Old_Skeet: FWIW, I'm thinking my Market has priced the
rate increase in already. Last month VG Retirement Income went down almost 14 % Nav 5.1 down to 4.4.
Derf

Hi @bee,
Thanks for making comment.
Let's hope that the anticipated tax cut and that the earnings numbers that Mr. Saut projects come to be. Otherwise, this market will be extremely overbought. I read Mr. Saut's commentary weekly; and, I have followed him for a good number of years finding, for the most part, that he makes good calls.
I'm wondering what's going to happen (concerning interest rates) when the Fed's meets next week? For now, the markets don't seem to concerned about it as there must be a lot of short covering along with some program trading which are helping to drive the markets higher. The year ending TTM (reported) earnings, that I follow, on the 500 Index are being projected by S&P at $99.77. At current valuation this equates to a TTM P/E Ratio just short of 23.
For now, I'm not putting new money to work as I beleive a pull back will be coming once this buying frenzy exhaust itself. In addition, what if the Fed hikes more than the expected quarter of a point?
Skeet

All ratings have been updated on MFO Premium site, including MultiSearch, Great Owls, Fund Alarm (Three Alarm and Honor Roll), Averages, Correlation, Dashboard of Profiled Funds, and Fund Family Scorecard.
Fairholme entered the Top category on MFO's Fund Family Scorecard. All three Fairholme Funds have beaten their peer averages on an absolute return basis since inception. It joins other top performing families Dodge & Cox, FMI, Longleaf, Oakmark, Oberweis, Osterweis, Grandeur Peak, Gotham, Tweedy Brown, Artisan, Mairs and Powers, RiverNorth, PRIMECAP. Here is complete list of Top Fund Families:

Bottom families? State Farm, Timothy, Hussman, AdviserOne, Permanent, Pacific Financial, CMG, O'Shaughnessy, and Oak Associates are among the 75 families in the MFO Scorecard cellar.
So, how can a shop as thoughtful as O'Shaughnessy have 4 of its 5 funds trailing their peers since inception, as shown below?

Well, two of its funds, O'Shaughnessy Market Leaders Value Fund (OFVIX) and Small Cap Value Fund (OFSIX), are less than a year old and have each delivered shareholders more than 20%, despite trialing averages. The others too have delivered handsome returns for the past six plus years, granted with some healthy drawdown in 2011 and 2016, the latter by the Enhanced Dividend Fund (OFDIX). The global equity income OFDIX is still below its previous maximum.
Hmmm, relative returns aren't everything, are they? Will attempt to shed more light on this topic in future posts.
The Category Averages tool provides a summary of averages for 144 Lipper fund categories (excluding money market) across 10 different time frames. Looking at the current market cycle, which began in November 2007 and is now 9 years old ... below are the top and bottom categories and attendant total return, %:


Time to rotate into bottom dwellers?
Waddell & Reed have 19 funds with $24B in assets under management (AUM). Its parent Waddell & Reed Financial Inc trades publicly under ticker WDR. Currently, eight of its funds are in the Three Alarm doghouse, which means they have delivered bottom quintile absolute returns the past 1, 3, and 5 year periods:

Its subsidiary Ivy Funds has 39 funds with $39B in AUM. It too has eight funds on our Three Alarm list:

They have just launched three Ivy NextShares ETFs.
Neither Waddell nor Ivy have any funds on the MFO Honor Roll. They have one 3-year Great Owl: Ivy LaSalle Global Risk-Managed Real Estate Fund (IVIRX).

From a recent Jeff Saut (Raymond James) article I reference this passage and a possible endorsement for equity inflation in 2017:
Our sense is the new administration will not be able to get the corporate tax rate down to 15%, but even at a 25% rate, it implies an additional $13.10 to the S&P 500’s bottom up operating earnings number ($1.31 x 10 = $13.10). Using Bob’s same math produces an earnings estimate of $144.10, and at 17 times earnings, it renders a price objective of roughly 2450 for the S&P 500.
Article:
Serenity now?

Hi Crash - Glad you brought this thread back to life. Lack of earlier responses may relate to some ambiguity among readers about just what your investment approach is. I'm curious how many years before you begin distributions and whether that will affect your fund selection? I'm also a bit confused from past posts about just what you already own. At times you've seemed to be very heavy into real estate funds along with EM equities and bonds. Recently you mentioned some investments in PRLAX (a fund I think more appropriate for timing and speculation rather than long term commitment).
At one point a few years ago I thought you had moved all your invested assets to T. Rowe Price (great manager). And I know you like PRWCX. This last one has gotten very conservative recently and this year seriously lags a couple funds it is often compared to: DODBX and OAKBX. Manager is likely dealing with a huge inflow of $$ both before and after the soft close. But over 5 years it still sports a great risk adjusted return. It would be really interesting to hear what type of allocation model you adhere to and how you are positioned by asset class (as opposed to a list of individual funds.)
RE MOWNX (Investor Class): It has 1.65% ER after waiviers. That's very high for a value fund - even taking into consideration its international component. Concentrated funds tend to live and die by the sword - meaning they can rocket to fantastic heights or fall off steep cliffs. (Sometimes they accomplish both feats in relatively short order.) :) Not saying not to invest in one - just beware.

2 questions for Junkster if you don't mind.
BXFYX looks to be a pretty small fund (100mil). Do you worry about when you exit, you will get hammered with your exit price since it sounds like you have a fair amount invested?
Seems like you are in capital preservation mode but if you were trading today for max capital appreciation, what area of the market would you look for a trade?
Thanks!

Re BXFYX, the bank loan category has been the epitome of a tight rising channel since the February bottom. The size/assets of an open end fund isn't prone to the volatility of say an ETF where you can get hammered. To me getting hammered would be a 1% daily decline so not worried about that while this category is in a bull phase.
While I am in a capital preservation mode, my main focus this year has been to still try to beat the S&P (while trading bonds) and so far this year have accomplished that. However as the S&P is closing in on me have gone from 100% bank loan to 80% with the other 20% in junk corporates (IVHIX) I may increase that 20% if warranted. As to what I would be trading were I younger and more hungry I really can't answer that. Obviously small cap value has been the place to be but really haven't looked at any funds there. While I would never ever buy a groupthink fund recommended on this board or any other, I must say DSENX sure has performed well.
The equity optimism on 2017 has been a bit worried. Kind of reminiscent of all the optimism on this board regarding healthcare/biotech in 2015. But then I always worry.

FYI:
State retirement plans for workers fed up with fees, returns.
University endowments also redeeming, negotiating better terms.
Regards,
Ted
https://www.bloomberg.com/news/articles/2016-11-15/hedge-fund-love-affair-is-ending-for-u-s-pensions-endowments

Inflation protection has been a recent topic on the board. I have linked below an article from M* and what they have to say on the subject.
"Surveying the fund & ETF landscape, from direct hedges like TIPS to indirect inflation-fighting plays such as floating rate loans and commodities" are covered in the article.
http://news.morningstar.com/articlenet/article.aspx?id=783695
In addition, I have linked the M* fund report on PRDAX as it is one of the more diversified inflation fighting funds that M* writes about in the article.
http://www.morningstar.com/funds/XNAS/PRDAX/quote.html
After reading the article and study of the above fund along with my review of a recent Xray report of my portfolio I have discovered that about a good third of my portfolio in some way offers inflation protection.
Perhaps, you will find the article of benefit as I did.
I wish all ... "Good Investing."
Old_Skeet

Look at the average market cap of Wasatch International Opportunities:
portfolios.morningstar.com/fund/summary?t=WAIOX&region=usa&culture=en_US
If my memory is correct, it has historically had one of the lower average market caps of foreign small funds, certainly lower than $1.5 billion, currently about half that level. By contrast the Wasatch emerging markets fund has a significantly higher market cap:
portfolios.morningstar.com/fund/summary?t=WAEMX
The same is true for the frontier emerging markets fund:
portfolios.morningstar.com/fund/summary?t=WAFMX
All of which is to say in emerging markets her new funds will be interesting and maybe better than her previous charges. But in a broader international fund or global fund, it is much less certain. But this may be more than just about a partnership and competitive overlap. It may also involve a significant lifestyle change. Researching tiny stocks can be extremely time consuming and require tremendous air travel. As a manager ages, I can't imagine that continues to be fun for long. Also, starting one's own money management firm by itself is a significant lifestyle change. You have to now be a CEO and a money manager. So I think the jury will be out on a global or international fund for me. They could be great, but they are certainly not the same as WAIOX.

I participated in the conference call this morning with GP and found it comprehensive and informative. It included the introduction of Laura Geritz, the reasons for her partnership with GP, and most of all her presenting details about her investment background and historical investing style.
I asked if holding smaller companies in her Rondure all cap portfolios will be competitive with GP and if her concentration in companies above 1.5B would be sacrificing the talent that she had shown at Wasatch -- two issues that have been raised here.
She said that the issue of competition was discussed at the very beginning with GP and that the partnership is seen as a collaborative effort that would far outweigh any competitive issue.
Regarding the second question, earlier in the call she mentioned that her previous background includes considerable experience in investing in what she called "the 800 pound gorilla type of companies," adding that she included companies of this size in both the small cap emerging markets fund and the frontier fund at Wasatch. She is very comfortable investing in companies of this size.
Also, in reference to this question, one GP team member said that GP's investing in companies below 1.5B poses liquidity issues and that buying companies above that amount would offer plenty of liquidity. Another team member said that they like to tease Laura about their liking to invest in companies growing faster than hers.
Two last comments about these questions from GP was that they work better together than apart (mentioned above), that she has already pitched them ideas, and that if one looks at the GP Stalwart funds (which do invest in companies above 1.5B), that what Laura has proposed to own has only a 10% overlap with what the Stalwarts own now.
Anyone having further questions can email GP, they said.
I hope this helps.

In April of 2017, I'll have been in MSCFX (small-cap BLEND) for 5 years. Now it's closed to new investors. When it opens-up again, it bears a hard look from folks who are not yet into it. I feed profits from this fund into MAPOX, which is one of my two less volatile portfolio anchors. PRWCX is the other. (Another closed fund. I have people here on this discussion board to thank for this.)

@MrRuffles: Excellent article that goes with earlier links on the subject.
Regards,
Ted
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/30517/vanguard-fires-chartwell-owner-of-berwyn-funds#latest

FYI: Pimco Total Return Fund, once the world’s largest mutual fund under former manager Bill Gross, is now the second-biggest actively managed bond fund as client withdrawals and investment losses reduced holdings
Regards,
Ted
https://www.bloomberg.com/news/articles/2016-12-05/pimco-total-return-passed-by-metwest-as-largest-active-bond-fund

I was being a bit flippant, and I suspect Edmond was as well. At the same time, one often finds incomplete reasoning or random factoids used to reach what may or may not be correct conclusions (albeit for other reasons).
VF suggests that women are scarce in trucking. As it turns out, Bloomberg had a piece on this a year ago - the industry is having its "Rosie the Riveter" moment - there's such a need for drivers that the industry has had to adapt, making its facilities and practices a bit less sexist.
https://www.bloomberg.com/news/articles/2015-09-01/truckers-smash-stereotypes-with-boost-from-women-out-driving-men
In contrast, I doubt there's a dearth of, say analysts, itching to become money managers. Some of the figures are comparable (5-10% female truckers and female US active fund managers), but the reasons and implications for the respective industries are different.

Edmund makes a good point. If the fund were truly actively managed, the expenses might be justified. But truth is there is very little change in holdings. Some trimming of positions now and then, but very little real change. So when performance lags, as it has 2012-2015, expenses loom even larger. And they have actually increased and are higher now than they were 5 years ago, no doubt because assets have bled more than 80% since 2012.

Aren't you leaping to conclusions?
- That money managers are married, and
- Their spouses are female.
Not easy to get this sort of data. I did run across these bit of trivia, since you broached the subject:
"We find that single CEOs, who are more likely to exhibit status concerns, are associated with firms that exhibit higher stock return volatility and pursue more aggressive investment policies."
http://fbe.usc.edu/seminars/papers/F_4-8-11_ROUSSANOV-Rev.pdf
This suggests the possibility that spouses (female or otherwise) are not "over quota" but "underrepresented" among gun slinging fund managers.
Better that fund managers should be confirmed bachelors without distractions, since "We find that marriages and divorces are associated with significantly lower fund alpha, during the six-month period surrounding the event and for up to two years after the event."
Limited Attention, Marital Events and Hedge Funds
I suspect that if I look hard enough, I'll find that kids are bad for managing money too. Amazing what useless factoids one can string together.

>> JG will likely not allow
If only it worked like that, as a matter of effort.
Yes, I trust his navigational skill. 53% in DSEEX / DSENX alone.

@Sven, I think domestic equities will likely have a dip at the inauguration, which should be bought. Then hang on through the April or May. The market should be choppy through the summer, and then head up in the fall of 2017. I am bullish on domestic SC/MC equities for the next 3 years, and have 100% of my TSP in the S fund (VXF equivalent).
@davidrmoran, I am comfortable in the process involved with DSEEX, and we continue to have 15% of our portfolio invested in this fund. And JG will likely not allow the FI portion of this fund be a drag on performance, so I am fine with holding this fund in a rising interest rate environment. And if the equity exposure hits a downdraft, the FI portion will be beneficial.
Kevin

I think PRPFX is a great vehicle to help investors think about diversification -- especially diversifying beyond standard stocks/bonds. That said, I don't plan to put any money in PRPFX myself. A couple things bother me about the vehicle:
a. Permanent allocations. Even if one identifies an optimal collection of asset classes, Its unlikely that "freezing" allocations permanently is a good idea. Investing conditions change. One's allocation should adapt to change, not ignore it. -- Even if the only change you want to make is one's shrinking time horizon as one ages.
b. Equal allocations: PRPFX essentially slices its portfolio into 3 more/less themes: "ex-USD assets (gold, silver, Swiss francs), equities (including REITs) and "safe bonds". While slicing a portfolio pie into 3 (approximately) equal pieces is simple, I doubt its optimal.
c. Cost: With the proliferation of ETFs, the cost of owning these assets has gone way down, and the convenience has gone way up. I am not sure why I would or should pay a "permanent" annual MER of 0.8% to PRPFX for the Treasury bonds it holds. Or the gold bullion.
I think there is a good case to be made for owning assets, like PRPFX does, some of those benefit from deflation/disinflation, others from inflation, other from slow growth. But one can do so for less costs, and perhaps hire better stock/bond managers. I'd probably construct something like:
1. Stocks: VIG & VIGI (or VMVFX)
2. Reits: VNQ & VNQI
3. Bonds: Any 5-star, low-cost, core-interm bond funds. Or munis if taxable.
4. Gold/silver: GLD & SLV (though I would just buy/store the bullion outright). And probably not more than 10% of the overall portfolio. More likely 5-7%.
5. Swiss Francs: I'd probably forego the currency spec altogether.
Assembling the components yourself, you can probably replicate the benefits of PRPFX, but at 1/3 the cost, ad end up hiring better (bond) managers. (And re-balance/alter allocations as investment conditions warrant.)
Just my 2 cents.

Examples:
https://www.sec.gov/Archives/edgar/data/923184/000119312516784851/d299132d497.htm
497 1 d299132d497.htm 497
SUPPLEMENT DATED DECEMBER 5, 2016
TO THE INVESTOR AND INSTITUTIONAL PROSPECTUS OF
MATTHEWS ASIA STRATEGIC INCOME FUND AND
MATTHEWS ASIA CREDIT OPPORTUNITIES FUND
DATED APRIL 29, 2016
Effective immediately after market closing on December 30, 2016, the minimum initial investment for Institutional Class shares is lowered from $3,000,000 to $100,000.
Therefore, effective immediately after market closing on December 30, 2016, the Institutional Class Shares chart under the “Purchase and Sale of Fund Shares” section on page 11 is hereby removed in its entirety and replaced with the following:
INSTITUTIONAL CLASS SHARES
Type of Account Minimum Initial Investment Subsequent Investments
All accounts $100,000 $100
Minimum amount for Institutional Class Shares may be lower for purchases through certain financial intermediaries and different minimums may apply for retirement plans and other arrangements subject to criteria set by Matthews.
The minimum investment requirements for both the Investor and Institutional Classes do not apply to Trustees, officers and employees of the Funds and Matthews, and their immediate family members.
Also effective immediately after market closing on December 30, 2016, the Minimum Investments in the Institutional Class Shares chart under the “Purchasing Shares” section on page 31 is hereby removed in its entirety and replaced with the following:
MINIMUM INVESTMENTS IN THE INSTITUTIONAL CLASS SHARES OF THE FUNDS
(U.S. RESIDENTS*)
Type of Account Minimum Initial Investment Subsequent Investments
All accounts $100,000 $100
Minimum amount for Institutional Class Shares may be lower for purchases through certain financial intermediaries and different minimums may apply for retirement plans and other arrangements subject to criteria set by Matthews.
* Additional limitations apply to non-U.S. residents. Please contact a Fund representative at 800.789.ASIA (2742) for information and assistance.
Finally, also effective immediately after market closing on December 30, 2016, the second paragraph under the heading “Minimum Size of an Account” on page 35 is hereby removed in its entirety and replaced with the following: “The Funds reserve the right to redeem small Institutional Class accounts that fall below $100,000 due to redemption activity. If this happens to your account, you may receive a letter from the Funds giving you the option of investing more money into your account or closing it. Accounts that fall below $100,000 due to market volatility will not be affected.”
For all existing and prospective Investor Class and Institutional Class shareholders of Matthews Asia Strategic Income Fund:
Effective immediately, Gerald M. Hwang no longer acts as a Co-Manager of the Matthews Asia Strategic Income Fund. All references with respect to Gerald M. Hwang in respect of the Fund are hereby removed.
Please retain this Supplement with your records.
******** https://www.sec.gov/Archives/edgar/data/923184/000119312516784870/d288429d497k.htm MICSX
https://www.sec.gov/Archives/edgar/data/923184/000119312516784873/d288429d497k.htm MIPIX
https://www.sec.gov/Archives/edgar/data/923184/000119312516784859/d299132d497.htm All other Matthews Funds & above