More Jumping In
Money poured into fixed-income ETFs in Q1
Mar 31 2016, 14:56 ET
Fixed-income E T F net inflows of $32.5B in Q1 were nearly triple the average of the prior 12 quarters according to Marketfield Asset Management. A notable beneficiary of the trend was the iShares Core. U.S. Aggregate Bond E T F (NYSEARCA:AGG) with about 10% of that $32.5B. This BlackRock (NYSE:BLK) stalwart has pulled in a "remarkable" 14% of all fixed-income E T F flows over the last three years and now has A U M of $34.8B.
The Vanguard Total Bond Market E T F (NYSEARCA:BND) is growing more slowly, but has the 2nd-fastest 3-year growth rate and A U M of $28.4B.
The cash, says Marketfield's Michael Shaoul, doesn't appear to be coming from other fixed-income ETFs, but instead continues a shift from actively-managed to passive funds. Shaoul also notes that flows weren't limited to those benchmark E T Fs, but also included strong moves into Treasury, investment-grade, and high-yield E T Fs.
http://seekingalpha.com/news/3170768-money-poured-fixed-income-etfs-q1
BND
Vanguard Total Bond Market E T F Experiences Big Inflow
March 29, 2016
Read more: http://www.nasdaq.com/article/vanguard-total-bond-market-etf-experiences-big-inflow-cm598895#ixzz44VbpRLWA
Looking today at week-over-week shares outstanding changes among the universe of E T Fs covered at E T F Channel , one standout is the Vanguard Total Bond Market E T F (Symbol: BND) where we have detected an approximate $172.7 million dollar inflow -- that's a 0.6% increase week over week in outstanding units
Read more: http://www.nasdaq.com/article/vanguard-total-bond-market-etf-experiences-big-inflow-cm598895#ixzz44Va5TjtL
The chart below shows the one year price performance of BND, versus its 200 day moving average:

Read more: http://www.nasdaq.com/article/vanguard-total-bond-market-etf-experiences-big-inflow-cm598895#ixzz44VTWvGFz
VTIP
"A Fed less concerned about [inflation] shifts risk to a price breakout," says F T N Financial's Jim Vogel, quickly summing up the bull case on TIPS.
Yellen's dovish remarks yesterday - especially in the face of core CPI up 2.3% Y/Y in February - sent the five-year T I P S yield lower by 15 basis points. It's off another four bps today to negative 0.33%. TIPS have returned more than 4% Y T D, outperforming most vanilla Treasurys, according to Barclays.
Pimco and BlackRock are among those bullish on the paper, and TIPS E T Fs have raked in a record $2.14B this quarter.
http://seekingalpha.com/news/3170373-tips-stay-popular-yellen
Vanguard Short-Term Inflation-Protected Securities Index Fund Stock Chart
Read more: http://www.nasdaq.com/symbol/vtip/stock-chart#ixzz44VYWxf5Z

FYI: With U.S. gasoline selling under $2 a gallon, food prices relatively flat and Wall Street
bond traders betting on 1.5 percent annual inflation as far the
eye can see, it may seem like the wrong time to worry about
rising consumer prices.
But some voices - including a few at the policy-setting
Federal Reserve - are suggesting consumer inflation could take
off faster than expected.
Regards,
Ted
http://www.reuters.com/article/stern-advice-idUSL2N1710K7
M*TIP Fund Returns:
http://news.morningstar.com/fund-category-returns/inflation-protected-bond/$FOCA$IP.aspx

FYI: It’s probably no surprise that the S&P 500 high quality index has outperformed the S&P 500. But what is surprising, to me anyway is that the S&P 500 low quality index has also outperformed the S&P 500 (as well as the high quality index!). How is this possible? It has everything to do with the structure of the index; interesting things happen once you break the link between size and weighting. For example, Boston Scientific, the largest weighting in the low quality index, is just the 188th biggest stock in the S&P 500 index.
Regards,
Ted
http://theirrelevantinvestor.com/2016/03/30/before-you-trash-smart-beta/

Not surprising, since PRPFX has lost $14 billion (or more than 80%) of its assets since 2012. That's bottom 8% for 3 yrs and bottom 5% for 5 yrs. Yeah, this year in top 1%, but that's because of its gold allocation. So nothing changes in this fund's allocation, and there is next to nothing going on from an active management standpoint, but annual expenses have actually increased each of the last three years. Perhaps with sales by commission brokers the fund will gain some assets? But for many advisors who left the fund, the A & C shares are a desperate measure to even stay afloat as a company. The fund company's other three funds have gone nowhere. Even it's Short-Term Treasury fund has lost money every year for the past 7 years. That is pretty hard to do.

The fund that makes the most money going forward would be your best inflation hedge - be it in technology, utilities or watermelons. :)
There are many funds whose promotional literature and/or prospectuses claim to be good inflation hedges. There's a dilemma here in that the U.S. hasn't really experienced serious inflation for over a decade. That means that the 10-year performance records on these funds don't tell us much. In fact, the best of them probably lagged the broader markets over that period.
Hell, my guess is as good as yours. I'd guess a fund like PRNEX might work in a period of serious inflation (despite the fact that its manager doesn't think you should currently own it). Commodities funds and gold funds might do well during such a period, Funds investing in foreign currencies should do better than those holding U.S. denominated bonds. One thing you would not want to own during a period of heavy inflation (10%+ per year) would be a long-term bond fund loaded with bonds yielding 2 and 3%. Umm ... Don't overlook cash. Many money market funds yielded 15-20% during the heady inflation days of the 80s.
I have no favorite (but dabble in several) and, as I said, choosing one is tough if you're looking at 10-year returns. Won't tell you a damned thing.

http://www.sec.gov/Archives/edgar/data/357298/000089843216002113/a485apos.htm
"N" class for existing investors.
Excerpt from filing:
Who Can Buy Class N Shares
Class N shares are offered without any sales charge to the following types of investors (see “Opening an Account”):
•Clients of financial intermediaries who: (i) charge such clients a fee for advisory, investment, consulting or similar services; or (ii) have entered into an agreement to offer Class N shares through a no-load program or investment platform.
•Investors who invest directly in a Portfolio.
•Shareholders who owned shares of any Portfolio prior to May 31, 2016 may continue to purchase Class N shares of any Portfolio.
•Retirement and other benefit plans.
•Endowment funds and foundations.
•Any state, county or city, or its instrumentality, department, authority or agency.
•Accounts registered to insurance companies, trust companies and bank trust departments.
•Any entity that is considered a corporation for tax purposes.
•Investment companies.
•Trustees, officers and other individuals who are affiliated with the Trust or the Investment Adviser.

@bee: Speaking of John Hancock Dimensional Fund Advisors ETFs, they launched 5 more yesterday. They all trade on the NYSE for anyone to purchase.
Regards,
Ted
http://www.etf.com/sections/daily-etf-watch/daily-etf-watch-ishares-plans-esg-funds

I don't believe individual investors need an advisor to purchase these ETFs. Not exactly a DFA fund wrapped into an ETF, but here are the 11 ETF options:
https://etf.jhinvestments.com/etf/our-etfs.html
Informational Articles:
investmentnews.com/article/20150713/FREE/150719984/dimensional-john-hancock-in-partnership-to-build-their-first-etfs
riabiz.com/a/4935524171120640/how-dfa-is-putting-its-john-hancock-on-the-etfs-category
DFA VS. VANGUARD VS. E.T.F.'S
evansonasset.com/?Page=20

@bee: I think such a federal retirement system for all who toil in the public sector would only be possible in a highly-centralized economy. I'm thinking of European countries in which the state is the employer of train drivers, school teachers, and functionaries. In France, for example, the public sector accounts for about 25% of the economy. Over here, we can't even get agreement on a national identity card let alone a single-payer health system. FWIIW, I'm a retiree from a public university with my retirement plans in TIAA-CREF.

Since we are on that topic, here's Vanguard's Wellington Fund:
http://www.sec.gov/Archives/edgar/data/105563/000093247116013013/ps21022013.htm
497 1 ps21022013.htm SUPPLEMENT TO WELLINGTON
Vanguard Wellington™ Fund
Supplement to the Prospectus and Summary Prospectus
Important Note Regarding Vanguard Wellington Fund
Vanguard Wellington Fund will be closed to all prospective financial advisory, institutional, and intermediary clients (other than clients who invest through a Vanguard brokerage account).
The Fund will remain closed until further notice and there is no specific time frame for when the Fund will reopen. During the Fund’s closed period, all current shareholders may continue to purchase, exchange, or redeem shares of the Fund online, by telephone, or by mail.
The Fund may modify these transaction policies at any time and without prior notice to shareholders. You may call Vanguard for more detailed information about the Fund’s transaction policies. Participants in employer-sponsored plans may call Vanguard Participant Services at 800-523-1188. Investors in nonretirement accounts and IRAs may call Vanguard’s Investor Information Department at 800-662-7447.

Updated to on or about April 29, 2016:
http://www.sec.gov/Archives/edgar/data/1217286/000119312516520922/d152885d497.htm

http://www.sec.gov/Archives/edgar/data/791107/000093247116013031/ps82042013.htm
497 1 ps82042013.htm PARTIAL CLOSED SUPPLEMENT
Vanguard Convertible Securities Fund
Supplement to the Prospectus and the Summary Prospectus
Important Change to Vanguard Convertible Securities Fund
Vanguard Convertible Securities Fund is now open to new accounts for institutional clients who invest directly with Vanguard.
The Fund will remain closed to prospective financial advisory and intermediary clients (other than clients who invest through a Vanguard brokerage account) until further notice, and there is no specific time frame for when the Fund will reopen for new account registrations by these clients.
During the Fund’s closed period, current shareholders may continue to purchase, exchange, or redeem shares of the Fund online, by telephone, or by mail. Participants in certain qualified retirement plans may continue to invest in accordance with the terms of their plans.
The Fund may modify these transaction policies at any time and without prior notice to shareholders. You may call Vanguard for more detailed information about the Fund’s transaction policies. Participants in employer-sponsored plans may call Vanguard Participant Services at 800-523-1188. Investors in nonretirement accounts and IRAs may call Vanguard’s Investor Information Department at 800-662-7447. Institutional investors may call Vanguard’s Institutional Division at 888-809-8102 or may call their relationship managers directly.
© 2013 The Vanguard Group, Inc. All rights reserved.
Vanguard Marketing Corporation, Distributor. PS 82 042013

@David_Snowball, Speaking of Leuthold , I'm curious to see if you made the decision to move money from FPACX to LCORX. After reading your thoughts and looking into the fund, I decided to go with LCORX as a more conservative hold in my portfolio. Looks like by the end of 2015, they were down to about 40% net equity holdings. Just wondering what you ended up doing.

For what interest it holds, Mr. Horn came across as one of the most deeply thoughtful guys we've interviewed. The audio of our 2015 conference call with him is on our Featured Fund page for Polaris.
David

FYI: (Click On Download)
Regards,
Ted
http://www.moneylifeshow.com/highlights.asp
M* Snapshot PGVFX:
http://www.morningstar.com/funds/XNAS/PGVFX/quote.html
Lipper Snapshot PGVFX:
http://www.marketwatch.com/investing/Fund/PGVFX
PGVFX Is Ranked #5 In The (WS) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/world-stock/polaris-global-value-fund/pgvfx
Fund Website:
http://www.polarisfunds.com/

http://www.sec.gov/Archives/edgar/data/882748/000110465916107932/a16-7423_1497.htm
497 1 a16-7423_1497.htm 497
The Boston Trust & Walden Funds
One Beacon Street
Boston, MA 02108
Boston Trust Small Cap Fund
Walden Small Cap Innovations Fund
Supplement dated March 28, 2016 to the Prospectus and Statement of Additional Information (“SAI”)
each dated August 1, 2015
Effective April 1, 2016, the Boston Trust Small Cap Fund and the Walden Small Cap Innovations Fund will no longer be closed to new investors. Accordingly, all references to the Funds being “closed to new investors” in the Prospectus and Statement of Additional Information are deleted in their entirety.
Please retain this supplement for future reference.
This Supplement, and the Prospectus and Statement of Additional Information (“SAI”), each dated August 1, 2015, provide relevant information for all shareholders and should be retained for future reference. The Prospectuses and SAI have been filed with the Securities and Exchange Commission, are incorporated by reference, and can be obtained without charge by calling 1-800-282-8782, extension 7050.

FYI: At least one large fund manager is not buying into Argentina's turnaround story and believes the country's first international bond in over 15 years may not offer as much value as local debt in Mexico and Brazil.
Regards,
Ted
http://www.reuters.com/article/latam-bonds-franklin-rsc-idUSL2N16W04W
M* Snapshot TPINX:
http://www.morningstar.com/funds/XNAS/TPINX/quote.html
Lipper Snapshot TPINX:
http://www.marketwatch.com/investing/Fund/TPINX
TPINX Is Ranked #17 In The (WB) Fund Category By U.S. News & World Report:
http://money.usnews.com/funds/mutual-funds/world-bond/templeton-global-bond-fund/tpinx

Altruist Financial Advisors seems to have some curious notions regarding Vanguard:
"For those who do not have access to DFA, we suggest they limit their bond holdings to domestic bond funds." A blanket rejection of VTIBX without even mentioning it.
(That fund was started in 2013, and the page has information from at least 2014, so this is not a matter of the fund not existing at the time of the writing.)
" However, the existence of an ETF share class makes [VTMGX] quite a bit more capital-gains tax-efficient than it would otherwise be."
Vanguard has always stated that the tax value of ETFs (at least for cap-weighted index funds) is overrated (i.e. they are not "quite a bit more capital-gains tax-efficient'). The data bear this out not only generally but specifically for this fund.
The fund was created in 2014 as the result of a merger between Vanguard's tax-managed foreign developed markets fund and its "regular" fund. See:
http://mutualfundobserver.com/discuss/discussion/12700/what-happened-to-vdmix
So I went back to look at cap gains distributions for the "regular" fund VDMIX (no ETF share class, not tax-managed):
Per share cap gains distributions (from the 2013 prospectus:
2013: - (six months ended April 30)
2012: - (full year)
2011: -
2010: -
2009: -
2008: $0.005
To put that last figure in perspective, total distributions/share were $0.387.

Hi, guys.
In a slightly-grumbly post last week, in which I described the current market as "senseless" and allowed that I was reluctant to judge sensible managers for their failure to thrive in its midst, I made the observation that the February bear low was still higher than most bull market highs. Setting aside the question of whether it's reasonable to disregard what might be several years of underperformance (it works for me as long as the full cycle performance is what I signed up for, but I recognize that other folks have shorter time horizons and more intricate sell disciplines), there was also a question about whether the "higher than bear lows" claim was correct.
Several fund managers I'd spoken to last week made that observation in passing. Here's the Leuthold description of current valuations, from their March 2016 Perception for the Professional:

While the past several month's reversion in [valuation] measures has certainly wrung some of the risk out of the market ... the potential downside risks remain substantial. We compared current readings on all four valuation measures [p/e on TTM earnings, p/e on 5-yr normalized earnings, p/cash flow, median price-to-book, all for S&P 500 stocks] to the average recorded at the last four bull market highs, and found that - despite the setback of the last nine months - the median stock still trades at a valuation about 1% above the levels seen at the typical cyclical bull market high. If the bear market reasserts itself ... potential downside is estimated at -29%.

The Total Stock Market is up about 2% since then.
To be clear: I'm not apocalyptic, I'm just wired to be cautious. More importantly, I detest making factual claims (as I did in my original post) without being able to point to the specific evidence behind the claim.
For what that's worth,
David

I use a timing model found within my portfolio itself that keys me when to load value over growth and when to switch and to load growth. I only do this with a small amount of the portfolio due to the many strategies that I may have engaged from time-to-time. I have found through the years this to be one of the better strategies and a most effective one. Just this past month, most of the large cap value funds which I own and are found in my domestic equity sleeve located in the growth and income area of the portfolio out performed it's growth counter part (large/mid cap sleeve) which is found in the growth area of the portfolio by about 10%.
During the recent selling stampede which took place during the first couple months of 2016 I bought in the value area of the portfolio and once equities recovered I then rebalanced and reduced my equity weighting in the growth area by selling two positions that were held in the ballast/spiff sleeve thus keeping my overall equity allocation at it's target weighting of about 50%.
Again, for those that have had their doubts about my sleeve system, I have found my portfolio fund management sleeve system to be beneficial in making investment and strategy adjustments within my portfolio. However, I respect your right to continue to voice your doubts as I feel my system is geered for the more accomplished investor and might not be right for everyone. In addition, to use the system effectively one needs to be somewhat a student of the capital markets and follow their movement as well as that of the portfolio itself. Please note I am not a professional investor, or trader, but simply a retail investor that sought out ways to improve my returns over both the near term as well as the long term that would come through better positioning with a moving asset allocation of sorts.
For those that might not be familiar with my system I have provided a blurb about it below along with the portfolio's current configuration as of March 22, 2016.
Old_Skeet's Fund Sleeve Management System (03/22/2016)
Here is a brief description of my sleeve system which I organized to help better manage the investments that were held in five accounts along with my current positioning. The accounts consist of a taxable account, a self directed ira account, a 401k account, a profit sharing account and a health savings account plus two bank accounts. With this I came up with four investment areas. They are a cash area which consist of two sleeves … an investment cash sleeve and a demand cash sleeve. The next area is the income area which consists of two sleeves. … a fixed income sleeve and a hybrid income sleeve. Then there is the growth & income area which has more risk associated with it than the income area and it consist of four sleeves … a global equity sleeve, a global hybrid sleeve, a domestic equity sleeve and a domestic hybrid sleeve. An finally there is the growth area, where the most risk in the portfolio is found and it consist of five sleeves … a global sleeve, a large/mid cap sleeve, a small/mid cap sleeve, a specialty & theme sleeve and a ballast & spiff investment sleeve. Each sleeve consists of three to six funds (in most cases) with the size and the weight of each sleeve can easily be adjusted, from time-to-time, by adjusting the number of funds and amounts held. By using the sleeve system one can get a better picture of their overall investment picture and weightings by sleeve and area. In addition, I have found it beneficial to xray each fund, each sleeve, each investment area, and the portfolio as a whole quarterly. Again, weightings can be adjusted form time-to-time as to how I might be reading the markets and wish to weight accordingly. All funds pay their distributions to the cash area of the portfolio with the exception being those in my 401k, profit sharing, and health savings accounts where reinvestment occurs. With the other accounts paying to the cash area builds the cash area of the portfolio to meet the portfolio’s monthly cash disbursement amount with the residual being left for new investment opportunity. In addition, most all buy/sell trades settle from or to the cash area with some nav exchanges between funds taking place.
Here is how I have my asset allocation broken out in percent ranges, by area. My current target allocations are cash 20%, income 30%, growth & income 35%, and growth 15%. I do an Instant Xray analysis on the portfolio quarterly (sometimes monthly) and make asset weighting adjustments as I feel warranted based upon my assessment of the market, my risk tolerance, cash needs, etc. Presently, I am about 20% in the cash area, 30% in the income area, 35% in the growth & income area and 15% in the growth area.
Cash Area (Weighting Range 15% to 25% with target being 20%)
Demand Cash Sleeve… (Cash Distribution Accrual & Future Investment Accrual)
Investment Cash Sleeve … (Savings & Time Deposits)
Income Area (Weighting Range 25% to 35% with target being 30%)
Fixed Income Sleeve: GIFAX, LALDX, THIFX, LBNDX, NEFZX & TSIAX
Hybrid Income Sleeve: CAPAX, CTFAX, FKINX, ISFAX, JNBAX & PGBAX
Growth & Income Area (Weighting Range 30% to 40% with target being 35%)
Global Equity Sleeve: CWGIX, DEQAX & EADIX
Global Hybrid Sleeve: BAICX, CAIBX & TIBAX
Domestic Equity Sleeve: ANCFX, FDSAX, INUTX, NBHAX, SPQAX & SVAAX
Domestic Hybrid Sleeve: ABALX, AMECX, DDIAX, FRINX, HWIAX & LABFX
Growth Area (Weighting Range 10% to 20% with target being 15%)
Global Sleeve: ANWPX, PGROX & THOAX
Large/Mid Cap Sleeve: AGTHX, IACLX & SPECX
Small/Mid Cap Sleeve: AJVAX, PCVAX & PMDAX
Specialty & Theme Sleeve: LPEFX, PGUAX, TOLLX, NEWFX & THDAX
Ballast & Spiffs: FISCX
Total Number of Mutual Fund Positions = 45