https://www.sec.gov/Archives/edgar/data/831114/000110465916134137/a16-15296_1497.htm
497 1 a16-15296_1497.htm 497
THE RBB FUND, INC.
Schneider Value Fund
Ticker Symbol: SCMLX
Supplement dated July 25, 2016 to the Schneider Value Fund’s Prospectus
and Statement of Additional Information, each dated December 31, 2015
THIS SUPPLEMENT CONTAINS NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION AND SHOULD BE READ IN CONJUNCTION WITH THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION.
On July 21, 2016, the Board of Directors of The RBB Fund, Inc. (the “Board”) approved a plan of liquidation and termination for the Schneider Value Fund (the “Fund”). Effective July 29, 2016, purchases into the Fund will no longer be permissible, and all redemption fees will be waived.
On or about August 30, 2016 (the “Liquidation Date”), the Fund will redeem all investors’ shares at net asset value, and the Fund will terminate. Investors holding shares of the Fund on the Liquidation Date will receive cash representing proceeds from the redemption. Absent other instructions, the cash proceeds will be distributed by mailing a check to each investor of record at such investor’s address of record. The Fund is in the process of liquidating securities and the Fund may invest all or part of the proceeds from the liquidation of portfolio securities in cash equivalent instruments or hold the proceeds in cash. As disclosed in the Prospectus, the Fund is permitted to depart from its principal investment strategy by taking temporary defensive positions (up to 100% of its assets) in cash and eligible U.S. dollar-denominated of money market instruments. During this time, the Fund may not achieve its investment objective.
Until the Liquidation Date, investors may redeem their shares in the manner set forth in the Fund’s current Prospectus. The redemption of your shares will generally be considered a taxable event.
For federal income tax purposes, the tax treatment to investors of the receipt of the liquidating distribution on the Liquidation Date will be the same as would be the tax treatment of a redemption of shares on that date. You may also be subject to state, local or foreign taxes on redemptions or liquidations of Fund shares. The foregoing is only a summary of certain tax considerations under current law, which may change in the future. You should consult your tax adviser for information regarding all tax consequences applicable to your investment in the Fund.
Please retain this Supplement for future reference.

As I commented above, you can get PSLDX for just $100 at Scottrade. But then the transaction fee ($17) would constitute 14.5% of the total committed ($117). And people say 5.75% front end loads are expensive!
Regarding Schwab - I tried a test trade for $100K and asked for the $76 transaction fee to be deducted from this. It wouldn't let the trade go through, because the net amount to invest didn't meet the $100K min. A test trade for $100K plus $76 transaction fee was allowed to go through. Well, except for the fact that Schwab recognized I didn't have that kind of cash in the account :-(

FYI: Multi-alternative-strategy mutual funds have been quietly fading into the background, reflecting the challenges facing alternative strategy mutual funds.
Of the 31 funds shut down this year across eight liquid alt fund categories tracked by Morningstar, 19 were cut from the multi-alternative category.
Regards,
Ted
http://www.investmentnews.com/article/20160725/FREE/160729962?template=printart

On taxes, the unique "feature" of REITs is that almost all dividends are taxable as ordinary income (whichever bracket you are in). In contrast, most other stocks pay "qualified dividends" which are taxed at much lower rates (0% or 15% for most folks). So it is very possible that your REIT fund will have a higher tax cost than a stock dividend fund with two or three times the yield.
Your other questions are much more complicated, so I'm just taking the easy one here and leaving the rest to smarter people to answer.

I've been debating whether to invest more into Real Estate. I have a foot-hold in TRREX (trow price) and TAREX (third ave, international) for many years; I bailed during the "great recession" and never went back in any meaningful way.
I'm looking for more "diversification" and "non-correlation", if you will, to go with my bond allocations. I know very little about "alt" funds and other such non-correlated vehicles.
I also understand REITs are sensitive to interest rates and supposedly rates will be rising sometime (soon?), but when and how fast; I certainly do not have a clue.
This investment will be in a TAXABLE brokerage account, so (relative) tax-efficiency is important. TRREX is not bad compared to others in the category.
I came across Davis RE (RPFRX.LW at FIDO) it has a very low tax-cost ratio and does not look too bad. If anyone has any suggestions or opinions on other worthwhile "relatively" tax-efficient REIT funds, please let me know!
The bottom-line question is, after a good run since the "great recession", is this a bad time to increase my Real Estate allocation (5%-7% of portfolio)?
Any thoughts are greatly appreciated!!
Regards,
Matt
fyi, Also, posted on M*.

PSLDX's performance is amazing when compared to the S&P 500. But I think your intuition is correct and its outperformance is mostly attributable to long-term bonds.
I looked at PSLDX's fund page here: https://www.pimco.com/investments/mutual-funds/stocksplus-long-duration-fund/inst
An interesting point is that its "secondary benchmark" is the following:

S&P 500 Index + Barclays Long-Term Government/Credit Index - 3 Month LIBOR: The benchmark is a blend constructed by adding the returns of the S&P 500 Index to the Barclays Long-Term Government/Credit Index and subtracting 3-Month LIBOR.

In other words, PSLDX return is basically S&P 500 + Long-term bonds. You can think of this as taking your investment amount, leveraging it 2x, and then putting half of it into an S&P 500 index and the other half into a long-term bond fund. The "3-month LIBOR" in the benchmark would represent the interest rate you pay for the leverage -- interest rates have been low so this cost is basically negligible.
If you scroll down to calendar year returns, what you see is that PSLDX's performance does track the secondary benchmark pretty closely every year, i.e. what you are getting is S&P 500 + long-term bond return. Presumably PIMCO can borrow money cheaper than you can -- otherwise you could achieve the same thing by taking out a second mortgage and putting it in Vanguard Long-Term Government Bond Index Fund.
Leverage is often considered very risky, but I suppose the idea is that stocks and long-term bonds should not both decline at the same time. That would be pretty disastrous.

TIBIX - $2.5M minimum (prospectus), $2.5K in a Fidelity IRA. Not quite the 10,000:1 ratio (prospectus vs. brokerage min) that one finds with PIMCO, but 1,000:1 is still pretty darned flexible.
One of the weaker aspects of Merrill Edge is that if it offers a share class NTF, it usually doesn't make the cheaper institutional shares available (with TF).
An exception is MWTIX. That share class carries a min of $3M. It used to be available at many brokerages for a min of $50K. Not small, but potentially reachable for some investors, especially as it can serve as a core fund. Now, Merrill is the only place I've found that still has this "low" min.

TD Ameritrade offers Institutional shares of PIMCO funds without any minimum (but with a transaction fee). Vanguard offer them with a $25,000 minimum (also transaction fee).

Re: "Savings to the underlying funds are expected to result primarily from the elimination of numerous separate shareholder accounts which are or would have been invested directly in the underlying funds and the resulting reduction in shareholder servicing costs. Although such cost savings are not certain, the estimated savings to the underlying funds generated by the operation of the Retirement Funds are expected to be sufficient to offset most, if not all, of the expenses incurred by the Retirement Funds."
MSF: Wow. Nice find! Apparently that's what I remember seeing. Not what I had long assumed. Still helps explain why their allocation funds are a better deal for investors than many others which do level allocation or administration fees.
As for TRRIX not being invested in any institutional class shares, don't be too sure. It does have a 20.3% weighting in PRCIX, Price's New Income Fund. PRCIX in turn holds institutional class shares in two other T. Rowe Price funds: Floating Rate and High Yield. In addition, both TRRIX and PRICX have the ability to invest in Summit Cash Reserves (not institutional - but having a $25,000 minimum) although they appear to have only trace exposure to that fund at present.
Thanks for your input. Interesting.
-
PS: Re TRPTX - I like that one better. .47% ER and invested in institutional shares. But can't quite afford the $1 mil minimum. :)

From a TRP early (October 1, 2004) prospectus:

Savings to the underlying funds are expected to result primarily from the elimination of numerous separate shareholder accounts which are or would have been invested directly in the underlying funds and the resulting reduction in shareholder servicing costs. Although such cost savings are not certain, the estimated savings to the underlying funds generated by the operation of the Retirement Funds are expected to be sufficient to offset most, if not all, of the expenses incurred by the Retirement Funds.

In other words, the savings in the underlying funds (best case) would bring the ER of the Retirement Funds down to zero (not below). The fee table in the prospectus shows each fund as having fees that are exactly offset by the savings, so that the net ER is exactly equal to the cost of owning the underlying funds. Not cheaper - these savings just explain how TRP offers funds of funds with no additional costs.
@Edmond: " Consequently, its my bull-headed belief that we investors should very much care how richly/cheaply priced the assets we are buying/holding are. ... So many investors are proudly 'cost-conscious', but then intentionally invest in a manner which is not 'price-conscious'. Tgt-funds seem to assiduously cling to that latter behavior. "
Perhaps this is just a matter of watch what I do, not what I say, but FWIW, what TRP says:

The allocations shown in the glide path are referred to as "neutral" allocations because they do not reflect any tactical decisions made by T. Rowe Price to overweight or underweight a particular asset class or sector based on its market outlook. The target allocations assigned to the broad asset classes (Stocks and Bonds), which reflect these tactical decisions resulting from market outlook, are not expected to vary from the neutral allocations set forth in the glide path by more than plus (+) or minus (-) five percentage (5%) points.

Generally speaking, this flexibility is the differentiating attribute between asset allocation funds and static balanced funds (whatever their selected balance is).

That's an interesting webpage, one I've visited in the past. But casual viewers should use those Vanguard-collected status with care.
Consider:
The span of those 'average returns' is 89 years. "Averaging returns" is a mathematical exercise, but investors don't experience smoothed-over 'averaged' returns. They experience sequential, erratic returns. Certainly, 20- or 30-somethings might look at those average returns and reasonably conclude to go "all-in" to equities. -- But it may not make a lot of difference for a typical young investor --- as they have relatively little saved. Most or all of income often going for raising kids, placing a down-payment on a home, student-debt servicing, kids' college or for some, 'living large'. By the time many households get round to saving serious dough (many never do!) they may be in their 40's or 50's. Are average 89-year returns something they should expect? What about when they begin the distribution-phase and are withdrawing assets (via RMDs, etc). Should they count on historical 'averaged' returns, or make some reasonable (and conservative) estimate of future returns based on asset prices? I believe John Bogle and others do offer those estimates in interviews from time to time, based on today's prices as a "set-up" for likely prospective returns. Buying long-term Treasurys in 1982 would have reasonably generated a certain forward-return over 30 years. Buying long-term Treasurys today, prospective-returns will be much more compressed.
Even if an investor could obtain a GUARANTEE of receiving those average returns (say in the form of an insurance company annuity etc.) at the terminal date (89 years), if they had to wait 89 years to receive that payout, would they be alive to collect it? My point: 89-year average returns, even if 'guaranteed' are not meaningful for individuals, if one is pushing up daisies when the guarantee is due to them. Ask Japanese equity investors who bought/held in 1988 and are still well under-water today, 30 years later. -- Hey in another 59 years they may enjoy the fruits of their patience....
Then too, the Vanguard site lists the historical return on a 100% bonds portfolio as 5.4%. Consider AGG, which is a proxy for the total (non-junk) US bond market. Presently, the SEC yield on AGG is 1.72%, with an average coupon of 3.2% The average-price of the bonds trade $9 over par. Perhaps 89 years from today, average-returns may match that. Nobody reading this will be around then. What are the likely returns over the next 1,3, 5, and 10 years? --- This would seem to be more relevancy. Are forward returns, using today as a starting point, likely to be closer to 89-year historical, averaged returns OR the SEC yield?

@MFO: In my opinion, when someone is considering their fund allocation to bonds/equities or both combined, I suggest they review Vanguard Portfolio Allocation Models from 1926-2015 that show the historical rate/risk returns from 100% stocks to 100% bonds and the various combinations of both.
Regards,
Ted
https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations

"The average charge for a target-date fund is 0.73% ... The average stock fund charges 0.68%, while the average bond fund charges 0.54%."
I'm surprised the averages are that low. Perhaps if index funds and ETFs are included that's true.

What likely sounds more familiar to you are figures around 1.25%. That's what one gets by equal-weighting funds - giving as much weight to AMDEX (ER 3.38%, an index fund tracking the Israeli market) as to VFINX.
Here's a M* paper from 2014 giving weighted and unweighted (i.e. equal-weighted) averages of funds from 1990 through 2013 - overall averages and averages by fund type. The 2013 figures are very close to the current ones (e.g. 0.67% for weighted average of all US equity mutual funds). You're right that these figures include index funds, but they exclude ETFs, as those are not open end funds.

Contrary to industry practice, you'll find Price's asset allocation and target date funds generally a bit cheaper to own than if you bought the underlying funds yourself.

Theoretically, a fund can't be cheaper than buying the underlying funds. The TRP fund "will indirectly bear its pro-rata share of the expenses of the underlying T. Rowe Price funds in which it invests (acquired funds)." (from prospectus).
Most families may add fees on top of what it costs to own the underlying funds. But there's more going on here. Look at Fidelity - it tacks on a modest fee (about 8 basis points) to its Freedom Index target date funds. The underlying funds are cheap index funds with little profit margin to pay for the extra overhead of running target date funds. In contrast, Fidelity Freedom funds (that invest in actively managed funds) don't tack on an additional fee.
T. Rowe Price may be using index funds as some of the underlying funds, but they're known to be not particularly cheap. So TRP doesn't need to tack on additional fees.
Vanguard takes a different approach. Its target date funds invest in higher cost Investor class shares, rather than Admiral shares. That difference allows it to absorb the target funds' administrative costs without losing money.

The reason I prefer TRRIX to their other retirement funds is that this one doesn't follow any glide slope. (A bit of a control freak).

What it sounds like you want is an asset allocation fund, as opposed to a target date/retirement fund. TRP appears to call TRRIX a retirement fund (as opposed to a Personal Strategy, i.e. asset allocation fund), only because it is a fund of funds; not because it is a real retirement fund.
There are only a few parameters that differentiate various groups of hybrid funds:
1) Glide path yes/no (target date/asset allocation)
2) Fund of funds yes/no (minimal extra overhead for fund of funds, sometimes absorbed)
3) How aggressive (for target date funds, the glide path; for asset allocation the "neutral" mix)
4) Indexed (primarily for funds of funds - are the underlying funds index funds)
BTW, I applaud TRP for offering two different classes of funds with different glide paths, so that one can choose the level of aggressiveness.

A couple things:
I think the TERM 'multi-asset fund' (with or without income) is a creation of fund-industry marketing types.
Any old-fashioned balanced fund which emphasizes income is a 'multi-asset income fund'. (MAIF) I own one, its called Vanguad Wellesley.
Some newer MAIFs add in riskier sleeves-- junk, MLPs, whole-loan products, etc. etc. They are simply stepping out on the risk-spectrum. --- the higher the yield (i.e. the bigger the spread), the bigger the risk.
While I still own some VWINX, my thinking on hybrids (MAIFs or otherwise) has evolved over the past 3-5 years. I generally eschew them, in favor of single-asset products. I suspect that 'bundling' assets has the effect of obscuring how good the manager of each asset-sleeve within the 'bundle' is. [Take OAKBX, for example. The stocking picking was always very good, but Oakmark never had much of a bond desk. They usually loaded their bond-sleeve with Treasurys (US & Canadian) and that was it. The stock picking "carried" the fund overall for many years. Til it didn't.] How does an individual investor get comfortable that each of the asset-sleeves within a hybrid (or "MAIF) is at least average -- and hopefully above so?)
Then too, every asset class will encounter an investing environment with a lousy "setup". At those times, its best to UNDERweight such assets. Most hybrid products have allocation guidelines which require weightings stay within a certain range. Having witnessed 3 massive boom-bust cycles this century (tech, mortgage, energy), I am uncomfortable with "forced" allocations. The lower rates go, the more convinced I am, we are in the 'pleasant' phase of a 4th boom-bust cycle.
Another thing: all commingled products, MAIFs included, assess a MER equally, across all AUM in the fund. But is it really serving investors best to levy (for example only) a flat 1.25% for managing the equity-sleeve, and the same 1.25% for the bond-sleeve. -- Especially if that bond sleeve is often Treasurys, Agencies, and investment-grade paper. --- And especially now that bond coupons barely will cover that MER....). I mean you can find superlative dedicated-bond managers for ~0.50%. Paying 1.25% for the bond sleeve of a hybrid fund seems like you are paying for that bond manager's Alfa Romeo...
FPACX is a good example. It has a superior performance, granted (though performance seems to have suffered with growing assets). It levies a 1.09% on AUM. 34% if AUM is sitting cash. Institutional MMFs are paying NOTHING! I'm not arguing Romick isn't prudent in holding cash --- rather that he should not be charging investors 1.09% for the cash-sleeve. A hybrid can get away with this. Dedicated-asset funds are less prone to charging investors for NOT investing their money.
I'd much prefer to choose single-asset "best of breed" managers for the major asset classes myself. In some cases (say L/C US equities) the "manager" may be Standard & Poors (i.e the index). In others (foreign equities, S/C, REITs, bonds), active managers who persistently excel may be able to be identified. As an asset-class "smells bubbly", I can trim back, rather than relying on a professional allocator, who is frankly, not at all concerned if Edmund's nest-egg is halved due to a forced allocation in a hybrid product.
Just my opinion.

FYI: It is easy to confuse day-to-day noise with actual and significant signals. If you are merely reacting to the latest market action, then what you have is not a plan — you have an instinctual, fear-driven reaction, and it’s the makings of a disaster.
Regards,
Ted
https://www.washingtonpost.com/business/get-there/given-the-brexit-brouhaha-how-did-your-investments-hold-up/2016/07/22/a7bc1198-4d03-11e6-a7d8-13d06b37f256_story.html

"The average charge for a target-date fund is 0.73% ... The average stock fund charges 0.68%, while the average bond fund charges 0.54%."
I'm surprised the averages are that low. Perhaps if index funds and ETFs are included that's true. But for actively managed funds those .68% and .54% averages look low to me. A good actively managed international stock fund often exceeds 1% in expenses.
The debate over target date funds (which vary widely) has been going on now for at least a decade. My thinking is that people who don't read MFO or otherwise take much interest in investing are probably well served by them. Think of them as a default option. For the more financially inclined/literate there's better approaches.
The only retirement fund I own is TRRIX, a conservative 40/60 fund with a .56% ER. Price keeps cost down in part by investing 20% in their S&P index fund. You also get 14-15% exposure to some of their international equity funds. Contrary to industry practice, you'll find Price's asset allocation and target date funds generally a bit cheaper to own than if you bought the underlying funds yourself.
The reason I prefer TRRIX to their other retirement funds is that this one doesn't follow any glide slope. (A bit of a control freak).

@Willmatt72: My own multi-asset bond fund is a global one: PRSNX. Very un-volatile, but extremely pleasing to me re: performance. I bought in Feb. of 2015. Over 17 months, it's given me +4.55%. It's in a Trad. IRA.

Gas here now obtainable at $2.04--- a reflection of the cost of oil. I have an infinitesimally small position in COP. Doing nothing for me. I continue to hold it, noting how ratings of the stock's estimated high put it at anywhere between $44 (JPM) to $71 (BofA-ML). The stock is just above $40 right now. It won't kill me to be patient... Meanwhile, back at the ranch, ("it's a song about Alice, remember!") I hold no dedicated HY bond fund. My all-bond funds are: DLFNX (core-plus), PRSNX (Global multi-asset), and PREMX (EM bonds.) Let the fund Managers do their job, eh? That listing is in order, smallest to highest proportion right now in the portfolio: 2.48%, 10.87% and 14.51%. Very pleased with the solidity and low volatility of DLFNX. PRSNX became a holding on a very tardy basis, recalling a recommendation from someone on this discussion board back in 2009 or so. I've held PREMX since 2010, and it grew to be a riskier than I thought size. I've since reallocated a great deal of it. Gotta be pleased with it THIS year!

Hi @Willmatt72,
Yes, I use hybrid (multi-asset) income funds within my portfolio plus I have a couple of other sleeves that contain hybrid type funds as well.
In my income area I have two sleeves, one a fixed income sleeve and the other is a hybrid income sleeve which consists of the following six funds: CAPAX, CTFAX, FKINX, ISFAX, JNBAX & PGBAX.
In the growth and income area I have four sleeves, two of the sleeves contain only hybrid type funds. One is a global hybrid sleeve and the other is a domestic hybrid sleeve. My global hybrid sleeve consists of three funds: BAICX, CAIBX & TIBAX. My domestic hybrid sleeve consists of six funds: AMECX, DDIAX, FBLAX, FRINX, HWIAX, LABFX + ABALX which is held in my health savings account.
All combined, currently, my three hybrid sleeves make up about 40% of my overall portfolio. I am thinking of bringing this up to 50% through a rebalance process. There are multiple reasons that I use hybrid funds. One is that most of these hybird fund managers use somewhat of an adaptive allocation strategy to postion their funds within their allowable asset allocation ranges. This leaves the other seven sleeves (one in the income area, two in the growth & income area and four in the growth area) which make up about another 40% of the portfolio that I position as to how I am reading the markets. I am thinking of reducing this down to 30%, as hybrids are increased, by reducing the number of fund positions held within the sleeves that I use to position. The other two sleeves are found in the cash area and make up about 20% of my portfolio.
Anyway, this is how I use (multi-asset) hybrid type funds within my portfolio. I have found them, for the ones that I own, to be good income generators while at the same time positioning and adapating to varrying market conditions.