Catch 22
Flexibility is key. My Fidelity rep has also upgraded many funds from investor
class to institutional like several Matthews and Seafarer funds. Bringing down the expense ratio by 25 basis points is important for me.
Also, many times the $49.95 fee for buying institutional share class funds has been
waived.
If your rep works with you like mine, it is important that you send an email to Fidelity telling them how pleased you are working with their rep.
Mitchelg

Jaba
I bought AZMIX through Fidelity. My relationship with a Fido representative allows me to do this. Originally, I mentioned to him that I could buy Pimco & Allianz institutional funds at Vanguard for $25,000 minimum. They wanted to keep my business so they allowed the purchases. Initial orders need to be through a representative.

A nice piece by Grantham who pretty much covers the bases in his suggestions. And I get the feeling he’s as befuddled by today’s equity markets as I am. Makes a lot of different suggestions depending which way markets run. I get that he likes EM. The problem with those kinds of suggestions is they can take years to pay off. Might double next week. Might also fall 25% in a year before rebounding and rising 50% over 6 months. Not for the conservative investor.
One of his suggestions is “liquid alternatives” - which Investopedia loosely defines as hedge funds for the little guy (low minimums and few restrictions on redemption) - as the answer to the conundrum he sets up. But, with these you’re paying a ton in management fees and are highly vulnerable to the decision making of the manager. I’m not convinced most are any better at guessing which direction to lean toward at any given moment than most of us are. Some get it right. Many don’t. A change in manager can spell disaster for a previously successful fund. Shorting equities costs the fund additional money in the form of interest and also increases risk. So I’m not a fan of liquid alts.
@bee - The knock against PRPFX has always been that as an individual you can purchase the bonds, gold, silver, natural resource stocks, Swiss Francs, real estate and aggressive growth holdings (and in the same proportions) cheaper yourself than paying Mr. C to do that for you. My answer is: Yes you can. But who among us has the time, resources and wherewithal to do all that - and than to rebalance it all periodically? If anyone here is replicating the fund on their own, they haven’t voiced it. I don’t know what the “right” amount is for that type of holding. I hold a bit - and sleep very well on it. Guess it amounts to something like 5-10% of my total. Content to leave it alone and take distributions elsewhere. I do consider it something of a liquid alt - but not as normally viewed or defined in the investment community.

explain your disagreement.
https://www.bloomberg.com/news/articles/2017-10-05/this-is-how-to-create-the-top-emerging-markets-etf

The word "value" doesn't appear once in that article.

It would take a major correction for EMQQ to be considered a "value" play. The fund is exclusively Internet and Ecommerce companies, which gives the fund and significant growth bias...

FYI: Since I wrote this piece for Bloomberg in late-October there has been an additional 14 new all-time highs in the S&P 500. I’m often asked why the market continues to trudge higher in the face of so much uncertainty in the world. The simplest explanation is this idea of momentum. Momentum is by far the best performing academic risk factor in the markets historically, but it’s not always so easy to take advantage of and most investors don’t understand what it actually is. This piece takes a deep dive into what the momentum factor is and details some of the struggles the fund world has had in capturing its risk premium.
Regards,
Ted
http://awealthofcommonsense.com/2017/12/the-pros-cons-of-momentum-investing/

Whenever you read expressions like "innovative" and "sets itself apart" (here, "in that the minimum management fee goes to zero if the funds don’t outperform their benchmark"), you should be wary of hype.
Here's what M* had to say: "It's a rare [but not unique] situation in the industry. The performance fees of most other funds that levy them are structured in a way that makes a negative or zero net expense ratio mathematically impossible."
It wasn't writing about these funds. That's a quote from 2011, where M* was describing Bridgeway Funds. The title of that article was "Bridgeway Pays Shareholders to Invest, for Now". Bridgeway reduced management fees so low (well below zero, unlike Allianz) that the total ER of two funds were 0.00% or less.
Basing a performance fee on a twelve month performance is akin to companies jiggering quarterly performance to keep the market happy. A year is too short a period of time to allow a manager's strategy to play out. Instead, it encourages window dressing and conservative investing if the fund is slightly ahead, and excessive risk taking if the fund is way behind.
As noted in this CBS Moneywatch article also about Bridgeway in 2011:
"[Bridgeway's] aggressive performance fee ... is calculated on the fund's average assets over the trailing five years, instead of the more common three years".
Funds don't generally use one year performance figures. For example, Fidelity uses a rolling 36 month period to benchmark performance.
See also Barron's Should Fund Managers Get Paid for Performance

FYI: The Polen U.S. Small Company Growth Fund (PBSRX) intends to base the management and make-up on the existing U.S. Small Company Growth strategy. The Fund’s strategy aims to outperform by investing in stocks of businesses that the adviser believes are positioned to capitalize on long-term growth opportunities and have strong financials, a sustainable competitive advantage. We also focus on the potential for durable five-year earnings growth.
Regards,
Ted
https://www.businesswire.com/news/home/20171219005516/en
M: Snapshot PBSRX:
http://www.morningstar.com/funds/XNAS/PBSRX/quote.html
Polen Capital Management Website:
https://www.polencapital.com/pdf/Media/USSmallCompanyGrowthMutualFundLaunchPressRelease.pdf

FYI: Allianz Global Investors (AllianzGI), one of the world’s leading active investment managers, announced today the launch of the AllianzGI PerformanceFee Fund suite of products offering a performance fee structure in which the management fee goes to zero if the funds don’t beat their benchmarks over a rolling 12 month performance period.
Regards,
Ted
https://www.businesswire.com/news/home/20171219005678/en

@davidrmoran Yes. For this new "portfolio at the margin" of my overall portfolio, AOM probably provides a decent benchmark. For my overall portfolio, I am using the following this year:
FSTVX 30%
VXUS 20%
VBTLX 22%
PTIAX 22%
RPHYX 6%
The RPHYX accounts for a near cash set-aside maintained to assure the availability of cash for the 3.5% annual withdrawals drawn from the portfolio (withdrawn in quarterly segments based on the prior year-end portfolio balance). It really takes a full market cycle to evaluate things, but I like to check in with a reference benchmark along the way.

@bee Interesting observations. My hunch is the most likely outcome for China is that they will continue to muddle through -- at least in the short to intermediate term. But your concerns make sense to me. Andrew Foster shared some interesting thoughts about China in a recent shareholder letter ( http://www.seafarerfunds.com/letters-to-shareholders/2017/10/semi-annual ). He is likewise concerned/disappointed.
It does not make sense to me to focus on Japan until the crisis in Korea resolves itself. I remember from a few decades ago how short the boat ride was from Japan to Korea. Unfortunately, by missile the ride would be very much shorter. Both Korea and Japan seem quite risky to me at present.
Your pondering about whether it is time for PRPFX is interesting. Last summer I began to decide what to do with a pot of new cash derived from the sale of a "winter" house. In July, in part using the sort of thinking you presented in a recent post about high yield, I made the following investments: MCRDX = 12.5%, PONDX = 12.5%, IOFIX = 16.7%, RPGAX = 16.7%, and GDMZX = 16.7%. Since then I have added DSENX = 6.3%, WEMMX = 6.3% and SIVLX = 7.5%. That leaves 5% which will probably soon become MEASX. All but 2 of these investments represent increases to existing holdings. This results in about 40% in stocks with about 45% of that foreign. (I allot the bonds in DSENX to the domestic stock percentage given the benchmark DSENX ties itself to.) Bonds are a little over 50% of this pot. It will be interesting to watch how this "pot" of new investments performs going forward. Its about 10% lighter in stocks and 10% heavier in bonds than the rest of my portfolio.

explain your disagreement.
https://www.bloomberg.com/news/articles/2017-10-05/this-is-how-to-create-the-top-emerging-markets-etf

The word "value" doesn't appear once in that article.

"Who was Madoff? Did money beat a path to his door?"
@hank,
Just in case your question was serious, Madoff perpetrated the largest ponzi scheme in U.S. history of around $65 billion which came crashing down during December of 2008 amidst large redemption requests by his investors. He was also instrumental in the founding of the Nasdaq.

explain your disagreement.
https://www.bloomberg.com/news/articles/2017-10-05/this-is-how-to-create-the-top-emerging-markets-etf

@AndyJ Yes. There was an overall nod in favor of developed ex-US. In that regard, I am currently considering increasing my overall allotment to foreign stocks by a few % in 2018 via a chicken little approach and have set up a chart to track FMIJX vs SPHD performance as 2018 progresses. A nod in favor of FMIJX will probably cause me to decrease or eliminate SPHD and increase FMIJX (FMIJX is close to 20% cash and 15% US right now hence the "chicken little" part of my thinking).

Alarming is the fact that so few people have a written investment/retirement plan.
"• Calculating retirement savings needs. Forty-seven percent of workers who provided an estimate for their retirement savings needs did so by guessing, a survey finding that is consistent across the three generations of workers. Only seven percent have used a retirement calculator.
• Formulating a written strategy for retirement. Sixteen percent of workers have set forth a retirement strategy in writing. Ironically, Baby Boomers (12 percent) and Generation X (15 percent) are less likely than Millennials (20 percent) to have a written strategy."
While a written investment strategy is useful, it lacks a good deal of meaning until you estimate what you’ll actually need for retirement.
Some simple calculations (expenses and income) will tell a person where they are and what they may need to achieve in order to reach a Retirement Number that will provide them with a decent retirement. While there are many calculators that can be used to shortcut this calculation, I’m of the opinion that actually WRITING these numbers on a piece of paper will prove more meaningful.
After adding up your monthly expenses, you subtract your expenses from your monthly after-tax income. In most cases you will have a deficit.
You will need your investments to make up for the deficit.
Multiply the deficit amount by 25 (representing a 4% drawdown percentage) then divide by your tax bracket percentage (a 20% tax bracket = .80 – a 28% bracket = .72, etc.)
The final number is often called your Retirement Number or your Magic Number.
This is not a wishful number or some pie-in-the-sky number. It represents the amount of money that you should seek to protect – a number you don’t wish to fall below when you reach retire. Of course, as your income and expenses change over time, you will want to recalculate your Retirement Number.
If your investments fall below this number you should consider cutting your expenses or increasing your income – or both.
As I’ve said many times (and I won’t repeat myself) the trick is not just buying and walking away but also learning when to sell. Avoiding market crashes is the surest way I know to protect your Retirement Number.

For most tax purposes, all traditional IRAs are lumped together into a single total. So segregating nondeductible contributions into a separate IRA doesn't simplify taxes. You're nontaxable fraction of an IRA distribution, as calculated on Form 8606 is:
total of all nondeductible contributions across all trad IRAs / total value of all trad IRAs
There is a rational desire not to "eat into principal". You don't want to deplete your assets that generate future dividends and growth. That said, it should make no difference whether you harvest your profits (while leaving principal untouched) in the form of interest, dividends, or capital gains.
Own a bond, and you get interest while the principal remains intact (though shrinking in real value).
Own a bond fund, and you get that same interest, but for legal reasons payments are called "dividends".
Own a stock, and you get cash dividends while keeping the same number of shares (which may go up or down in value).
Own a stock fund, and you those cash dividends passed through to you as fund dividends.
Buy 100 shares of a stock @$20 ($2000 principal), sell 20 shares when it goes up to $25, and you've got $100 in cap gains and also your original principal (80 shares @$25).
If that stock is in a fund and the manager sells those 20 shares, you get the $100 cap gains in the form of a fund "dividend", and your fund shares are worth what you paid for them (no change in principal).
If the fund manager doesn't sell and distribute the profits, then the fund shares go up 25%. You sell 20% of your fund shares, get the same $100 capital gain, and your remaining fund shares are still worth what you paid originally (no change in principal).
All of these retain your principal investment - whether you get interest, dividends, cap gains dividends, or take capital gains yourself. Yet somehow it feels different when the fund manager sells a stock (generating a cap gains div) vs. when you sell a fund share yourself.
I'm guessing that therein lies the source of differing perspectives.

I was trying to locate a 2 or 3 year old fund report for PRWCX to refresh my recollection of their strategy back than (2014 or 2015). Can only locate the most recent annual and semi-annual reports on their website. Is there a way to go back in time and see what a fund’s manager was saying a few years ago?
(I realize that with some fund managers the tune never changes. :))

Dogs of the Dow is an early rules-based strategy. Quant has come a long way since then.
I ran a simulation back to Jan 1999. One-year holding periods, rolling on a weekly basis. So 938 "years" were tested.
Dogs of the Dow (5 lowest priced Dow stocks from top 10 Dow yielding stocks) averaged 8.63% per year return vs 6.85% for SPY. Dogs beat SPY 57% of every year tested.
But the standard deviation from holding just five stocks was higher. So the average Dogs Sharpe and Sortino ratios were lower than SPY. And average Dogs max drawdown was higher than SPY.

VT
Vanguard Total World Stock etf VT is a solid one-stop choice for exposure to global stocks. It accurately represents the global investable universe and is well diversified.
morningstar.com/etfs/arcx/vt/quote.html