is Unranked In The (IB) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/intermediate-term-bond/guggenheim-total-return-bond-fund/gibix

They were great in the 2015-16 downturn in everything else, but bad news this time around.
Forget Asness, and onward through the fog.

Agree with @VF. How can a strategy said to be market neutral plunge 13-15% YTD?

FYI: Below is a look at the percentage of total world stock market cap that each country’s stock market makes up. For each country, we show its percentage of world market cap as of today, as it stood on 9/20 when the S&P 500 made its last all-time high, as it stood on election day 2016, and as it stood 10 years ago.
The US currently makes up 39.81% of world stock market cap, which is more than 30 percentage points more than the next closest country — Japan — at 7.76%.
Note that Japan has moved into second place after being well behind China in November 2016. While the US has gained more than 3 percentage points of global market cap share since Trump was elected, China has lost a significant amount — falling from 10.21% down to 7.54%. At least based on this measure, Trump’s trade fight with China has benefited the US at the expense of China.
Hong Kong remarkably makes up 6.75% of world stock market cap, which is well ahead of the UK (4.41%), France (3.14%), Germany (2.83%), and Canada (2.74%).
Since the 9/20 peak for the S&P 500, the US has lost 0.49 percentage points of share, while China, Hong Kong, and Brazil have seen the biggest gains, so things have tightened a little bit between the US and China during the recent sell-off here in the US.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/country-stock-markets-as-a-percent-of-world/

@ 09:51 PST- Fine here also.

Royce funds have been a train wreck the past few years.
The fund thats closing ROIMX has attracted just 6.5 million dollars of assets in its 8 year existence , And is down 18.6% YTD.
Matter of fact, 16 of the 17 Royce Mutual Funds are down YTD.

FYI: One of J.P. Morgan Asset Management’s largest mutual funds is betting junk bonds will help shelter it from the trade war.
The firm’s $49.6 billion Global Income Fund has slashed its equities exposure to 31 percent at the end of October from 43 percent at the beginning of the year and put part of the proceeds into U.S. and European high-yield debt, according to co-manager Eric Bernbaum. The fund cut its stock holdings before the October sell-off, and turned to junk bonds where low default rates, declining leverage and strong fundamentals abound, he said.
Regards,
Ted
M* U.K.: Snapshot Of Fund:
http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000002HFH

For those of you who like to follow the action in this never-ending train wreck:
https://seekingalpha.com/article/4225020-tracking-bruce-berkowitzs-fairholme-portfolio-q3-2018-update?isDirectRoadblock=false
The cars have changed but the casualties continue to rise.

@BenWP
https://www.sec.gov/Archives/edgar/data/836487/000110465918063356/a18-36104_17497.htm
497 1 a18-36104_17497.htm 497
Summary Prospectus and
Prospectus Supplement
October 22, 2018
Morgan Stanley Institutional Fund, Inc.
Supplement dated October 22, 2018 to the Morgan Stanley Institutional Fund, Inc. Summary Prospectuses and Prospectuses dated April 30, 2018
Global Discovery Portfolio
Global Insight Portfolio
(each, a "Fund")
On October 17, 2018, stockholders of each Fund approved an Agreement and Plan of Reorganization by and between each Fund and Morgan Stanley Institutional Fund, Inc., on behalf of its series Global Advantage Portfolio ("MSIF Global Advantage"), pursuant to which substantially all of the assets and liabilities of each Fund would be transferred to MSIF Global Advantage and stockholders of each Fund would become stockholders of MSIF Global Advantage, receiving shares of common stock of MSIF Global Advantage equal to the value of their holdings in each Fund (the "Reorganizations"). Each stockholder of each Fund will receive the Class of shares of MSIF Global Advantage that corresponds to the Class of shares of each Fund currently held by that stockholder. It is anticipated that the Reorganizations will be consummated on or about November 19, 2018. The Funds expects to cease offering shares of all Classes of the Funds at the close of business on or about November 14, 2018.
Please retain this supplement for future reference.
IFIGDGIREORGSUMPROSPT 10/18

As of November 20, my TDA Roth account no longer holds MGDPX, but it has MIGPX. They are both global funds and have the same managers, but I did not want another LCG global when I first bought. Still waiting for an explanation of this notation in my transactions record for 11/20: " MANDATORY - EXCHANGE." Morgan Stanley's web site offers no help. I can't find updated pricing for MGDPX anywhere. The fund did make its hefty distributions on 11/15. I remain mystified.

https://www.sec.gov/Archives/edgar/data/709364/000094937718000265/trf-rmi497.htm
497 1 trf-rmi497.htm
The Royce Fund
Supplement to the Investment, Service, and Institutional Class Shares Prospectus Dated May 1, 2018
Royce International Discovery Fund
The Royce Fund’s Board of Trustees approved a plan of liquidation for Royce International Discovery Fund, to be effective on December 28, 2018. The Fund is being liquidated primarily because it has not attracted and maintained assets at a sufficient level for it to be viable. As of November 1, 2018, the Fund was no longer offering its shares for purchase and was not accepting any investments.
November 27, 2018
RMI-SUPP-CLOSE

@Ted, I'll bet you our local fare, the culinary masterpiece - Rochester's famous Garbage Plate versus a Chicago-style pizza, that the S&P 500 will be closer to 2600 than 3000 by year end :)

I think we're in agreement here. If one buys a "go anywhere" international fund that really does go anywhere, then one is delegating regional allocations. Then one should simply benchmark against a global ex-US index and not complain about the world regions it wanders into.
However, that's not the way many funds function. IMHO, the difference between a traditional balanced (60/40) fund and a moderate "allocation" fund is that the latter has a little more wiggle room to make tactical shifts. But it's still going to be meandering near that 60/40 "set point", and so should be benchmarked that way.
Likewise, if one picks an international fund that holds around 1/5 in EM, then one should keep that in mind when fleshing out one's portfolio. So long as the fund doesn't lose big relative to its set point allocation, then as you wrote, "that's fine".

FYI: Mike Wilson, the biggest equity bear on Wall Street whose prediction has proved prescient this year, has a similar outlook for 2019.
The chief U.S. equity strategist at Morgan Stanley forecast that the S&P 500 will end next year at 2,750, the same level he forecast for 2018. That’s about 3 percent above the index’s current level. With five weeks to go for the year, Wilson’s estimate is by far the closest of all estimates to coming true.
Regards,
Ted
https://www.bloomberg.com/news/articles/2018-11-26/analyst-who-nailed-2018-has-same-s-p-500-forecast-for-next-year?srnd=premium
His "On The Markets For November"
https://www.morganstanleyfa.com/public/projectfiles/onthemarkets.pdf