Hi @jerry and others,
I don't track a 60/40 but the 50/50 Index mix that I do track has had the following returns. They follow: 2012/9.96% ... 2013/17.31% ... 2014/5.60% ... 2015/0.54% ... 2016/7.04% ... 2017(ytd)/10.87%. The cumulative return for this period is 53.85% with the average being 8.98%.
The reason I use the 50/50 mix is that now in retirement I only move my equity allocation +/- 5% from its neutral position of 50% unless market conditions warrant otherwise. Years back I'd go +/-10% from the neutral position thus a 60/40 mix might be a better allocation for this adjustment range.
My cumulative return on my own portfolio for the above period has been 57.47% with the average being 9.58%. Some will ask ... Has it been worth it to be active? For me, it has been as it has put a good bit of extra cash in my pocket vs. running with a static 50/50 mix. Plus being a student of the market has been rewarding in of that itself.
In addition, I use American Funds' Capital Income Builder (CAIBX), my third largest holding, as my global hybrid fund bogey because of its global allocation and yield. Its cumulative return is 49.55% for the period with the average being 8.26%. My return over the 50/50 mix is about 6% and over CAIBX about 16%. Generally, I have found, higher yielding hybrid funds offer lower returns. And, my portfolio does kick off a good yield and has a global orientation. I also, use the Lipper Balanced Index as another standard.
In looking at a sampling of some of the funds listed in the article the two I looked at GSOFX & USMYX did not have the history necessary for a compairson. However, I did do one against KCMTX listed by Morningstar as a multialternative fund. I found it's cumulative return for the period to be 67.01% with the average being 11.17%. KCMTX is co-run; and, one of its managers Parker Binion has started posting on our board. Parker's handle is @PBKCM in case you did not, and would like to, know. Interestingly, I was asked (in another thread) by another poster as to why I'd be a buyer of this fund? It is pretty simple ... in spite of its expense ratio ... it is putting up some good numbers for a multialternative fund plus it is currently carrying 5 stars by Morningstar. Folks, it cost money to actively engage the markets. It also reminds me of two other funds I invested in early on (but, no longer own) one being Ivy Asset Strategy and the other being Marketfield. They got to the size where they could no longer effectively position in a timely manner with the ever changing market conditions. So, I let them go as their performance waned.
Below is a link to the Morningstar report on Parker's fund.
http://www.morningstar.com/funds/XNAS/KCMTX/quote.html
Notice it is ranked in the top 1% on the rolling 1 year return period ... top 2% on year-to-date returns ... top 2% on the 3 year period ... and, top 1% for the 5 year period.
For me, the big question is ... How did a good skilled seasoned writer such as John Waggoner miss by not including Parker's fund? Perhaps, Mr. Waggoner reads the board? And, will kindly make comment.
And, so it goes.
I wish all ... "Good Investing."

seems to me outperforming the S+P 500 is not the critical test but rather that they outperform a 60-40 over a decent period of time / If they don't why bother

Thanks for posting, @Ted. You do a great job of finding interesting articles!
As for judging mutual funds, YTD is a bit arbitrary and too short IMO, although I understand why John would use the metric in an article this time of year.
Personally, I like to take a weighted average:
5/9 * the 5 year return
3/9 * the 3 year return
1/9 * the 1 year return
Because all three have the 1 year return, it actually gets the most weight, but not ridiculously so:
Last year = 33%
2nd Year = 22%
3rd Year = 22%
4th year = 11%
5th Year = 11%

Wow...ICMAX...Almost 60% Cash, 20% Bonds...ER=1.4% while the 1 Yr Investor Return was 1.44%. ... investors spent $2.475 M in management fees to achieve a CD rate return of 1.44% ...

Wow. Sombody’s holding more cash than I am!
:)

Even the bear market deviation metric (Identifying Bear-Market Resistant Funds During Good Times) is little help since there have been no bear market months, which M* defines as a 3% drop in S&P. It's been 21 months since last sighting, Jan 2016. Fourth longest stretch after 2007 (35), 1994 (27), and 1965 (22).

October marked 12th consecutive month with no annualized drawdown or downside in S&P 500 total return. Last time that happened was February 1959, nearly 60 years ago ... a time of Eisenhower, Alaska, Hawaii, and The Space Race.

FYI: Alternative funds, which mimic hedge-fund techniques to increase returns or reduce risk, soared in popularity in 2015 and 2016. How have they done this year?
Regards,
Ted
http://www.investmentnews.com/gallery/20171120/FREE/112009998/PH
1. AlphaClone International ETF (ALFI)
2. GMO Special Opportunities Fund Class VI (GSOFX)
3. RiverPark Long/Short Opportunity Fund (RLSIX)
4. Superfund Managed Futures Strategy Fund (SUPIX)
5. Boston Partners Emerging Markets Long/Short Fund (BELSX)
6. Longboard Alternative Growth Fund (LONGX)
7. Balter European L/S Small Cap Fund (BESMX)
8. Natixis ASG Tactical U.S. Market Fund (USMYX)
9. Swan Defined Risk Emerging Markets Fund (SDFAX)
10.AlphaClone Alternative Alpha ETF (ALFA)

Changes affect GPEOX & GPROX
http://hosted.verticalresponse.com/1760641/98fc148a65/578461017/01a33afb5b/

https://www.sec.gov/Archives/edgar/data/889284/000119312517349112/d497145d497.htm
497 1 d497145d497.htm STERLING CAPITAL FUNDS
LOGO
STERLING CAPITAL LONG/SHORT EQUITY FUND
SUPPLEMENT DATED NOVEMBER 21, 2017
TO THE CLASS A AND CLASS C SHARES SUMMARY PROSPECTUS,
INSTITUTIONAL SHARES SUMMARY PROSPECTUS,
CLASS A AND CLASS C SHARES PROSPECTUS,
INSTITUTIONAL SHARES PROSPECTUS,
AND STATEMENT OF ADDITIONAL INFORMATION,
EACH DATED FEBRUARY 1, 2017, AS SUPPLEMENTED
This Supplement provides the following amended and supplemental information and supersedes any information to the contrary with respect to the Sterling Capital Long/Short Equity Fund in the Class A and Class S Shares Summary Prospectus, Institutional Shares Summary Prospectus, the Class A and Class C Shares Prospectus, Institutional Shares Prospectus, and Statement of Additional Information, each dated February 1, 2017, as supplemented:
The Board of Trustees of Sterling Capital Funds has approved the liquidation of the Sterling Capital Long/Short Equity Fund (the “Fund”). The liquidation is expected to occur on or about January 26, 2018.
As of the date hereof, shares of the Fund are no longer being offered for sale.
Please contact your financial advisor or Sterling Capital Funds at 1-800-228-1872 if you have any questions.
SHAREHOLDERS SHOULD RETAIN THIS SUPPLEMENT WITH THE PROSPECTUSES
AND STATEMENT OF ADDITIONAL INFORMATION FOR FUTURE REFERENCE
SUPPLS-1117

Thanks!
The argument about ICMAX is interesting. If your time horizon is short and you can guarantee that the market will rise steadily (a feat that some technicians and timers believe is doable), then you should be fully exposed to the stock market. That's especially true if stocks are cheap. And that certainly eliminates from consideration absolute value funds, which only invest if they find suitable values. If your horizon is moderate and you have no idea of what lies ahead, there's an argument for varying your equity exposure based on what you can measure (valuations) rather than on what you can't (future returns). That's especially true if stocks are expensive.
The reason most investors do poorly is that they underestimate the risks they're taking and overestimate their abilities to navigate falling markets.
That said, I can read the numbers: 0.4% returns over 3 years, 4% over 5 years, 7.2% over 10 years (effectively the whole market cycle). But I knew what I was getting when I bought the fund: disciplined manager in a volatile asset class, long-term record of withdrawing from overpriced markets and buying into sharply correcting ones. Given that I didn't want to double down on my FPA Crescent (FPACX) position when Artisan SCV liquidated, this made sense for me.
But it might well make little or no sense for other investors.
As ever,
David

Thanks for this Thread.
Wow...ICMAX...Almost 60% Cash, 20% Bonds...ER=1.4% while the 1 Yr Investor Return was 1.44%.
Another way of putting it is that the fund investors spent $2.475 M in management fees to achieve a CD rate return of 1.44% (or $2.5 M of net gains for the entire fund). What could be more equitable?

In response to an emailed question, here are the US equity funds with the highest Martin ratios over the full market cycle that began in October 2007:
Reynolds Blue Chip Growth (RBCGX), 1.75
Intrepid Endurance (ICMAX), 1.67 (which I own shares of, fyi)
Yacktman Focused (YAFFX), 1.31
Eaton Vance Atlanta Capital SMID-Cap (EISMX),1.25, also a Great Owl
Parnassus Endeavor (PARWX), 1.20, Great Owl
Madison Dividend Income (BHBFX), 1.15, Great Owl
AMG Yacktman (YACKX), 1.14
Monetta Young Investor (MYIFX), 1.12
Brown Capital Mgt Small Cap (BCSIX), 1.11, Great Owl
Prospector Opportunity (POPFX), 1.08, Great Owl
Charles's "Great Owl" designation tracks the consistency with which a fund posts outstanding risk-adjusted returns. Technically, they are "top qunitile funds in their categories based on Martin for periods of 20, 10, 5 and 3 years, as applicable." All of the funds above have records of 10 or more years.
For what interest that holds,
David

An alternative to 403(b) investing might be found right under the noses of the (K-12) educator who contributes through payroll deductions to fund their very own state pension. State systems often have what are referred to as "voluntary accounts" for their teacher members.
The IRS identifies these accounts as 401(a) accounts (the public sector's equivalent to a private sector's 401(k)). They are contributed to with after tax contributions that have unique features such as being invested in the same manner as the state pension fund.
The one I had access to had no fees and a "10 year smoothing average" was applied to the account once a year based on the last 10 year's performance of the state pension fund. Subsequently the smoothing average method was replaced with year to year returns for the 401(a) voluntary accounts.
At retirement, the "growth" in this account was available to be rolled over to T. IRA and the after tax contributions qualified to be rolled over to an individual Roth IRA according the pre-tax "cost basis" of the account.
Here's a link to the CTRB website describing the 401(a) option for CT members:
How do I initiate an Active Teacher Voluntary Account with CTRB?
Ask your teacher pension administrator if this 401(a) option exists and how you can contribute voluntarily.
Zacks has few articles on the 401(a):
Can-401a-403b-plans be rolled over?
How are 401a-different-401k?

FYI: (Click On Article Title At Top Of Google Search)
Financial incentives and poor products run rampant in the non-ERISA 403(b) realm, especially for educators teaching kindergarten through 12th grade, according to advisers
Regards,
Ted
https://www.google.com/search?source=hp&ei=s-UTWt_TGo6hggfkwLvACA&q=investment+news+403(b)+advisers+disappointed+with+TIAA,+but+say+other+providers+are+'way+worse'&oq=investment+news+403(b)+advisers+disappointed+with+TIAA,+but+say+other+providers+are+'way+worse'&gs_l=psy-ab.3...1393.10457.0.11599.18.18.0.0.0.0.160.1451.16j1.18.0....0...1c.1j2.64.psy-ab..0.17.1462.6..0j35i39k1j0i131k1j0i67k1j0i131i20i264k1j0i20i264k1j0i131i67k1.106.QF6dDvM8oYQ

We thought we’d continue catching up with the 130 U.S. equity funds which have passed their second anniversary but have not yet reached their third, which is when conventional trackers such as Morningstar and Lipper pick them up. (Technically, they're in the 1.9 year to 2.9 year age bracket.) As Charles has repeatedly demonstrated, the screener at MFO Premium allows you to answer odd and interesting questions. Our screeners are unusually risk-sensitive. That’s because the easiest way to make money, in the long term, is not to lose money in the short-term. The default risk measure in our ratings is the Martin Ratio, which is exceedingly sensitive to downside risk. (Charles can share the details, if you'd like.)
Here's the most disturbing finding of our search for the most risk-sensitive two-year-old funds: they're ETFs. At the very least, all of the ten best funds, measured by Martin Ratio, are ETFs. Here they are, from the safest young equity fund to the 10th safest:
State Street SPDR S&P 500 High Dividend ETF SPYD (Equity Income)
JPMorgan Diversified Return US Equity ETF JPUS (Multi-Cap Core)
ProShares S&P 500 Ex-Financials ETF SPXN (Large-Cap Core)
ProShares S&P 500 Ex-Energy ETF SPXE (Large-Cap Core)
ProShares S&P 500 Ex-Health Care ETF SPXV (Large-Cap Core)
ProShares Russell 2000 Dividend Growers ETF SMDV (Small-Cap Core)
Goldman Sachs ActiveBeta US Large Cap Equity ETF GSLC (Multi-Cap Core)
VictoryShares US Large Cap High Div Volatility Wtd Index ETF CDL (Large-Cap Growth)
Invesco PowerShares S&P 500 Momentum Portfolio SPMO (Large-Cap Core)
Xtrackers Russell 1000 Comprehensive Factor ETF DEUS (Multi-Cap Core)
Likewise, 9 of the best 10 funds measured by Sharpe ratio are ETFs.
Why's that disturbing? Because market-tracking products should have market-like risk, not vastly lower-than-market risk. So, what gives? As Charles pointed out in his September essay, there simply is no downside volatility being manifested in the market now which means that our screener has hundreds of US equity funds (rather more than 300) with incalculably high Martin ratios. In a normal market, a Martin Ratio of "3" is virtually unattainable; no U.S. equity fund has a 10- or 20-year Martin ratio that high. The best record for a fund that's been around at least 5 years is AQR Large Cap Defensive Style (AUEIX) with a lifetime Sharpe ratio of 11. To recap: in the long term, no US equity fund is capable of a Martin ratio of 3 (or even 2) and, in the medium term, 11 is incredibly high.
What about today? The highest calculable one-year Martin ratio we currently have is Calamos Dividend Growth (CIDVX) at 202,363. The fund's long term Martin ratio is 3.06.
As Charles noted in a recent tweet, the deception gets worse this month as the worst drawdowns from the 2007-09 crash disappear from funds' 10-year records.
Bottom line: common risk metrics, which focus on three year periods, are probably unreliable guides just now. You need to understand a potential investment's risk by (a) looking at the manager's risk-management discussions (if he doesn't have one, run away!) and (b) taking most seriously the risk characteristics in the two recent down markets (2000-02 and 2007-09) or across the whole market cycle, rather than getting lured in by shiny short-term numbers. We'll continue to try to do both for you; that is, we'll take the qualitative and long term quantitative together as we try to make sense of what's on offer.

@MikeM, I hear you about the alt categories' shortcomings, but I also think 4+ years is more than a brief moment. They're both closed to new investors now, so aren't that plugged up with assets.
(As usual, I reserve the right to change my mind and sell at any time. Which I tend to do not all that infrequently.)
Cheers - AJ
P.S. @davidmoran, QM's neutral and QL is the same neutral strategy + up to 50% long as an addon. QM usually runs at sort of a bond-ish level of volatility (M* compares the up-down capture to the AGG), and it tends to pick up the slack when both stx and most bonds take a hit.

Yeah, I noticed that, as I was charting them ($10k growth) vs DSENX, which tripled SP500 that year --- but nothing like those two.
For the next year (last year), it was a rather different story, with DSENX near to doubling SP500, QLENX close to equaling SP500 and QMNNX about only half.
Wonder what happened in 2015.
Wish I could put some money in them. Sure are not a lot of articles.

@catch22 , I agree with you. Not my cup of tea either. I don't see how these funds can do anything but stunt the growth of an already well diversified portfolio. But on the other hand, building a portfolio is a personal thing and if they bring more risk-level comfort to some, then that's the AQR buyers market.

As I wrote above, Mike, you might want to check QL and QM in the near-zero return year of 2015 if you think comfort is all those funds can do:
VFIAX (S&P 500): +1.36
VBMFX (core FI): +0.30
VWEHX (hy FI): -1.40
QLENX +16.79
QMNNX +17.43
Since inception in mid-2013: $10k = $18,815 QLENX, $16,764 VFIAX, with QLENX holding on average about 50-60% long exposure to the equity market.
None of this of course means that all of their funds will do well; my point is that dismissing them only on the basis of what people think they are and do is potentially a mistake.

What I look at first (and I figure pretty much everyone looks at first) is what index is being tracked. "Similar" is a vague term. I wouldn't call the S&P 1500 "similar" to the S&P 500, or VOO "similar" to VTI. Likewise, I wouldn't call the EAFE index (900+ stocks, $16B mean average cap) similar to the EAFE IMI index (3,000+ stocks, $5B mean average cap). But those are what the article says are similar.
After figuring out which index I want, I look at costs, all costs. That includes spreads, expense ratios, and to a lesser extent tracking error. Spreads relate to liquidity, but liquidity of an ETF is more than just the volume (in number of shares) traded daily identified in the article.
Vanguard, "Understanding ETF Liquidity and Trading: Average daily trading volume is only a small part of an ETF’s total liquidity profile."
The article says that "Well-known funds such as SPDR S&P 500 (SPY) and SPDR S&P MidCap 400 ETF (MDY) weren't changed for the same reasons EEM still exists."
Maybe. But with these funds, there's more to the story. S&P 500 index funds exist not only for traders and institutional investors (the target audience given for EEM hanging around), but because retail investors buy the sizzle, the familiar name.
About a decade ago, Vanguard worked with MCSI in designing indexes that could be tracked better, with lower turnover and better tax efficiency. Vanguard promoted funds based on these indexes, including VLACX / VV . Yet it kept VFINX around. When I questioned a Vanguard financial planner why he recommended VFINX over VLACX, I didn't seem to get an answer much beyond a couple of basis point difference in costs. The main reason appeared to be familiarity, i.e. sizzle.
There's yet another reason why SPY and MDY won't be changed. They use an archaic unit investment trust structure. This has the cost disadvantage of cash drag (underling dividends cannot be invested by the fund but must be distributed quarterly to investors). Given their structural disadvantage, they're not good candidates for cost reductions.
Vanguard: What are the Five Etf Structures?

I'll stay with the 3 funds listed previous for a 3 time periods view. We don't have any money directed to this area (AQR offerings); but an interesting study, none the less.
--- Jan. 2010 - Jan. 2012. Brief background. Euro/Japan still attempting to define and refine monetary adjustments after the market melt. Many whipsaws in Euro markets (you didn't forget Greece did you?). The BIG one (albeit short lived reactions) was the downgrade by S&P of the debt quality of the U.S. in July, 2011. The equity sector(s) hit in July, 2011can be observed here, too; represented by FSPHX.
http://stockcharts.com/freecharts/perf.php?AQMIX,FSPHX,EDV&l=0&r=505&O=011000
--- 2015, year. Bond farts in this year, particular late spring through the summer.
http://stockcharts.com/freecharts/perf.php?AQMIX,FSPHX,EDV&l=1254&r=1501&O=011000
--- 1 year chart to date
http://stockcharts.com/freecharts/perf.php?AQMIX,FSPHX,EDV&n=248&O=011000
At least with AQMIX, I do not find an advantage for their methods and a 1.8% E.R.
Okay, got to get to chores while the sun is still shining through.
Catch