Vanguards biggest active bond fund manager suddenly resigned on April 13.
He had managed or co-managed 7 active bond funds, totaling 135 billion dollars.
He was sole manager of the Vanguard Short Term Investment Grade Fund VFSUX the forth largest actively managed bond fund in the U.S.
Whats strange is it has been over 2 weeks and not a word on this on the Vanguard web site.
Was he forced to resign or be fired, or what. Vanguard is definitely trying to keep this very quiet.
Samuel Martinez and Daniel Shaykevich have taken his place as co-managers of the Short Term Investment Grade Fund.

@Mark - Can we assume then that you went into October 2007 nearly fully invested in equities? Must have been some ride. S&P was off 56.4% over 17 months. Global markets worse.
If you’ve got the stomach to stay the course that’s fine. That type of commitment isn’t for everyone - especelly someone near 75 with a 10-year life expectancy.
October 2007 to March 2009
S&P 500 high: 1565.15, Oct. 9, 2007
Low: 682.55, March 5, 2009
S&P 500 loss: 56.4 percent
Duration: 17 months
@Ted - Thanks for clearing up my question on gold. Wonder if it would be too much trouble on those hyped up sector promotions to insert a word of caution that you do not agree with the hype? And, I’ll assume your prophesitorical skills pertain mostly to equity valuations and do not extend to other matters like alien life? :)

I'll ask Charles to weigh in, since he actually knows the thinking that went into the thresholds. As a general matter, I suspect that answer has two parts: (1) sometimes it's good to have the big picture - which MFO Risk gives by reminding you that even the tamest equity fund is one of your most aggressive options, and (2) sometimes it's good to have fine grained data - which pretty much all of the rest of the metrics provide by allowing you to pick the variant of risk-return balance you favor, then picking the historic period that seems relevant, then looking at a fund against its own peers or - if you choose, as I did with Prospector, to add a second peer group - against its direct peers and plausible competitors.
For Prospector, I looked at mid-cap core then mid-cap core and multi-cap core. You might similarly decide that the sort of fund that interests you might be categorized as flexible portfolio or world allocation (they're close), so you decide to stack both sets up.
David

Hi, Ben.
It's the nature of that particular metric that pretty much all stock funds have a risk of four or five. Here's why. Charles starts by defining the S&P 500 as "the market." The question is whether you're substantially more or less volatile than that.
From the definitions page: Funds with volatility between 75 and 125% of market are assigned MFO Risk of 4 and deemed "Aggressive."
So, by definition, the S&P 500 is a 4. Funds with as little as 75% of its volatility are also 4 as are funds with as much as 125% of its volatility.
If you look at the entire Fidelity line-up, nearly 450 funds, only one equity fund has an MFO risk below 4 and even many multi-asset class funds earn 4 or 5 on risk.
The idea is to allow you to see where your fund lies within the entire universe of possibilities, not just where it lies within a narrow peer set. Happily, the "narrow peer set" data is available in the screener. It's just not the MFO Risk metric.
Hope that helps,
David

The S&P 500 will close out the year above 3,000.

@Ted - Hell, it might close the year at 5,000. Who knows? Unlike you, I don’t pretend to be able to predict the future. I think what some of us are talking about here is our own comfort levels and needs. Anyone who was 100% invested in March, 2009 is in a pretty sweet spot right now.
While you’re making predictions,
- Who will win the 2018 World Series?
- Will gold first hit $1200 or $1400? (The exact date this will occur would also be apprecisted.)
- On what date will NASA confirm the existence of life beyond Earth?
BTW: You posted a Barrons article last week that predicted a “rosy” future for gold. I haven’t heard back from you on that one. Specifically the extent to which you agree / disagree with Barron’s and what amount of gold, if any, you hold? - https://www.mutualfundobserver.com/discuss/discussion/40620/commodities-now-all-roads-lead-to-gold
Thanks

@MFO Members: The Linkster's cash holding is 1.19%. The S&P 500 will close out the year above 3,000.
Regards,
Ted

Having cash allows for small buying this year - early Feb (9% down), March and April (5-6% down). Several funds I use have over 10% cash position. Only until recently, TRP Capital Appreciation reduced the cash to high single digit.
With treasury yielding near 3%, bond funds are struggling this year. Two or more rate hikes this year pose considerable headwind for bond funds. Actively managed funds are doing better than the bond index.

Our house is now at about 50% cash, being money markets at Fidelity

I thought I was being conservative with 20% cash and 20% bond.

All depends on your overall approach - especially what the “other” money is invested in. And let’s assume this discussion pertains only to folks in the “distribution” stage (rather than the “accumulation” stage).
I use “nominal” cash level (including short-term bonds) to gage relative risk exposure at any given time That doesn’t include the additional cash held indirectly thru balanced/allocation funds. 15% would be normal. 20% is high end. Prior to the mid-March meltdown I was at 22%. Did a little buying after that and now just above 20%.
For those who deride cash, I offer this 30-second video clip from a beloved investor of the past. His closing words extol the “beauty” of cash. :)

A short read regarding country(s) funding/monetary support.
https://qz.com/1264673/ai-is-the-new-space-race-heres-what-the-biggest-countries-are-doing/

FYI: Welcome to the “Wait! Is it already May???” edition of the Mutual Fund Observer.
Regards,
Ted
https://www.mutualfundobserver.com/2018/05/may-1-2018/

@catch22, I thought I was being conservative with 20% cash and 20% bond.

Our house is now at about 50% cash, being money markets at Fidelity at about 1.3% yield/blockquote>
No major move sofar but just watching.

I wonder if SFGIX is still worth recommending? Downside capture is a good attribute. But I don't plan to grow my stake. I know Foster is an expert and knows his shit. Yet SFGIX seems to want to not lose, rather than to win. Just my opinion. I've owned it since 2012. I'm also beginning --- at the next (June) distribution, to start receiving, rather than re-investing profits.

I bailed on it a few months ago as it wasn't living up to my expectations for EM exposure. Upon further review, I see it has struggled YTD and over the past 3 years. I think there are better options.

I wonder if SFGIX is still worth recommending? Downside capture is a good attribute. But I don't plan to grow my stake. I know Foster is an expert and knows his shit. Yet SFGIX seems to want to not lose, rather than to win. Just my opinion. I've owned it since 2012. I'm also beginning --- at the next (June) distribution, to start receiving, rather than re-investing profits.

Hi @Junkster et al
You noted: " There is a whole generation of younger investors who are conditioned to buy the dip who never had to experience a 2008 type meltdown. They all say they will stay the course and continue buying, but let’s see."
Nothing more than investment theory with this I suppose.
--- The economy is having 10,000 baby boomers a day turn age 65.
--- Obviously, not all of them are invested in the markets, and will not have any impact
--- but many of these folks who have investments also have started to or near required to draw from IRA's and related.
Couple of questions with this:
1. If boomers with investments are watching their accounts, will they take cover when another correction takes place; as they will no longer be adding to their accounts (retired), nor have time for a recovery period.
2. It is not possible that the money amounts boomers will be pulling from investments be a larger total than "new" money going into markets from the "younger" ones?
Catch

@Junkster when you say " Also don’t see much investor fear or anxiety over the past three months.", is that based on bulls versus bears stats, some other methodology or just gut instinct.?

Some weird methodology not even worth mentioning. And certainly nothing I would base any asset allocation on. Whenever a real bear does come, and something more ominous than the late
2015/early 2016 correction, about all I can say with certainty is there won’t be much fear or anxiety. There is a whole generation of younger investors who are conditioned to buy the dip who never had to experience a 2008 type meltdown. They all say they will stay the course and continue buying, but let’s see.

FYI:
Regards,
Ted
https://www.cnbc.com/video/2018/05/01/cashin-good-earnings-but-market-hasnt-reacted-positively.html?play=1

Hi @Junkster
The below M* link is averages for categories they post, as of April 30 close.
Our house is now at about 50% cash, being money markets at Fidelity at about 1.3% yield.
Not much, but better than going backwards.
Our last big money move will have a 10 anniversary on June 17, when we moved to about 87% cash. Sadly, might have to do this again.
Our two largest equity areas at this time are tech. and healthcare. But, these two continue to get beat upon, too.
Today, May 1 is a flop so far for our holdings in general.......11 am, EST.
Can't bitch about 10 years of nice returns; but I don't want to have to go hide the money, either.
http://news.morningstar.com/fund-category-returns/
Take care of yourself,
Catch

A cursory glance at Morninstar’s 8 mutual fund categories. - U.S. Equity, International, Alternative, Allocation, Sector Equity, Taxable Bond, Municipal Bond and Commodities shows 103 sub categories. Over the past three months ending 4/30 I could find only eight positive - Bear Market, Energy, Bank Loan, Utilities, HYMunis, Muni Single State, ultrashort Bond, and Commodities Broad Basket. The above are sub category *averages* and yes I realize there were many exceptions to the average. Not making any point here but the obvious. Also don’t see much investor fear or anxiety over the past three months. Whether that is meaningful or not as a contrarian indicator only time will tell.

Not "special", but a few other "not so special" mutual fund descriptor's:

A few other names and descriptive terms the fund companies use to try to get your attention:
Enhanced
Unconstrained
Ultra
Moderate
Aggressive
Core
Opportunities
Efficient
Thematic
Prudent
Inverse
Tactical

source:whats-in-a-mutual-funds-name?

You forgot the most common BS term of all - Strategic!
Apparently the "Tactical" guy is losing you money thinking about tomorrow, while the "Strategic" guy is gathering assets based on short term performance.

Two family members, one perhaps higher-maintenance (older) and one perhaps more impatient with inefficiency and meh service (younger), are each pretty dissatisfied Vanguard customers. The older is a large-accountholder in index funds and the younger a workplace-401k participant.

Just tell me the same folks are not happy with TDA. Because if they are, that would really not make my day/week/month/year/life.