FYI: You’ve probably read your share of articles pointing out how difficult it is for an investment manager to beat a broad stock index. But 2015 is shaping up to be different.
Regards,
Ted
http://www.marketwatch.com/story/actively-managed-funds-roar-back-here-are-the-best-of-2015-2015-06-23/print

This guy sounds like someone who writes about bonds, not funds. He's separated out the capital (price) appreciation (from $9.68 to $9.93) from the interest return. Look at the phrasing: it's "yielding 3.86% and sitting on a nice year-to-date [price] gain of 2.5%"
But even that is wrong. The 3.86% yield he quotes is the SEC yield that incorporates part of the price change - the portion due to market premium/discount amortization over time, but not the portion due to interest rate changes. The 2.5% price gain is a gross figure and so includes all sources of change. Thus, the amortization is being counted twice.
If he's going to separate price movement from interest payments, he should use something like trailing 30 day rate, or M*'s trailing twelve month rate, which is 3.93%.
As to the substance - junk has an equity aspect to it (if the market is improving and companies are more likely to succeed, the risk of junk defaults decreases, and so the value of junk bonds, like that of their underlying companies, goes up). So whether rising interest rates hit junk hard or not seems to depend on part on whether the market views the increase as a positive sign (companies are strong and improving), or as an impediment (companies cannot grow as easily with higher borrowing costs).

>>>High-Yield Bond Funds: Don’t make the mistake of focusing on interest rates and missing a potentially bigger problem for bond fund prices — credit risk. High-yield bond funds are providing great yields for investors in a low-yield environment and have also held up on the price side thus far in 2015. For example, one of the best high-yield bond funds, Fidelity Capital & Income (FAGIX[5]), is yielding 3.86% and sitting on a nice year-to-date gain of 2.5%. But when things turn south and the flight to safety hits the bond market, investors need to be prepared for stock-like declines. In 2008, in the midst of the last big downturn, FAGIX was hit with a 30% drop.<<<<
I could show you articles that say the exact opposite about high yield bond funds. Namely, that they hold up well when the Fed raises rates. As for his example of FAGIX, who is this guy??? The article is dated June 19 but the YTD return is 5.22%, a big % distance above the measly 2.5% mentioned.

Thanks, Ted.
For the board: Hasn't there been some bit of research which shows that, in fact, quite a few managers are skilled, and would actually do quite well if they stuck to their (say) top 30-50 ideas, rather than overdiversify and, further, if they kept their AUM reasonable ?

"Can't we all just get along?"
Another chart of interest rates since the Constitution was adopted, highlighting max/min points:
http://finance.yahoo.com/blogs/talking-numbers/222-years-interest-history-one-chart-173358843.html
It seems people are nitpicking over the meaning of a word (a sport I too enjoy), while ignoring what I think is a pretty shared understanding of the nature of rates over the past 35 years vs. other time periods.
Another word that people seem to have problems with is "cyclical". With that in mind, take another look at the graph, or sit back and enjoy Blood, Sweat, and Tears take on rates (Spinning Wheel):

@davidmoran
Typical of tunnel thinking, your preconceived concept of the meaning of "atypical" has led you to consider only one meaning of the term.
Webster's two primary definitions are (1) IRREGULAR, (2) UNUSUAL.
http://www.merriam-webster.com/dictionary/atypical
It was the second definition I had in mind while writing. I can't say whether the 1980-2015 period displayed on Kevin's linked CHART http://www.ritholtz.com/blog/wp-content/uploads/2010/08/1790-Present.gif is "irregular" compared to other periods, but it certainly appears "unusual" to me. We've fallen from around 18-20% on the 10-year to as low as 2%. No other period displayed comes close to that decline in magnitude.
DavidM - You are entitled to your own interpretation of word/words. However, that should not blind you to the broader message of the writer - nor lead you to attempt to cast another in the role of villege idiot as you seem prone to do. You know all too well that words often convey a wide range of meanings and it is context which further clarifies author's intent.
FYI: Some words synonymous with or related to "atypical" - from Thesaurus.com
abnormal
bizarre
deviant
different
flaky
odd
peculiar
strange
unusual
weird
aberrant
anomalistic
anomalous
curious
eccentric
exceptional
extraordinary
strange
uncommon
unexpected
unnatural
unorthodox
anomalous
devious
divergent
---
Added: DavidM - No need to attack Kevin. The burden of proof is on you to produce a contradictory chart. Generally, unless otherwise specified, I assume our discussions of stocks, bonds, interest rates, mutual funds, etc. post-date the Civil War Period (from around 1865 on). However, you can toss-out anything you want. Go clear back to the Dark Ages if you can find it!

FYI: Active fund managers are skilled and, on average, have used their skill to generate about $3.2 million per year. Large cross-sectional differences in skill persist for as long as ten years. Investors recognize this skill and reward it by investing more capital in funds managed by better managers. These funds earn higher aggregate fees, and a strong positive correlation exists between current compensation and future performance.
Regards,
Ted
http://blog.alphaarchitect.com/2015/06/19/surprise-some-active-managers-are-skilled/

FYI: The Federal Open Market Committee (FOMC) meeting has concluded and bond investors are still nervous about a possible rate hike coming later in 2015.
Regards,
Ted
http://investorplace.com/2015/06/worst-types-of-bond-funds-to-own-now/print

You are not getting the point, facts-man. Think about it. Meaning datasets. What does it mean to insist that the last 3.5 decades of anything are or have been 'atypical'? Maybe if you are speaking of global temperatures. (For some, not.) But not this. Would you assert that that last period of stock trading has been 'atypical' because commissions are so very much lower than they were before 1980? How about AIDS treatments? Dental health in Asia? GOP centrism, or actually its opposite? Asian youth classical chops? NBA skin color? American female assertiveness in the workforce? Youngster coddling / self-esteem movement? I mean, think thoughtfully about the wording. What constitutes historical inertia and typicality / atypicality for you?

The past 35 years have in fact been atypical for interest rates, and facts are facts and are not self-contradictory:
CHART
Kevin

>> The past 35 years have been decidedly atypical
I get your point, but this sentence is self-contradicting, whether for interest rates, inflation, various infections, batting averages, mpg, human height, anything.
As for the general Bogle / age / bonds thing, anyone who does so might want to dig deeper into it instead of simply parroting hoary bromides. Was not technically true back when, is not so now, was not so in between.

This updated link at the WSJ was accessable at posting......
WSJ article
And the Supreme Court ruling regarding portions of ACA is pending, too.

Sorry, I can't even relate to this question - as posed by Merreman. ... Problem is this: The past 35 years have been decidedly atypical for interest rates (and by association bonds) which, except for only brief respites, have trended continually downward since around 1980 when Fed Chair Paul Volker burst the inflation bubble by ratcheting-up the overnight lending rate to 20%. Making investment allocation decisions at/near market highs is risky. That's true not only for bonds, but for stocks, gold, oil, emerging markets and real estate. So, a healthy dose of skepticism regarding bonds is warranted.
I'd be much more comfortable if Merriman had asked what percentage of one's retirement savings should be in "fixed-income". That's a broader compendium of the (albeit bond) market and would allow, perhaps, greater consideration of short-term bonds, ultra-shorts, cash, foreign currencies, high yield and the like. Certainly, retirees should be in some of these fixed-income assets. For the most part, I'll defer to the fixed-income/allocation people at T. Rowe Price. I suspect their mathematicians and analysists are at least as capable as the good people here at MFO. Unless you have humongous quantities of money to invest, let folks like that make the decision for you under the umbrella of one or more of their allocation funds. They're very good at it. I like TRRIX and RPSIX. On the more aggressive end there's PRWCX which continues to elicit favorable reactions from MFO board participants.
As an aside, I like John Bogle's rule of thumb - but only as a starting point for one's own analysis. He has long advocated having a percentage equivalent to one's age invested in bonds (I'd expand that to the broader "fixed-income" category). And, if my read is correct, Bogle has modified the advice somewhat in recent years, faced with the harsh realities of historically low interest rates. One acquiescence of reality has been his advocating of moving to shorter and shorter bond maturities as rates declined; and the other is his more recent advice to include one's anticipated Social Security income as part of one's bond holdings (effectively reducing one's actual allocation to bonds). The fellow may at times appear rigid and stubborn - but he's not dumb.
---
Footnote: While I don't consider my own allocation decisions necessarily pertinent to the discussion or instructive to others, in the interest of full disclosure here's my latest M* X-Ray (age 70).
Cash 17%
Bonds 28%
U.S. Stocks 31%
Foreign Stocks 12%
Not Classified 13%

Hi MJG,
Thanks for the compliment and the inquiry.
The person that I learned the most from regarding special investment strategies was my late father. I have commented on some of these in prior post. A few I most often use are noted below.
One that has been a family favorite, for a good number years, is a seasonal strategy often referred to as “Sell in May and Stay Away to St. Leger’s Day. Seems to work more times than not. Naturally, I don’t sell out of the markets; but, I do reduce my allocation to equities during the summer months and then scale back upwards towards fall, through the winter months and usually through spring. If things began to fall apart I exit the special position(s).
Another one is to make sure I have a good weighting towards oversold sectors. I strive to maintain at least a five percent weighting in minor sectors of materials, real estate, communication services and utilities. And, in the major sectors of consumer cyclical, financial services, energy, industrials, technology, consumer defensive and healthcare, I strive to maintain at least a nine percent weighting in these (even if they are out of favor). In doing the math this adds up to 83%. This leaves 17% that can be move to sectors where opportunity is perceived to knock. I start with an asset compass to track the assets that I have chosen to follow and invest in. In addition, I use some simple technical analysis indicators such as money flow, relative strength, MACD, slow stochastic and simple moving averages (50 & 200) plus the price action itself along with P/E Ratios and a couple of other things.
Nothing really fancy to write about just some old fashion down home research and deployment of capital when deemed warranted. Think back to my writings as to how I use to bet the dogs many years ago. It was a simple system that worked more times than not. That was to bet three dogs in each race to win, place or show and especially if they were running in lanes two through seven. Often times the dog running in lane one gets pinched into the rail. After doing statistical analysis on which lanes win more often than the others and betting strong dogs when running in them … Well it develops into a clever system type approach.
And, last but not least I feel my investment sleeve system that I have written about in the past has been most beneficial along with selecting quality funds to invest in that have a history of good performance has also played a part to this success.
This is probably not the response you were seeking … but, it is what it is. And, that is a good number of times it comes down to nothing more than “A Scientific Wild Ass Guess.”
Respectfully,
Old_Skeet

This area and subject was discussed here previous. Hey, just issue a boat load of bonds and have at it, eh???
More M&A in a variety of company areas is still in the works; and those hoping to act before rates for bond issues become more expensive.
Party on........
Story here.....
Regards,
Catch

I have given annuities a lot of thought recently in my retirement planning. The only that ones that make half way sense are deferred annuities. And there especially the ones where the recent Treasury rule allows you to exempt up to $125,000 in your IRAs from the RMD rule. Still, I just can't see the financial allure of annuities of any stripe or color. Piece of mind and psychological allure I can understand and peace of mind in old age is a powerful motivator. The bottom line with annuities are they seem more of a return of principal gimmick for x amount of years and then after that you better hope you live a long life (real long) to reap some real benefits. But I am always open to differing opinions.
Edit: If anything, maybe suited for a small, very small portion of your retirement nest egg.

This is a most interesting study.
I found review of the chart most interesting as my asset allocation range for stocks is a low of 40% to a high of 60%. From the chart, the 40/60 mix returned 8.8% with a worst drawdown of 25% while the 60/40 mix returned 9.9% with a worst drawdown of 38%. Since, 2009 the 40/60 mix has returned an average of 7.4% per year while the 60/40 mix returned 10.0% ... and, Old_Skeet's asset allocation ranged for the most part somewhere in between these two mixes; but, with moving in and out of some special equity positions (spiffs) averaged 15.7% for the same time frame. And, folks that is a lot of added alpha being generated from using those spiffs. From my recollection, I believe there were a few times that my asset allocation did work its way, from capital appreciation, on my equities upwards to around 65% before being trimmed back.
In troubling market times my portfolio's asset allocation would allow for a mix of cash (30%), bonds (30%) stocks(40%). Currently, I am at about cash 20%, bonds 20%, stocks 50% and other 10% as reflected in my most recent portfolio's Instant Xray review.
As Flo states in those Progressive Insurance commercials ... "Feeling Kinda Good" ... and, "lucky" after this brief study.
Now off to the beach ... and, hoping you have a pleasant summer weekend.
Old_Skeet

FYI: The way financial advisers charge for their advice often makes no sense, and it needs to change.
The typical adviser charges absurdly high fees to manage your money, often with mediocre results—but next to nothing to provide financial-planning expertise, which can be hugely valuable.
Regards,
Ted
http://blogs.wsj.com/moneybeat/2015/06/19/why-youre-paying-too-much-in-fees/tab/print/

FYI: (Scroll & Click On Article Title) The Best Annuities
Fixed-income annuities have never paid out so little, and yet had so much appeal. These annuities, which provide a lifetime of guaranteed income, are paying out 12% less, on average, than in 2011, and 25% less than in 2007. And yet sales jumped 17% last year, to their highest level in five years.
Regards,
Ted
https://www.google.com/#q=The+Best+Annuities+

Yes. It looks like a dividend was paid on 5/29.
https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/00766Y414