Ben. Just for record, we addressed your ZEOIX comment above here:
https://www.mutualfundobserver.com/discuss/discussion/comment/95497/#Comment_95497

Just added metrics to screen for "Out of Step Twos" with MFO Premium MultiSearch tool (click to enlarge)...

Just added metrics to screen for "Terrific Twos" with MFO Premium MultiSearch tool (click to enlarge)...

The Morningstar link (when I click on the funds) appears briefly, then I get an "error" message. Same thing happens when I try to look at the "quote" pages directly from Morningstar. Poop! ...Just looked at them via Google Finance. They want a $50,000.00 minimum to get in. They're not operating that fund for the likes of me.

It's the quality of the business much more than covenants that provide protection to bond holders. You're already giving up lots of protection by investing in junk - the entire company may be shaky, or these may simply be very junior bonds, the first to default if the company later develops problems.
Here's a background paper by Loomis Sayles (admittedly written at the tail end of that 33% covenant-lite junk bond period, as opposed to the current 70% environment). Its headline states clearly that what matters is credit quality. The text goes on to explain what covenants can and cannot do in terms of protection.
https://www.loomissayles.com/internet/InternetData.nsf/0/0BF67A378755F21085257B5000566A43/$FILE/CovenantLitePaper.pdf
(Remember too, that Meridith Whitney predicted a massive run of defaults in munis, which she later clarified to include "technical defaults", i.e. minor breaches of covenants; for the most part real money wasn't affected.)
LS writes that "As it turned out, covenant-lite loans did relatively well versus covenant heavy loans over the course of the global financial crisis [see graphic data in paper]. In fact, the [ratings] agencies admitted as much, but could not let go of the concern and warned that maybe next time it will be worse. Maybe, maybe not."
Gundlach continues to push his sector of the market (mortgage backed securities) without explaining the specific risks associated with the asset class that relate directly to changing interest rates:

“Buy things that people foolishly don’t understand, like mortgaged-backed bonds,” Gundlach advised.
“Get out of things, like investment-grade bonds, that people don’t understand ..."

Say what?

Let me take an "espresso shot" at this by sharing the research of Russel Napier. The last few minutes of this interview explains the historical problem of chasing yield, especially EM corporate debt (High Yield).
My paraphrasing his words:
When open ended funds, seeking a 5% yield for their client (the pensioner), invest in HY debt and that HY bond defaults on its obligation, the manager ends up having to sell something else to meet redemptions and/or cover the bad debt, the risk here is contagion (where a bad asset impacts and spreads to "less bad" assets). Something small can have a very big impact on the larger whole.

I will also link a longer presentation that is a bit "noisy" at the start of the video so fast forward through the introduction to the start of his presentation.
Much like we have come to know words like "Quantitative Easing" and "Austerity", Mr Napier discusses the next possible financial tools still left in the tool box such as "Financial Repression" and "Macro-prudential Regulation".

The subject here reads like Goldilocks test results. The overall thought here is related to the MFO junk bond link in PART 2.
PART 1: Once upon a time, there was a little girl named Goldilocks. She went for a walk in the forest. Pretty soon, she came upon a house. She knocked and, when no one answered, she walked right in.
At the table in the kitchen, there were three bowls of porridge. Goldilocks was hungry. She tasted the porridge from the first bowl.
"This porridge is too hot!" she exclaimed.
So, she tasted the porridge from the second bowl.
"This porridge is too cold," she said
So, she tasted the last bowl of porridge.
"Ahhh, this porridge is just right," she said happily and she ate it all up.
How can we trust Goldilock's assessment of hot, cold and just right? What is the baseline, how does she compare with a peer group of porridge temperature testers?
PART 2: Now. A recent link here (not directed at you @Ted , but the article author)
https://www.mutualfundobserver.com/discuss/discussion/36721/u-s-junk-bond-funds-post-4th-biggest-week-of-outflows-ever
--- relative to the article:
.....would be nice if these data folks related the money values relative to 1992 or whatever time frame they choose to a "percentage" of total values involved; as to have a reference point for now.
What is this $4.4 billion withdrawal in terms of total monies in the HY sector? And how does this relate to 1992 values?
Oh, well; reader beware, eh?
GOSH, couldn't resist: All data believed accurate.
---U.S. high yield bonds outstanding value, July, 2017
$1.5 Trillion
So, HY outflows at $4.4 billion were .29% of total value, yes? Is this going to blow up the HY bond area and take equities with it.......???
PART 3: As to the .29% sell off/withdrawals in the HY sector; this could be similar to my telling the lady down the street who was born in 1925, that the St.Gaudens,1925-D, $20 gold piece presented to her on her birth day, by an uncle, recently declined in value by .29%; but that she should not be too concerned, as the worth of the coin was still acceptable.
https://www.ebay.com/itm/1925-D-ST-GAUDENS-20-NGC-MS-65/172873495315?hash=item2840103313:g:CvQAAOSwIdpZwVnz
NOTE: By reading this far into this write, you have electronically signed my "hold harmless" agreement regarding content and accuracy; as this document was formalized while under the influence of OTC head cold medicine.
Comments, corrections or suggestions wholly accepted.
Summary: I'm just asking for a bit of proper reporting, i.e.; junk bond outflows.
End of whine !!!
Thank you.
Catch

Thank you David. You highlighted Alambic Small Cap Value Plus Fund ALAMX. Alambic is another California-based shop. A quant shop. Each of its four young funds have outperformed out of the gate (click image to enlarge) ...

Connecting the David Swenson discussion dots:
https://mutualfundobserver.com/discuss/discussion/36708/conversation-with-david-swenson#latest
@MikeM2, using VWINX (VWENX) as a retirement distribution strategy is also another worthy attribute of the fund.

VWINX is the clear winner. Providing 25 years of inflation adjusted 4% annual distributions with a residual value over 89% greater than its beginning value

long-term-growing-income-open-end-mutual-fund-possible

**But Yale’s allocation to U.S. stocks is simply too low. And Swensen may need to acknowledge that the passive strategies he derides have stacked up well against endowments in the past 10 years.**
In Dr. Swenson's book he lays out a passive portfolio with Vanguard funds for the average investor(like me). Derides seems a little strong. The article didn't mention the portfolio's standard deviation relative to the SP500 or a 80/20 stock bond portfolio. Something else I find interesting is that Vanguard's Wellesley Income (40%dividend/value stock/60% income) has a 10 year record competitive with the SP500 if you consider that that the Admiral shares are 15 basis points and the 10 yrs STD deviation is 6.34.
JMHO,
Mike

FYI: (Click On Article Title At Top Of Google Search)
Pamela Corrigan says her biggest challenge in a time of higher markets is to push back on clients who want more-aggressive trading.
Regards,
Ted
https://www.google.com/search?ei=AvgPWpf3L4LdmwHwtpDQAg&q=+Seeking+Safe+Dividend-Paying+Stocks+In+A+Pricey+Market+Barron's&oq=+Seeking+Safe+Dividend-Paying+Stocks+In+A+Pricey+Market+Barron's&gs_l=psy-ab.3...22047.29550.0.29814.17.17.0.0.0.0.201.1885.10j5j1.16.0....0...1.1.64.psy-ab..1.3.474...35i39k1j33i160k1.0.8CAjHPL6Ixk

FYI: U.S. fund investors walloped high-yield funds with their biggest week of withdrawals since March, Lipper data shows.
The junk bond mutual funds and exchange-traded funds posted $4.4 billion in net withdrawals during the week ended Nov. 15, the fourth-largest weekly outflow on record dating back to 1992.
Regards,
Ted
https://www.fa-mag.com/news/u-s--junk-bond-funds-post-4th-biggest-week-of-outflows-ever-35781.html?print

FYI: Mohamed A. El-Erian is the chief economic advisor for Allianz SE. Before joining Allianz, Dr. El-Erian held positions as chief executive and co-chief investment officer of PIMCO and president and CEO of Harvard Management Company, the entity that manages Harvard’s endowment and related accounts. Dr. El-Erian was also a managing director at Salomon Smith Barney/Citigroup in London and spent 15 years with the International Monetary Fund in Washington, DC.
Dr. El-Erian has published widely on international economic and finance topics. His 2008 best-seller, When Markets Collide, was named a book of the year by The Economist, and one of the best business books of all time by The Independent (UK). He was one of Foreign Policy’s “Top 100 Global Thinkers” for four years in a row, and is a contributing editor for the Financial Times. His newest book – The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse – is another New York Times best-seller.
Regards,
Ted
https://www.advisorperspectives.com/articles/2017/11/15/mohamed-el-erian-which-asset-classes-are-most-vulnerable

Hello,
Here is the Market barometer report for week ending November 17th.
This week the barometer closed with a reading of 147 (up one point form the previous week) leaving the S&P 500 Index in fair value. The Index closed down 0.13% for the week at 2579. The three best performing sectors for the week were discreationary (XLY) up 1.27% ... staples (XLP) up 0.88% ... and, utilities (XLU) up 0.54%. Industrials (XLI) scored just barely undervalued this week on a technical score basis.
Currently, Old_Skeet is just watching and awaiting a pull back (3 to 5 percent) before putting new money to work.
Have a good week ... and, thanks for stopping by and reading.
I wish all ... "Good Investing."

Thanks Ted. This new inverse ETF makes me chuckle.
While it's true that XRT is the most shorted ETF, it's also true that high short interest in an ETF is usually a predictor of OUTperformance, not UNDERperformance, at least with ETFs that are decently traded.
Here's a test I ran on the period 1999-2017:
Assumptions:
Universe: All Unleveraged Equity ETFs in the Top 50% of average daily turnover.
Rebalance: Weekly on Mondays at the Close
Slippage: Assumed at 0.1% per trade
Ranking: Buy Top 10 each week with highest Short Interest Ratio
Results: 7.2% annualized return for the period, compared to 5.9% for SPY.

Hi Ben. I'm afraid I am the culprit here. I read each of David's profiles and make an "objective" assessment. At the time, he mentioned a few dings, which influenced my assessment. If I recall, here are some of the statements:
Management’s stake in the fund
As of the last Statement of Additional Information (April 2013), Mr. Reddy and Mr. Cook each had between $1 – 10,000 invested in the fund. The manager’s commitment is vastly greater than that outdated stat reveals. Effectively all of his personal capital is tied up in the fund or Zeo Capital’s fund operations. None of the fund’s directors had any investment in it. That’s no particular indictment of the fund since the directors had no investment in any of the 98 funds they oversaw.
Expense ratio
The reported expense ratio is 1.50% which substantially overstates the expenses current investors are likely to encounter.
Fund website
Effectively none. Zeo.com contains the same information you’d find on a business card. (Yeah, I know.) Because most of their investors come through referrals and personal interactions it’s not a really high priority for them. They aspire to a nicely minimalist site at some point in the foreseeable future. Until then you’re best off calling and chatting with them.
Break, break.
Venk and Paige were kind enough to provide an update via telecom last month and after discussion with David, we're trying to set-up a visit with them in mid December for a profile update in January commentary.
Since 2014, they've doubled in AUM ... much better website now, lower er (if not low enough), not sure of director stake yet. But, in any case, they remain genuinely thoughtful in approach to investing and investor solicitation.
Here are some of their impressive risk numbers (click screen to enlarge):

ZEOIX has done precisely what I tasked it to do...serve as a low risk bucket one holding, essentially cash-like, but also to ideally earn 2-3% a year in a no-drama fashion. And, it actually is the best performing of the 5 funds similarly tasked.
Ted, the problem you're making in your analysis is to compare this against a pool of high-yield bond funds...the same mistake that MS makes, and which has been discussed more than once in the MFO commentary.

*hmgodwin

Thank you, openice. I didnt know that the past commentaries were available. Such is sufficient to determine if a personal investment is warranted. Thank you for the knowledge.

Appreciate that!
@lewis braham
Thanks for your cautionary remarks about composite returns -- well-taken. I also find these returns helpful but not definitive.
Here is a summary of what I learned from a call this morning with Louis Shapiro, one of the PMs-- what he said and what he's verified from my own research/assessment.
The managers have never had liquidity issues in the small cap composite despite having concentrated positions. At the same time, he acknowledges that liquidity could happen in the funds -- a point you raised. What they are hoping for is that the new funds will have sticker assets as well. (Of course, this is unknown,)
His feeling is based on holders in the composites having been long-term investors who have invested more when markets have done well and in those that have done poorly -- a conclusion I reached and brought to his attention after seeing the performance statistics for all their calendar years. He said that they will see how new fund investors react to dislocations in the markets and with more AUM in these funds.
Last, he feels that the new products are repeatable and scalable for those who are not chasing performance, who understand the strategies because they are clearly communicated, e.g., the funds do well in up markets but also see that most of the money is made when stocks fall out of favor for certain periods. (The practical qualifiers)
The funds are now available at Schwab:
SMID Funds: Basic and IRA-- SHDYX N Class $100 basic and IRA; SHDIX I Class 250K; SHDYX Y Class 100K
All-Cap Funds: Basic and IRA -- SHXPX N Class, SHXYX Y Class, and SHXIX -- Ibid.
So currently, the preceding is all I can write. I will remain cautious in view of what you've said and the summary above.

@MFO: A ZEOIX by any other name would smell just like another high-yield bond fund, a far cry from a money market fund ! It has lag the average high-yield bond fund, YTD, 1-5 Yrs., has an extremely high ER and below average yield. So once again, I 'm sticking it in the over for Thanksgiving Day turkey !
Regards,
Ted

Thought this link was worthy of the thread.
The article's introduction grabs you like a good novel:

It had been a little over a week since anyone had seen Karina Chikitova. The forest she had walked into nine days prior was known for being overrun with bears and wolves. Luckily, she was with her dog and it was summer in the Siberian Taiga, a time when the night time temperature only dropped to 42 degrees (6 Celsius). However, there was still one major problem — Karina was just 4 years old.

a-little-knowledge-is-dangerous
Could be Russian Fake news, but I hope not:
dailymail.co.uk/news/article-2721673/The-real-Mowgli-Russian-girl-survives-11-days-nights-lost-Siberian-wolf-bear-infested-wilderness.html