I'm not surprised with the inbound money flow as last week XLK became a member of Old_Skeet's lead pack and this week became the lead hound within my 500 Compass.

Hello,
For the week ending March 9th Old_Skeet's market barometer closed the week with a reading of 146 indicating that the S&P 500 Index is in the lower range of fair value. In review the three major feeds within the barometer there is an earnings feed, a breadth feed and a technical score feed. Generlly, a higher barometer reading indicates there is more investment value in the Index over a lower reading. Last week the barometer closed the week with a reading of 151 placing it in the upper part of fair value. In following the short interest for the Index the days to cover have risen from 1.1 to 1.9.
Within Old_Skeet's 500 Compass the lead pack consist of XLF (financials), XLY (discretionary) and XLK (technology) which has become the new lead hound. Since, XLY remains a member of the lead pack it continues to be the spiff hound. Should it falter and fall from lead pack status then the spiff will move to a new hound.
Within Old_Skeet's Global Compass the lead pack consist of AXJL (Asia ex Japan), GSP (commodities) and EEM (emerging markets) continues to be the lead hound and carry the spiff.
Recently, I was asked what my third spiff would be? Currently, I am not running a third spiff. But, it would come from my Style Compass if I were to have one. But, since LCG (large cap growth) is the lead hound within this compass and I have ample coverage in the LCG category I've elected not to have a special investment position coming from this compass.
Within Old_Seet's Style Compass the lead pack consist of MCG (mid cap growth), SCG (small cap growth) and the lead hound is LCG (large cap growth).
In the not to distant future it will be time for Old_Skeet to close up shop and close all spiffs. My spiff strategy is a seasonal one that begins in the fall (as the leaves fall) and runs to around spring (as the trees beging to bud) unless market conditions warrant otherwise. Usually during the off season I move my spiff money to either cash or bonds. Most likely this year it will become part of my cash allocation because of the anticipated rising interest rate environment.
Thanks for stopping by and reading.
I wish all ... "Good Investing."
Old_Skeet

FYI: Fixed indexed annuities can do a better job of de-risking a portfolio for older investors than bonds, according to Roger Ibbotson, chairman and chief investment officer for Zebra Capital Management, an independent investment management firm based in Milburn, Conn.
Regards,
Ted
https://www.fa-mag.com/news/fixed-income-annuities-beat-bonds-for-retirees--researcher-says-37575.html?print

I've tried to describe the fund conceptually in terms of major building blocks. To come up with an explanation of its performance entails starting with a much more detailed model and then using trial and error to find a proxy bond fund that might adequately match the performance of the bonds in the portfolio.
I'm not going to go through that exercise. But I will give you some idea of other factors involved.
According to a page on DoubleLine's company website (I haven't found this detail on the DoubleLine fund site or in the fund's prospectus), the swaps used require collateral. (Generically speaking, some swaps do, others don't.) Here's the image from that site showing the need for collateral
Contrast that with the image on the fund's fact sheet that omits mentioning the need for collateral. Contrary to the image above the fact sheet states that 100% of the money invested (not just a remainder) goes into the fixed income portfolio. Since the prospectus also omits anything about using collateral, it obviously doesn't say how much collateral is needed.
So now there's a new factor (collateral) to include, one that comes alone with an unknown value (collateral percentage). FWIW, MWATX, which uses futures not swaps, typically puts up 4%-5% of the value of the derivatives as collateral (according to its prospectus). If DSEEX is using 5% collateral, then the remaining 95% of the amount invested is being invested in bonds. So one would multiply the performance of the proxy bond fund by 95%. In reality, we not only don't know an appropriate bond fund to use as proxy, but what scale factor should be used.
Then there are the carrying costs for simply holding the swaps. That appears to be the "financing rate", which is different for each swap, but tends to run in the 0.40% - 0.47% range. At least those are the rates shown for the swaps in the latest semiannual report, which is now almost six months old. So some average rate in that range needs to be subtracted from the CAPE (swap) rate of return.
Next up are the costs of acquiring the swaps. Some, like brokerage fees, can be extracted from the financial statements. Others, according to the prospectus, are simply not disclosed:

investment-related expenses not shown in the [fund expense] tables include brokerage commissions and undisclosed markups on principal transactions, which reduce the return on your investment in a Fund and may be significant. ... In cases where a Fund enters into a swap transaction or certain other transactions based on an index, the transaction pricing will typically reflect, among other things, compensation to the counterparty for providing the investment exposure. The transaction pricing also may reflect charges by the Index sponsor for the use of the Index sponsor’s intellectual property and/or index data (“Intellectual Property”) in connection with the transaction. These investment-related costs may be significant and will cause the return on a Fund’s investment in a swap transaction or other transaction based on the index to underperform the index. The terms of these transactions may change over time, potentially in response to market conditions, without notice to shareholders.

As with the carrying costs, simple subtraction is the best way to account for these other expenses. Say they totaled 2%/year, then 2% would be subtracted from the fund's expected return. I pulled that 2% figure out of the blue for a placeholder; I've no idea what these other costs total at any given point in time (the prospectus says they vary over time as well).
Finally, I'm not clear why you elected to use a PIMCO fund as a bond proxy; I might have tried out some DoubleLine funds first.
Personally, I'm content with my level of understanding of this fund, though I can appreciate the interest in proving out a model by getting numbers to match.

>> So DSEEX may not resemble balanced funds so much as equity funds with "a little extra"
Yes, this not-really-like-hybrid take is the nut I return to, and always underlies my original bond queries. To return, empirically, to performance: since DSEEX inception, it is close to impossible to find any period where a combo of any proportion of CAPE and PDI (to choose probably the most aggressive and successful of the opaque Pimco offerings, although it is CEF with a premium) does as well as DSEEX.
As puzzling, the last year-plus its bond portion has "detracted," meaning that since 4-5/17, CAPE has marginally outperformed DSEEX.
Also not seeing that it is truly more volatile; as I noted earlier, its swings do not to me appear to be more dynamic, and its UI per MFO Premium is the same as steady TWEIX.

investing in DSEEX would give similar diversification to a vanilla hybrid fund that had a roughly 50/50 stock/bond mix. The difference is one of magnitude of performance (i.e. getting hammered harder).

You know @msf, when I made the statement that I look at DSENX as a kind of balanced fund a couple years ago, I was hammered pretty good here with "no it is not, you can't think of this fund that way". So I'm glad that you investigated enough to say yeah, maybe it is, albeit a more volital hybrid than what we think of as a typical balanced fund. You explained it very well.

While I agree that New Insights is the inferior fund, FINSX carries a lower ER than FCNTX and can be purchased with a $2500 min, no advisor and no load, through Vanguard and TDAmeritrade.

@msf, MWATX "alpha" over the S&P 500 TR shown here is pretty impressive:

Not the case during the this 2.5 year time frame (Mar 2008 - Sept 2010) when MWATX experienced a 16 percent deeper trough than the S&P 500 TR:

Seems like MWATX's alpha can and did go awry. DSEEX may possess similar characteristics.

With all the people here who are skeptical of M*'s classifications, I think you just lobbed everyone a softball :-)
More seriously, it might depend on how the bond portfolio is being used. Also, DoubleLine and PIMCO tend to be especially opaque, and in DoubleLine's case somewhat unresponsive to M*. So it's not easy to pidgeonhole the bond side of the fund.
One way to use the bond portion of the portfolio is to eek out a little higher return. If the objective is to simply generate enough income to cover the ongoing expenses of owning the swaps plus a little more, you've basically got an equity fund with a small twist. On the other hand, if the objective is to manage the bond side as, say, a full blown total return portfolio, then the fund looks more like a leveraged balanced fund.
For example, MWATX invests in short term bonds (average duration under three years). It's just trying to beat the S&P 500 index, hence the name AlphaTrak 500. Somewhat in contrast, DoubleLine says that DSEEX is invested in bonds for "additional long term total return" (from prospectus).
Regardless of what the prospectus says, the fund in fact might be investing more conservatively, closer to the AlphaTrak model. A year ago, LLJB commented that the bond portfolio was (then) shorter duration and higher credit quality than DBLTX.
A typical balanced fund holds a bond portfolio that aims for higher return than that. It will use a longer (intermediate term) duration or lower credit quality, or both. So DSEEX may not resemble balanced funds so much as equity funds with "a little extra".
Or, M* may just have gotten lazy. Your guess is as good as mine.

FYI: For the year through March 7, Fidelity Investments' Will Danoff and John Roth have deftly ridden such stocks to a nice 6.22% gain in the fund they manage; $28.5 billion Fidelity Advisor New Insights Fund (FNIAX). That compares with the S&P 500's 2.35%.
Regards,
Ted
https://www.investors.com/etfs-and-funds/mutual-funds/investment-strategies-fidelity-will-danoff-2018-stock-market-trends/
M* Snapshot FNIAX:
http://www.morningstar.com/funds/XNAS/FNIAX/quote.html
Lipper Snapshot FNIAX:
https://www.marketwatch.com/investing/fund/fniax
FNIAX Is Ranked #41 In The (LCG) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/large-growth/fidelity-advisor-new-insights-fund/fniax

@msf
>> investing in DSEEX would give similar diversification to a vanilla hybrid fund that had a roughly 50/50 stock/bond mix. The difference is one of magnitude of performance (i.e. getting hammered harder).
I now see where you get this notion from, it is a fascinating idea, and their language does seem to encourage that. So why does M* not classify it differently? And why does it not show significantly greater swings, outperformance aside, than say PRWCX?
(Or maybe it does; am just now trying to compare it with w/ PRWCX, FBALX, ICMBX, and other of the more aggressive balanced entities.)

https://www.sec.gov/Archives/edgar/data/1691994/000114036118012737/form485apos.htm
(formerly City National Rochdale Emerging Markets Fund)

KWEB (Chinese Internet) since inception has been a bit more volatile than PNQI, but equally as impressive:

@TSP_Transfer posted in January 2014 that MFMPX was available load-waived at Schwab and TDA, so load waivers on Morgan Stanley funds go back at least that far.
https://mutualfundobserver.com/discuss/discussion/comment/34581/#Comment_34581

Wondering about the status of SPHD, which seems to be getting pummeled YTD (-6.5%) because of its holdings in Utilities, Real Estate and other interest-sensitive stocks. I have built up pretty large cap gains since I bought it a few years ago. It's definitely in the wrong sectors right now, especially compared to something similar like SCHD. Opinions about SPHD?

Dividend stocks tend to ebb and flow, so I assume funds focused in this area do the same. I would tend to stay the course here.
I plan to add to an existing SCHD position when rates settle at their ultimate higher levels, but that might be a year or so from now. I've looked at SPHD, but that duplicated individual divi payers in my portfolio. As you noted, there's quite a bit of a downtrend in this space, but the divi's are what I'm looking for as I'm in the distribution phase.
A fund I plan to add in the future which has gotten a bit of discussion on this board is PMAIX. It has a nice global allocation, with a good dividend. It's also held up pretty well with the initial rate spikes. I'm watching to see if this continues. It might be worth a look.

CAPE cannot be traded at ML and maybe not at some other brokers, not sure, which irks me.

Looking at comments on other boards, it seems that Merrill Edge generally blocks online trades of any ETN. Nevertheless, you can trade ETNs there, or so says a poster in this M* thread.
The catch is that you have to call a Merrill broker to do it. Or you can go elsewhere to buy the ETN for a few bucks, such as $4.95 at Schwab or Fidelity. CAPE is available online at both.
Note that brokers often block sales of a few higher risk securities. Here's a 2016 article talking about restrictions imposed by Fidelity, Vanguard, and TD Ameritrade:
http://www.investmentnews.com/article/20160623/FREE/160629978/fidelity-blocks-opening-trades-on-several-etf-products-citing

I would think that investing in DSEEX would give similar diversification to a vanilla hybrid fund that had a roughly 50/50 stock/bond mix. The difference is one of magnitude of performance (i.e. getting hammered harder).
In DSEEX, you get full exposure to CAPE. That means that if $10,000 invested in CAPE were to drop 10%, losing $1,000, then you'd expect a $10,000 investment in DSEEX to similarly lose $1,000 before even looking at the gains or losses on the bond side.
That $10,000 investment in DSEEX, aside from getting you stock exposure, buys nearly $10,000 worth of bonds in the fund's portfolio. If bonds drop 4%, your $10,000 worth of bonds lose $400.
So the $10,000 investment loses $1,000 + $400 = $1400.
This is as one would expect:
100% stock exposure x $10,000 x 10% loss + 100% bond exposure x $10,000 x $4% loss
= $1,000 + $400
= $1400
= (10% + 4%) x $10,000 = 14% x $10,000.
In the vanilla 50/50 hybrid fund, that $10,000 invested buys $5,000 worth of "real" stock and $5,000 of bonds. When stocks decline by 10%, the $5,000 worth of stocks drops $500 in value. When bonds decline by 4%, the $5,000 worth of bonds drops $200 in value.
So the $10,000 investment loses $500 + 200 = $700.
This too is as one would expect:
50% stock exposure x $10,000 x 10% loss + 50% bond exposure x $10,000 x 4%
= $500 + $200
= $700
= (50% x 10% + 50% x 4%) x $10,000 = 7% x $10,000.
Note that DSEEX is likely not providing the full 200% exposure (100% to CAPE, 100% to bonds), but it's still a reasonable approximation. DoubleLine writes that while: "Each $1 investment seeks to obtain $1 of exposure to the CAPE® Index ... and $1 of exposure to the underlying portfolio of bonds ... market fluctuations likely will preclude full $1 for $1 exposure between the swaps and the fixed income portfolio.

Right, tnx; I was misunderstanding (misreading) "2x" as something more than, or at least other than, double-whammy.
So are you thinking that double-drop would mean necessarily greater DSEEX hammering than OAKBX / FPACX / DODBX / PRWCX? I am over half in DSEEX and 25% in PONDX and other Pimco, and am ever curious about lack of true diversification.

FYI: Stocks rose in afternoon trading Thursday on the back of a report that Canada and Mexico will be exempt from proposed tariffs on steel and aluminum imports.
Regards,
Ted
Bloomberg:
https://www.bloomberg.com/news/articles/2018-03-07/asia-stocks-set-to-gain-as-u-s-shares-pare-drop-markets-wrap
Reuters:
https://www.reuters.com/article/us-usa-stocks/wall-street-treads-water-ahead-of-trumps-tariff-decision-idUSKCN1GK1OI
MarketWatch:
https://www.marketwatch.com/story/nasdaq-set-sights-on-5th-win-in-a-row-as-spotlight-stays-on-tariffs-2018-03-08/print
IBD:
https://www.investors.com/market-trend/stock-market-today/stocks-rally-late-as-trump-trade-tariffs-exempt-mexico-canada/
CNBC:
https://www.cnbc.com/2018/03/08/us-stock-futures-dow-data-ecb-earnings-and-politics-on-the-agenda.html
AP:
http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2018-03-08/your-evening-briefing
Curriencies:
https://www.reuters.com/article/global-forex/forex-euro-falls-as-ecbs-draghi-rings-cautious-note-idUSL5N1QQ5RS
Bonds:
https://www.cnbc.com/2018/03/08/bonds-and-fixed-income-data-ecb-decision-tariffs-on-the-agenda.html
Gold:
https://www.cnbc.com/2018/03/07/gold-markets-investors-await-trump-tariff-plan-details.html
Oil:
https://www.marketwatch.com/story/oil-prices-steady-after-us-output-climb-helps-drive-plunge-2018-03-08/print
WSJ: MarketS At A Glance:
http://markets.wsj.com/us
SPDR's Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
SPDR's Bloomberg Sector Performance Pie Chart:
https://www.bloomberg.com/markets/sectors
Current Futures: Positive
https://finviz.com/futures.ashx
Quote

Yes. For instance, while the S&P 500 was busy dropping 10% between Jan 26 and Feb 8, CAPE dropped 9.07% (from 125.85 to 114.44), AGG (pick your own proxy for DSEEX's bonds) fell 1.06% (using Yahoo's adjusted closing prices of 107.98 and 106.84).
In that same stretch, DSEEX fell 10.04% (using Yahoo's adjusted closing prices of 16.54 and 14.88). That's about as close to an exact sum of the two markets (using CAPE, not S&P 500) as you can get. Both markets dropped and DSEEX dropped accordingly.
Since the stock market has until recently gone straight up during DSEEX's lifetime, there aren't many stretches where both bonds and stocks have fallen together.