FYI: exception of Japan and, less so, some in Europe, developed markets are flat or down this year-to-date.
We will use year-to-date total return (closing prices plus yield) through December 22. [1] SPY, the US equity ETF for the S&P 500 cap-weighted index, had a total return of 0.75%. The equal weighted ETF for the same 500 stocks is RSP. Its total return was -3.42%. The worst performing sector ETF was in energy. XLE was -23.29%. ACWX is the iShares MSCI global index without the US. Its total return is -5.74%. ACWI includes the US and holds over 1200 stocks in developed and emerging markets worldwide. Its total return through December 22 [1] was -2.42%.
Regards,
Ted
http://www.ritholtz.com/blog/2015/12/2015-goodbye-2016-hello/print/

FYI: Gunning for yield from bond funds is a loaded bet.
Regards,
Ted
http://www.marketwatch.com/story/junk-bond-debacle-has-bond-fund-investors-feeling-like-its-2008-again-2015-12-28/print

Mutual funds that might be useful in replicating - to some degree - the soon-to-vanish SPHQ (an E.T.F. that currently follows the S&P High Quality Rankings Index) would seem to include the following:
DRIPX: The MP 63 Fund http://portfolios.morningstar.com/fund/summary?t=DRIPX
MPGFX: Mairs & Power Growth Fund http://portfolios.morningstar.com/fund/summary?t=MPGFX
VDIGX: Vanguard Dividend Growth Fund http://portfolios.morningstar.com/fund/summary?t=VDIGX
The first fund [DRIPX] is obscure but available at TDAmeritrade.
ETFs that could be used to construct similar exposure include:
FTCS: First Trust Capital Strength http://portfolios.morningstar.com/fund/summary?t=FTCS
NOBL: ProShares S&P Dividend Aristocrats http://portfolios.morningstar.com/fund/summary?t=NOBL
SPLV: Powershares S&P500 Low Volatility http://portfolios.morningstar.com/fund/summary?t=SPLV
VIG: Vanguard Dividend Appreciation http://portfolios.morningstar.com/fund/summary?t=VIG
XRLV: Powershares S&P500 Ex Rate Sensi L V http://portfolios.morningstar.com/fund/summary?t=XRLV
However, I have mixed feelings about the third and fifth ETFs [SPLV & XRLV], since they are offered by Invesco Powershares, the same folks that are in the process of monkeying with (i.e., IMHO destroying) SPHQ by switching its index to one that has a very different exposure - in terms of sectors and industries - than that (currently) used by SPHQ when it was posting it's admirable record over the last 5 years or so.
Keeping it 'simple' (HAH!), a 50/50 blend of MPGFX and SPLV appears to have very similar exposures and performance, based on historical performance (and for 2009 - 2011, when SPLV did not exist for full year,using SPLV Index returns from S&P website less SPLV tracking error of 26 bps from E T F.com).
Looking at individual holdings of each...

MPGFX owns 50 stocks
SPLV owns 100 stocks
SPHQ owns 132 stocks (current index, until March 2016)
The 50/50 blend of MPGFX & SPLV has 139 stocks. There are 11 stocks shared between MPGFX & SPLV, representing about 19% of the balance of the blended 50/50 portfolio.
Comparing the "BLEND" (MPGFX+SPLV; 50/50) with SPHQ, there is an overlap of 61 stocks. This represents, by dollar balance, 45% of BLEND and 49% of SPHQ.
Of course, most of the "heavy lifting" is being done by SPLV, since both it and SPHQ are subsets of S&P 500. Comparing SPLV only with SPHQ, 51 stocks are shared between these two ETFs. They represent, by balance, 51% of SPLV and 39% of SPHQ.
Again, let me know - via a post here - if you folks come up with other potential 'substitutes'. Thanks.

FYI: Convertible bonds offer access to two otherwise separate security markets. They start out as corporate bonds, which are debt instruments that carry the normal attributes of bond offerings: protection of principal, income generation and favorable position in a bankruptcy situation. If certain criteria are met, the holder of the bond may convert the corporate bonds into common stock of the issuing company. This allows investors flexibility in terms of equity appreciation or an escape from interest rate risk.
Regards,
Ted
http://www.investopedia.com/articles/investing/122415/top-6-convertible-bond-funds-2016.asp
M* Convertible Fund Returns: http://news.morningstar.com/fund-category-returns/convertibles/$FOCA$CV.aspx

Always, ALWAYS book taxable losses.

As I tried to describe above, I don't agree with this, except as a simple rule of thumb if you don't want to get into more detailed calculations.
For example, suppose you are married. The 15% bracket goes up to $74,900. Suppose your taxable income (Form 1040 line 43, notordinary income) typically runs about $76K, including $2K of recognized cap gains.
Let's suppose you've got a loss of $2K that you are debating about taking (for tax purposes).
By assumption, you've got $74K of ordinary income, and $2K of cap gains. The first $900 of those cap gains are taxed at 0% (because $74K of ordinary income, plus $900 of cap gains is still below the 15% bracket limit of $74,900).
The other $1100 of cap gains is getting taxed at 15%.
If you recognize a loss of $1100, you get to save that 15% on the last $1100 of gain. Relatively speaking, a nobrainer. But if you choose to recognize your whole potential loss of $2000, the extra $900 in losses is wasted. It reduces your cap gains to $0, but the last $900 weren't getting taxed anyway, so what's the point?
Instead of having $900 worth of losses "in the bank" that you could recognize January 2, for 2016 taxes, you've squandered the opportunity by using those losses to reduce a gain that wasn't being taxed.
Similar reasoning applies at the 39.6% bracket, where cap gains rates transition again - here from 18.3% to 22.3%. You may be better off deferring the loss if it takes you below $464,850 in taxable income. A problem we should all have. I mention it simply to illustrate that it is not the 0% tax on cap gains that creates this situation, but any transition in tax rates.
There are other situations where recognizing losses may be suboptimal. The ones I'm familiar with follow this general pattern of crossing a threshold amount (often some form of MAGI).

I think bear funds can be used in conjunction with long only funds as a far cheaper synthetic substitute for long-short mutual funds. While I respect investors who object to any sort of shorting on principle, it seems hypocritical to me for any investor to embrace long short mutual funds and not consider the cheaper alternative of building their own. Not only are the fees far less for buying a low cost long-only fund like VASFX or DODGX and combining it with a short fund like GRZZX than the average l-s mutual, but there is also a far greater level of flexibility. You the investor control the amount of hedging you want to do. If you are also investing in a taxable account, you can harvest tax losses far more efficiently than a l-s fund. If the market is up and your bear fund is down, you can sell some of your shares to realize capital losses for a write off. If the market is down and you have losses on your long only fund, you can sell those shares for a tax loss instead. A l-s fund lacks that kind of flexibility and you are essentially paying 1.85% on average for a lightly hedged long portfolio.

Some years I do, others I don't. I look at AGI figures as well as how much tax I'm going to pay. There are reasons why one wants to control AGI (e.g. eligibility for Roth contributions, taxation of SS, etc.).
So my personal answer is: yes I sell losers to offset gains, but no, not necessarily for the purpose of reducing taxes.
Since I am focused on AGI, one of the cons of selling when one doesn't need the loss to reduce AGI below a threshold is that one does not have the loss available to use next year when one might need it.
Another con is that you cannot immediately repurchase the same, or substantially identical fund (e.g. swap one S&P 500 index fund for another, though there's never been a ruling on that). This is rarely a big deal as you can usually find a reasonable substitute. Still, if it's a unique fund you're selling ...
Wash sale rules apply to MFs, so you need to watch out for automatic reinvestments. I usually turn them off before I'm expecting to sell. Otherwise they can trigger wash sales. But if you're liquidating (permanently or at for least 30+ days), those reinvestments don't matter - you'll get the whole loss.
A pro of taking losses with MFs (as opposed to individual stock) is: if you sell before December distributions, you avoid getting taxable dividends. It comes out even (selling before or after distributions) if all the dividends are cap gains and qualified income. But if any of the divs are nonqualified income, you're better avoiding them by selling before the distribution.
With stocks, the dividends are generally qualified, so you can't reduce your tax liability the same way with this maneuver.
Another pro of doing loss harvesting with MFs as opposed to stocks: with MFs, you have a choice of average cost or actual cost. If you're selling in a down market, using average cost will reduce the cost of your short term shares (increasing your short term losses) and increase the cost of your long term shares (decreasing your long term losses). That's a good thing, since short term losses can be more valuable than long term losses.

I can see why one might be interested in NOBL compared with VIG or SCHD, but why when compared, at any point in its life, with RPG, FCNTX, FLGEX, or any cheap SP500 index? When you look closely at the curves, it doesn't even seem to offer downside cushioning particularly. So what's the notional appeal?

msf - Thank you! for suggestions and hint re: M* tool.
I was looking for similar sector weightings and portfolio metrics in a relatively diversified US stock fund.
I didn't know that you could do industry concentration screens with the M* Tool. I will check out NOBL [35 bps ER, $1B AUM] and FTCS [65 bps ER, $165MM AUM].
(Once SPHQ changes to new index, it seemed to me that there wouldn't be anything distinctive about it, as was the case with the old index.)

Those top ten lists (I didn't look that closely) are really interesting. From the brief descriptions, I had assumed that the only difference between the indexes would be the cutoff in the number of stocks selected - a fixed top 100 for the new, and more or fewer for the old (depending on how many stocks were ranked A- or better). Also that the relative weights would be the same (just scaled differently because there would be different numbers of stocks in the two lists).
I was wrong on both counts. The reordering of top ten (e.g. J&J moved from 4th to 1st) shows the weighting algorithm is different. The presence of Apple in the new but not the old index shows that the candidate stocks are different as well - either that or Apple got a really low weighting in the old index, which seems unlikely (even with a different weighting algorithm).
All of this raises the question - what are you looking for in a substitute? Same stocks (as implied by your suggested alternative)? Similar sector weightings? Same style box (cap size/style)? Same geography (US, or is foreign okay)? Yield? Concentration?
The M* basic (free) ETF screener can do a pretty good job, if you know what you're looking for. If you just use a single criterion: ETFs with at least 20% in industrials, you've already eliminated 93% of the ETFs in the database. (Note, I'm using the GIC Industrials classification, not M*' Industrials category, since the classifications posted above are GICs).
If we ignore sector ETFs and foreign ones, we're down to just 8 large cap blends (including SPHQ), 3 midcaps, and 8 small caps.
If we look for funds with at least 10% consumer staples (including companies like Hormel), we've eliminated 99% of ETFs. All of those remaining have a fair amount of consumer discretionary. Focusing on the diversified US ETFs, we have just six large cap blends (including SPHQ), and one mid cap.
Eyeballing these, the closes appears to be First Trust Capital Strength (FTCS). Closest in industrials (25.95% vs. 26.85%), it is also fairly close in the consumer categories: staples (20.23% vs. 17.60%) and discretionary (16.12% vs. 19.19%). Trailing twelve month yield is also very similar, at 1.94% vs. 1.81%.
The portfolio is more concentrated, with 50 stocks vs. 132 for SPHQ. But NOBL also has just 50 stocks, so that doesn't seem to be a concern for you.
The overlap of FTCS with SPHQ seems about the same as that of NOBL.
- FTCS doesn't have #1 Hormel, but it does hold #2 Raytheon while NOBL doesn't.
- Neither NOBL nor FTCS hold #3 Ross, #6 Yum, #7 Nike, or #10 Disney.
- All of them have a healthy slug of #4 J&J.
- Only FTCS shares #5 Omnicom and #9 Lockheed; only NOBL shares #8 McCormick.
Overlap using M*'s stock intersection (premium) tool.
Here's a tool for looking at ETF correlation, unfortunately FTCS isn't in its database.
http://www.etfreplay.com/correlation.aspx
But that's just one way of looking for similar ETFs. What you consider similar depends on what you consider important. Me, I'd just get VIG (or more likely, VDADX) and call it a day. It's among the six large cap blend finalists, cheaper, also focused on high quality stocks, from a great fund sponsor, much higher volume and AUM (for ETF pricing purposes).
Or if you're open to actively managed funds, VDIGX. Here's a M* column comparing the two Vanguard funds: http://news.morningstar.com/articlenet/article.aspx?id=666314

One possible answer ... suggested [?] by looking (at Morningstar) for concentrated owners of Hormel Foods (the top holding of the old index) would/might be....
And the winner is ...... Miss Columbia!
... No, that's not right. Here it is (at the bottom of the card):
Proshares S&P 500 Dividend Aristocrats E.T.F. [NOBL] ...?

msf & heezsafe - Thank you.
Pretty similar. [Just kidding!] Darn it! What do I replace SPHQ with....?
(If anyone can come up with alternatives, please post here. Thanks again.)
>>> Hope that someone else picks up the OLD index!

OLD INDX TOP 3 SECTORS
Industrials............. 27%
Consumer Discretionary.. 20%
Consumer Staples........ 17%
OLD INDX's TOP 10 BY WEIGHT
Hormel Foods Corp HRL Consumer Staples
Raytheon Co RTN Industrials
Walt Disney Co DIS Consumer Discretionary
Johnson & Johnson JNJ Health Care
Ross Stores Inc ROST Consumer Discretionary
Emerson Electric Co EMR Industrials
NIKE Inc B NKE Consumer Discretionary
3M Co MMM Industrials
Omnicom Group OMC Consumer Discretionary
Praxair Inc PX Materials
-----------------------------
NEW INDX TOP 3 SECTORS
Information Tech........ 25%
Industrials............. 20%
Health Care............. 20%
NEW INDX TOP 10 BY WEIGHT
Johnson & Johnson JNJ Health Care
Apple Inc. AAPL Information Technology
Gilead Sciences Inc GILD Health Care
Home Depot Inc HD Consumer Discretionary
Intl Business Machines Corp IBM Information Technology
Boeing Co BA Industrials
Mastercard Inc A MA Information Technology
PepsiCo Inc PEP Consumer Staples
Visa Inc V Information Technology
3M Co MMM Industrials

Here's another "epilogue" that came out late yesterday.
http://www.reuters.com/article/us-funds-thirdavenue-junk-insight-idUSKBN0U627V20151223

FYI: A central theme for 2016 is likely to be diversification. However, spreading risk among several mutual funds doesn’t have to mean that you will water down your returns — investors can be tactical in their portfolio management and potentially juice performance with the right selections.
Regards,
Ted
http://investorplace.com/2015/12/best-fidelity-mutual-funds-2016/print

Ah, yes, the "passive" index fund that "actively" morphs under your feet, sometimes over and over.....
Here's another recent example of the same thing about to happen at Vanguard:
https://personal.vanguard.com/us/insights/article/fund-announcement-Z-implementation-122015
In this one, you'll note that the index fund and its ETF (VEA) will be changing because they will be adopting another index as their benchmark (and thereby become different index funds). But wait--- there's more! For six months, as they are becoming new index funds, they will benchmark to yet another index, a "transitioning" index if you will, called the FTSE Developed All Cap ex US Transition Index.

Here's S&P's page on S&P 500 Quality Index:
http://us.spindices.com/indices/strategy/sp-500-quality-us-dollar
and the page on the S&P 500 High Quality Rankings Index
http://us.spindices.com/indices/strategy/sp-500-high-quality-rankings-index
You can compare their performance by using the graph in the upper right. If you're using the latter page, enter "500 Quality" in the search box to get the new index.
Here's the prospectus update, that has a 1 paragraph description of the new index:
http://www.sec.gov/Archives/edgar/data/1209466/000119312515407937/d233411d497.htm
(see last paragraph on the page)
Looking at the two methodologies, it seems that S&P is using the same rules for rating the quality of each stock - based on return on equity, accruals ratio, and leverage. The new index selects the 100 highest quality stocks and then weights them. The old index includes all stocks ranked A- quality or above, and then weights them.

E T F.com reports [http://www.etf.com/sections/daily-etf-watch/daily-etf-watch-powershares-fund-changes] that SPHQ will be changing it's index:

The PowerShares S&P 500 High Quality Portfolio (SPHQ | A-79) will change its name to the PowerShares S&P 500 Quality Portfolio and its index from the S&P 500 High Quality Rankings Index to the S&P 500 Quality Index.

Anyone familiar with differences between the old and new indices or any other info related to the change?
Thanks.

Dear BobC, how about AQR Long-Short Equity QLEIX ? It has the same managers, somewhat longer history than QMNNX, and a very similar growth trajectory? Strangely, according to M*, QMNNX has turnover 152%, whereas QLEIX has turnover 0%.

Big 4 OneFund sounds like a good nickname for Fidelity's Four-In-One Fund (FFNOX) - big four indexes in one fund: S&P 500, extended market (all US stocks not in S&P 500), EAFE, and US Aggregate bond index. Maybe Fidelity can buy the ticker FOURX.

@ Junkster: You are correct ! The Pimco Muni High-Yield Bond Fund is up 5.7% YTD as featured in one of my eariler links.
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/24954/the-muni-trades-that-pushed-pimco-to-the-top-in-year-of-distress#latest