So essentially similar strategy to GMO which so far has NOT worked. We shall see.

Are you referring to the 7y GMO forecasts? That's not the way they invest in all their products.

I received this email from Vanguard yesterday concerning the conversion of my S&P index investor class taxable account with Vanguard (I submitted my request for the conversion):
Our index funds changed investing forever. Now we’re making them even better.
Fund newsNovember 19, 2018
1805
234
link to comment section
More controls (activate to access)
If you’re like many successful investors, you like to keep it simple. That means saving consistently in low-cost, straightforward investments like index funds. We get it. We pioneered index investing for individuals. Simplicity, transparency, and low fees are core to who we are. And we’re constantly looking for ways to build on those values.
That’s why we’re making a change.
We’re lowering costs for more than 1 million current index fund investors and giving new investors one more reason to choose Vanguard. To do that, we’re dropping the minimum investment for Admiral™ Shares on 38 index funds.
Our Admiral Shares were previously available to investors with over $10,000 per fund. Now you’ll only need $3,000 to take advantage of the low expense ratios Admiral Shares offer. In turn, we’re eliminating higher-cost Investor Shares of those same index funds for individual investors.*
What this means for you
Whether you’re just starting out, adding to your portfolio, or catching up, this change can help you:
Reach your goals faster. Lower expense ratios mean more of your returns stay in your account, so it can grow faster. For example, $50,000 invested in Investor Shares might cost an average of $90 per year versus $55 per year in Admiral Shares. A $35 difference might not sound like much. But when it’s compounded over 10 years, it can add over $600 to your bottom line.**
Diversify your portfolio. When choosing how to allocate your money, you’ll have more flexibility to diversify. For example, if you have $10,000 to invest, you can still put it in a single index fund. Or you can split it up into 3 different index funds and get the same low-cost benefits.
If you currently own Investor Shares of any affected funds, you don’t have to do anything. We’ll convert them to Admiral Shares over the next year. Or you can immediately and easily convert your shares using our online process.
Already own Admiral Shares? The change doesn’t affect your current investments. But if you choose to purchase a new fund in the future, you don’t need $10,000 to get the same low expense ratio you’re used to. And you can be sure we’ll continue to look for the best ways to lower costs and help you meet your investment goals.
On a mission to give investors the best chance for success
Vanguard’s story begins with low costs but it doesn’t end there. Vanguard is built for investors. As a client-owned† firm, everything we do is because we care about our clients, want them to succeed, and have no competing loyalties.
This change is one more way we’re looking out for investors. It will allow us to deliver an estimated $71.2 million in savings to clients.††
“No other firm in the industry has demonstrated Vanguard’s track record of delivering cost savings and value to its clients,” said Vanguard CEO Tim Buckley. “Our unique, client-owned structure enables us to consistently pass along economies of scale and lower the cost of investing for our clients, so they keep more of their returns.”
See which index funds now offer $3,000 minimum investments for Admiral Shares
*Investor Shares will still be used in certain situations, such as in retirement plans and fund-of-funds investments.
**Vanguard Investor Shares average expense ratio: 0.18%. Vanguard Admiral Shares average expense ratio: 0.11%. All averages are asset-weighted. Source: Vanguard, as of December 31, 2017. This hypothetical example assumes a $50,000 investment held for 10 years, with an average return of 6%. It doesn’t represent any particular investment. Your actual savings could be higher or lower. The rate is not guaranteed.
†Vanguard is client-owned. As a client-owner, you own the funds that own Vanguard.
††Estimated savings for the identified funds is the difference between the Investor and Admiral expense ratios multiplied by eligible average assets under management (AUM). Eligible average AUM is based on the daily average assets over the past 12 months (November 2017 to October 2018).

I really lucked out with my Wellstrade PMA account (not available anymore) where I have 100 free trades a year INCLUDING transaction fee funds. The scoundrels do not even list their mmkt funds available on the platform, because they would much prefer you make almost nothing in the required sweep account but by calling and digging and more digging I am able to buy FNSXX with a 7 day yield of 2.36 with a $1 minimum purchase instead of the 1 mill for instit buyers. And please do not castigate me for staying with Wells Fargo. I guarantee you in some way or another all banks and brokerages are taking you for everything they can get ,Vanguard included. Banks and brokerages are Not our friends!!The key is to spend the time if you have it, to research and minimize their take and then maximize yours. I just move any money from dividends and sales in the sweep with a click of the mouse into my FNSXX holding and vice versa.

Another place Schwab is making money on that cash is through their robo, Intelligent Portfolio's. Many of these portfolios have 10% or more in cash making fractions of a percent. I've been a proponent of these portfolios and that cash % didn't bother me before. I understand that is how they can offer their robos cost-free, but now I have to give it more thought as MM interest rises along with interest rates. 1/2 my IRA money is in one one of these robos.

So, the sweep account must be used to receive transaction money from dividends, a fund sell, etc. and is also the account that must be used for a purchase of an equity fund, etc.???

Correct. The MM is just another 'fund'. It has a ticker just like a fund. You buy and sell it using the sweep like any other fund.

For anyone like me who does not have a WSJ subscription, here is a link to a review of the WSJ article. Its encouraging to see Bogle expressing his concerns....
www2.philly.com/philly/business/john-bogle-vanguard-wsj-index-funds-blackrock-state-street-fidelity-20181129.html

FYI: Lately, commodities have performed so poorly investors would be forgiven for thinking people no longer need anything to eat, drink, or fuel their cars—just iPhones and subscriptions to Amazon Prime. In the past five years, the average commodity mutual fund has lost 8% a year, while the S&P 500 has gained 10%.
Worse, even when commodity prices have gone up, most commodity funds have failed to fully capture those gains. A phenomenon known as “contango” has been a drag on fund performance. Investors rarely buy commodities directly, instead favoring futures contracts, which are derivatives with expiration dates. Contango occurs when a commodity future’s price is above the current or spot price, so that every time a contract expires, investors must pay more for a new one.
Regards,
Ted
https://www.barrons.com/articles/if-commodities-day-has-come-this-fund-should-be-a-winner-1543496400?refsec=funds
M* Snapshot JCRAX:
https://www.morningstar.com/funds/XNAS/JCRAX/quote.html
Lipper Snapshot JCRAX:
https://www.marketwatch.com/investing/fund/jcrax
JCRAX Is Unranked In The (CBB) Fund Category By U.S. News & World Report:
https://www.marketwatch.com/investing/fund/jcrax

FYI: There no longer can be any doubt that the creation of the first index mutual fund was the most successful innovation—especially for investors—in modern financial history. The question we need to ask ourselves now is: What happens if it becomes too successful for its own good?
The First Index Investment Trust, which tracks the returns of the S&P 500 and is now known as the Vanguard 500 Index Fund, was founded on December 31, 1975. It was the first “product,” as it were, of a new mutual fund manager, The Vanguard Group, the company I had founded only one year earlier.
Regards,
Ted
https://www.wsj.com/articles/bogle-sounds-a-warning-on-index-funds-1543504551

FYI: Investors may be thrilled that U.S. stocks have rallied, pushing the S&P 500 to a 4.4% total return for the year, including dividends, as of the close on Wednesday. But the good times probably won’t last, according to Rob Arnott, founder of the investment research firm Research Affiliates and co-manager of funds such as Pimco All Asset All Authority (ticker: PAUAX).
Regards,
Ted
https://www.barrons.com/articles/sell-u-s-tech-stocks-buy-emerging-markets-says-rob-arnott-1543516901?mod=djem_b_Weekly barrons_daily_newsletter
M* Snapshot PAUAX:
https://www.morningstar.com/funds/XNAS/PAUAX/quote.html

FYI: Over 70% of financial advisors surveyed believe it's going to take a significant correction in the equity markets to wake all investors up to the portfolio benefits of fixed income investing, according to a new survey released today by Incapital LLC, a leading underwriter and distributor of fixed income securities.
Regards,
Ted
https://www.businesswire.com/news/home/20181129005552/en/Significant-Correction-Equities-Wake-Investors-Benefits-Fixed

@MFO: Members: At Morgan Stanley, interest, and dividends are automatically put in a sweep account paying .38%, and clients must ask broker to have them transferred to a money market account paying 1.77% each and every time.
Regards,
Ted

https://www.sfchronicle.com/business/networth/article/Here-s-something-most-brokerage-firms-would-13417
Does this link work ?
Derf
OOOPs I now see your link >

"Most brokerage firms have found a subtle way to squeeze money out of their customers. The trick: switching their sweep accounts from higher-yielding money market mutual funds to lower-yielding bank accounts."
Kathleen Pender has an interesting article in the San Francisco Chronicle on yet another way many brokerages have found to short-change you.

Can't say I bit the hook line & sinker on either of his funds !
Derf+1

How can a strategy said to be market neutral plunge 13-15% YTD?

It’s been an especially rocky and nasty year for most hedge-type funds. In fact, they haven’t done well for many years. And the big hedge funds have experienced huge outflows this year. I don’t pretend to understand it. But there might be more at work here than simply “stupid managers.” High fees for sure. But, possibly, “insane” markets as well based on unsustainable increases in a few large indexes (ie - the elephant chasing his tail).
-
Edit: A couple added late-night thoughts:
- Some hedge funds (including so called market neutral funds) may be betting on an eventual break in the unusually strong Dollar. This might involve holding gold or EM bonds - both of which have slumped sharply since the beginning of the year (explaining some of their dismal showing). The reasoning behind this is that the Fed will “blink” after U.S. equity markets have turned down and stop raising rates. I think they’re right in that assumption - but it’s hard to say when that will happen. BTW - Ray Dalio of Bridgewater is one hedge fund manager who is hedging with gold.
- I think the term hedge fund as a style makes more sense than market neutral. If you want a truly “market neutral” approach - go 100% cash. Excepting that extreme, don’t know how you can remain truly neutral.

FYI: Goldman Sachs Group Inc. says the allure of mutual funds is fading as the year draws to close.
The percentage of large-cap mutual funds outperforming benchmarks has nearly halved to 33 percent from 63 percent in April. That’s been fueled by sector allocation, where overweights in cyclical groups like financials have hurt returns all year, and underweights in defensive shares have hurt during the recent market downturn.
Regards,
Ted
https://www.bloomberg.com/news/articles/2018-11-29/goldman-says-large-cap-mutual-funds-losing-badly-to-benchmarks

They were great in the 2015-16 downturn in everything else, but bad news this time around.
Forget Asness, and onward through the fog.

Agree with @VF. How can a strategy said to be market neutral plunge 13-15% YTD?

FYI: Below is a look at the percentage of total world stock market cap that each country’s stock market makes up. For each country, we show its percentage of world market cap as of today, as it stood on 9/20 when the S&P 500 made its last all-time high, as it stood on election day 2016, and as it stood 10 years ago.
The US currently makes up 39.81% of world stock market cap, which is more than 30 percentage points more than the next closest country — Japan — at 7.76%.
Note that Japan has moved into second place after being well behind China in November 2016. While the US has gained more than 3 percentage points of global market cap share since Trump was elected, China has lost a significant amount — falling from 10.21% down to 7.54%. At least based on this measure, Trump’s trade fight with China has benefited the US at the expense of China.
Hong Kong remarkably makes up 6.75% of world stock market cap, which is well ahead of the UK (4.41%), France (3.14%), Germany (2.83%), and Canada (2.74%).
Since the 9/20 peak for the S&P 500, the US has lost 0.49 percentage points of share, while China, Hong Kong, and Brazil have seen the biggest gains, so things have tightened a little bit between the US and China during the recent sell-off here in the US.
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/country-stock-markets-as-a-percent-of-world/

@MikeM. He certainly seems to have lost his touch, but I think he's enjoyed periods of great success not necessarily linked to BRK.
FAIRX got me through the 2000's. Invested heavy and fairly early with BAC on his strong recommendation. But I also invested heavy in FAAFX, which I believe was mismanaged never really delivered ... not yet anyway.
I was a fan. And I had some good company.
Here's a great article from Fortune 2010 ...
Bruce Berkowitz: The megamind of Miami
But he clearly misunderstood what his early investors were attracted too ... excess performance with lower volatility. Super concentrated in banks early and the fund has been extremely volatile ever since.
Yes @Shostakovich, overtime the Fairholme shop seemed mismanaged, with lots of personnel changes. (Fernandez I think ... "my Charlie Munger," BB called him.) And there were others.
Closed and re-opened several times. BB became active in take-overs, like St Joe.
Clearly seduced by EL and the entire Sears thesis.
Perhaps skills and experiences of money managers are better suited for some market periods than others and the flashes of insight one may have in one decade may not carry into next?
“For over a thousand years Roman conquerors returning from the wars enjoyed the honor of triumph, a tumultuous parade. In the procession came trumpeteers, musicians and strange animals from conquered territories, together with carts laden with treasure and captured armaments. The conquerors rode in a triumphal chariot, the dazed prisoners walking in chains before him. Sometimes his children robed in white stood with him in the chariot or rode the trace horses. A slave stood behind the conqueror holding a golden crown and whispering in his ear a warning: that all glory is fleeting.”
― George Patton

@ 09:51 PST- Fine here also.