Current MFO Great Owls...

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And, on a lot less volatility...both above 50-day and 200-day averages...both near all-time highs.
Here's summary for AGG:

And, for SPY:

"Does anyone out there own FPNIX?"
Yes. Not a lot, but I'm considering increasing my position. It's a very unique income fund in that I don't believe it has ever lost money in a calendar year while managed by FPA, which IIRC is 30 years. Their first goal is not to lose money. A lot of funds say that, but FPNIX puts it into practice. Performance has often suffered due to this risk aversion, but not losing is more important to them than gaining. I like Tom Atteberry.
They are very concerned that interest rates are historically low and are going to rise, and they have positioned themselves according to that thesis. The duration is only 1.51 years, and the yield is very high for the amount of duration risk taken: 3.5%.
On their website, fpafunds.com/
they have a major presentation given by Tom Atteberry showing FPA's fixed income thesis:
October 17, 2013
Presentation to CFA Institute: Fixed Income Portfolios in the New Frontier
By Thomas H. Atteberry
It's very educational and shows their strong opinions on interest rates.
Another item on their website:
December 23, 2013
Morningstar describes FPA New Income as "An intriguing choice for interest-rate bears."
FPA has their Investor Day coming next month, so there should be a lot of information coming from that. And FPNIX just had their First Quarter 2014 webcast about a week ago, available for viewing/listening online. About 58 minutes.

If the brokerage option is part of the 401k plan; one would suspect you would be allowed to invest in whichever funds, stocks and etfs that are not part of Fidelity, but with which Fidelity has an agreement. Whether reduced minimums would be available for these outside funds is another question. Group plans, as with the 401k; likely have very low minimums ($500); but restrictions still usually apply. These restrictions vary by fund family but may include holding period times; or resticting investing in a same fund if one sold an entire position (not allowed to move monies into that fund until a waiting period is finished (60 days or ???)
Hopefully, your company will offer a nice plan. Many such plans are junky.
Regards,
Catch

By the way, the VIIIX mentioned above normally has a minimum of $200 million to get in! In the 401k plan, there is no minimum at all. VBTIX normally has a minimum of $5 million to get in: no minimum at all in the 401k plan. So I think your company has a big opportunity here to create the ultimate investment vehicle of their choosing. Go for it!

I think the possibilities are almost without limit. Your company can probably work out whatever they want in there. There are tons of possibilities that are not possible in a regular Fidelity IRA.
For example, I have a company 401k with Fidelity and it contains the PIMCO Total Return Institutional Share Class PTTRX, 0.46% expense ratio, which normally has a $1 Million minimum, but in the 401k plan there is no minimum at all. It also has Vanguard Institutional Index Plus, VIIIX, an S&P 500 Index fund that charges only 0.02% expense ratio (2 basis points!), there is a private Stable Value investment as a choice, there are two DFA mutual funds, and DFA funds are normally not available to anyone who doesn't go through a Registered Investment Advisor, there is VBTIX, the Vanguard Total Bond Market Institutional class, with only a .07% expense ratio, etc........
So yes, your corporate 401k plan with Fidelity has a lot of flexibility to put funds into your 401k plan from many different fund companies, institutional shares, etc.....And mine also has a Brokerage Link option, where you can purchase anything available to anyone with a Fidelity Brokerage account.
I would lobby to get a Stable Value fund, which is a fixed income fund that uses Guaranteed Investment Contracts to produce an investment with a $1.00 NAV that always stays at $1.00/share, but has a decent yield. It's a super conservative, almost no risk fixed income investment that yields a lot more than the traditional counterparts such as CDs, MMAs, etc., and not available outside a 401k, so it is very unique. Standish BNY Mellon is a company that has these investments ready made, a very high quality company that I would recommend.
Regarding SGIIX, that's probably something your company would have to negotiate with Fidelity to see if they can get it in there. My guess is that the chances are good with respect to getting a bunch of institutional share classes in there, especially if your company has a decent size. The size of your company and the number of 401k participants may be a factor here. I would also lobby to get some DFA funds in there. Certainly you want some Target Date Retirement funds in there. I think the Brokerage Link is great, because you can purchase any stock/bond/mutual fund/ETF, so no one in the 401k plan will feel left out.

FYI:
Regards,
Ted
http://blogs.wsj.com/moneybeat/2014/05/02/jeremy-grantham-on-bubbles-i-am-sure-it-will-end-badly/tab/print/

FYI:
Regards,
Ted
http://blogs.marketwatch.com/thetell/2014/05/02/investor-money-leaves-crowded-bank-loan-funds-after-95-weeks-of-inflows/tab/print/
M* Bank Loan Fund Returns: http://news.morningstar.com/fund-category-returns/bank-loan/$FOCA$BL.aspx

Putting that 16% in all caps doesn't make it more meaningful. This is the same type of silly argument made with marginal tax rates. It isn't worth getting a million more because you will pay almost half of it in taxes. I don't know any millionaires who thought that way. But saying 50% tax rate makes the point look incredible when arguing ideologically about taxes. Seeing the post here, it seems to work too.
The real argument is that the expense is not tied to a gain over the benchmark. If it was, it would be a no-brainer. You will pay that expense even if you lose money, you will lose more money because of the higher expense. The marginal rate for some hypothetical gain is irrelevant and meaningless. You can make it 50% by making the manager over perform by just 1.6%.
Ellis is being generous by arbitrarily picking just 16% but also using a sensationalist type of argument even if the point being made about mutual fund costs is valid.

The case is in hindsight only. If someone had suggested buying long dated bonds at the beginning of the year, they would have been put in a padded cell.
Even the Moose call switched to EDV after a rise of 12% or so this year close to its 52 week high. Is there a case now? The case for holding it is the same as it was at the beginning of the year and so is the case for not holding it. Only one of them will be right going forward.

This math (cost differentials) reminds me of a retirement decision I grappled with a few years ago:
"When should I take my retirement pension".
My employer provided me with a retirement pension calculation chart to consider (an annuity chart of sorts) . Calculations started at 25 years of service and maxed out at 37.5 years of service. To simplify the math of this annuity chart, a 59.5 years old worker with 30 years of service could retire with a pension roughly equal to 60% of their salary. An employee could also continuing working (earning a full salary) for 7.5 more years at which time that employee would qualify for a pension roughly equal to 70% of their salary.
What I tried to get across to my follow workers who wanted to continue working towards qualifying for a 70% annuity rate was the fact that they were working for the differential (salary minus a pension @ 60% of last year's salary) or basically 40%.
Of course this worker would earn 40% more money while continuing to work and eventually qualify for a higher pension payment (70%), but from my standpoint these 7.5 years are the "last best" 7.5 years of our lives.
Aside from the enjoyment of work (not really), I was not willing to spend 100% of my time over the next 7.5 years earning a 40% pay differential (salary - pension). Much of this 40% differential disappears from net (take home) income anyway (in the form of pension contributions, union dues, Medicare / SS deduction, state and local tax deductions, and work related expenses).
Cost differential can be steeper than we might image.

@jaba: I agree with you, this fund is one and a half drumsticks away from being a turkey. Here are the returns from the funds website.
Regards,
Ted
Martin Focused Value Fund (MFVRX) 3-Mo. -0.20% 6Mo. .50% 1-Year 2.22% Since Inception .82%
S&P 500 Index 3Mo. 1.81% 6Mo. 12.51% 1Yeae 21.86% Since Inception 21.16%
+ 1.39% expense ratio

How many people do you think would've put up with -15% ANNUALIZED underperfomance between 2003-2007?
I'd attach the annual report so you can see for yourself but I don't see that there's any way to do that here.

Another way to put it is that you know what it costs to get the S&P/Total Market performance.
You are paying Mick the Bookie for any outperformance beyond that, IF he or she achieves it. In this case 80bps of 500bps is 16%.
Of course, if Mick the Bookie achieves outperformance, you also have more money to compound.

Apparently, it would be those who wish to outperform the SP500 by being better at playing defense than offense ('better relative performance 2000-2002, 2008). There's more than one way to skin a cat.

Per their 2013 annual letter, Martin Capital Management has returned 5.3% annualized net of fees from 2000-2013 vs 3.6% for the S&P 500.
From 2003-2013, they lagged the S&P in every single calendar year, except 2008.
To quote from the commentary: "There are some investors for whom this strategy is a very good fit"
My question is who are these "some investors"?

Hi Guys,
The little trick to easily reproduce the Ellis calculation is to perform the analysis using dollars and not percentages.
Any dollar amount will do. Let’s assume a 1000 dollar investment.
The active investor was rewarded with a 410 dollar payday; the passive investor’s return was 360 dollars.
The active investor’s cost was 8.50 dollars; the passive investor’s cost was 0.50 dollars.
The excess incremental reward for the active investor over the passive investor was 50 dollars (410-360). The incremental cost for that reward was 8 dollars (8.50-0.50). The incremental cost for the incremental excess return therefore is 8/50 or 16%.
Extra performance is usually a costly matter. A ballplayer who hits at a .320 level draws a much more formidable salary than a .250 hitter. That’s only true if those averages hold water over time. Persistency matters much.
I too admire Charlie Ellis. He is a smart commonsense guy. But in this instance, I believe he is emphasizing the wrong side of the argument. If I could identify a fund manager who generated a lifetime excess return record in the 5% range I would be ecstatic and would gladly pay him 16% of that excess returns. These superinvestors are rare and hard to identify before the fact.
I hope this helps.
Best Regards.

David et al. how is this number added up? I am only good at math when I have a formula.
I love this...it's actually more disturbing and relevant than Flashboys/HFT. Great issue!!
"Assume an S&P 500 Index Fund achieves in a year a total return of 36% and charges investment management fees of 5 basis points (0.05%). Assume your other investment is Mick the Bookie’s Select Investment Fund which had a total return of 41% over the same period and charges 85 basis points (0.85%). Your incremental return is 500 basis points (5%) for which you paid an extra 80 basis points (0.80%). Ellis would argue, and I believe correctly so, that your incremental fee for achieving that excess return was SIXTEEN PER CENT."
Mike

MarkM: Thanks. What is Jim Stack's performance record? I know the Hulbert Financial Digest tracks him closely, but I don't subscribe to that. What was Jim Stack's performance during bear markets, such as March 15, 2000-October 2002, or October 2007-March 9, 2009, and during bull markets, such as the past 5 years, and 1991-March 2000?
Are you in Meb Faber's ETF's? I just read his book, Global Value.

FYI: Copy & Paste 5/1/14: Tommy Stabbington & Chiara Albanese WSJ
Regards,
Ted
Franklin Templeton Investments fund manager Michael Hasenstab has raised the stakes in his wager on Ukrainian bonds, but investors in some of his funds have folded their cards.
Investors are pulling cash from a Templeton fund with a relatively high concentration in Ukraine bonds and from his flagship Global Bond Fund, which also has invested in the Eastern European country's debt.
Mr. Hasenstab is known for his bold, contrarian bets on out-of-favor government bonds. He snapped up Irish bonds during the dark days of the euro-zone crisis and rode them to sterling returns. A few years ago, he similarly took a gamble on Hungary that paid off.
Michael Hasenstab said about Ukraine that he is 'encouraged by the long-term potential.' Patrick McMullan
Ukraine is proving to be a rougher ride. Its bonds have swung wildly during the political crisis over Crimea and the eastern part of Ukraine and are now broadly weaker for the year. Templeton has bought about $7 billion of Ukrainian debt, according to data provider Ipreo, about one-quarter of the country's international bonds. Mr. Hasenstab added to his holdings in the second half of last year and early this year, according to company filings.
The Emerging Market Bond Fund, which has $6.2 billion in assets, had 10.6% of its portfolio in Ukrainian bonds as of the end of March. It has seen outflows of $1.26 billion in the first three months of the year, according to data provider Morningstar. Mr. Hasenstab added to these holdings in March as the political crisis intensified, according to company filings. The Emerging Market Bond Fund has the highest Ukraine exposure among Franklin Templeton's funds
A version of the Global Bond Fund marketed to European investors, with assets of $39 billion and a 3% allocation to Ukraine, has seen outflows of $4.93 billion, according to the company. Outflows in the $71 billion U.S. version of the Global Bond Fund, with a 4.5% allocation, have been $570 million, according to Morningstar. Overall, U.S. and European funds investing in emerging-market debt saw outflows of just under 4%, the Morningstar data show.
In the first quarter, the Emerging Market Bond Fund lost 0.4%, while the Global Bond Fund gained 0.7%, according to Franklin Templeton.
One investor, who pulled cash out of the Emerging Market Bond Fund this year, said: "When you buy Franklin Templeton you know what you get in terms of high volatility. We reduced exposure to the firm earlier in the year to cut volatility in our portfolio."
Two investors in the Emerging Market Bond Fund said individual investors, who tend to be more skittish than institutional clients, were behind a large part of the outflows.
A Franklin Templeton spokeswoman said the fund is a "very niche strategy out [of] the range of global bond strategies managed by Michael Hasenstab, which accounts for $185 billion under management." She declined to comment further.
On a conference call with analysts Wednesday, Franklin Templeton Chief Executive Greg Johnson said much of the outflow from European funds can be attributed to investors allocating more of their money to stock and hybrid funds instead of bonds as Europe recovers from recession.
Mr. Hasenstab couldn't be reached to comment, and the spokeswoman declined to make him available.
Franklin Templeton has been reassuring investors over its holdings of Ukraine's bonds as the crisis escalates, according to a person familiar with the firm's business.
On Thursday, Russian President Vladimir Putin called on Ukraine to withdraw military forces from the southeast of the country, a move that would effectively cede control to the pro-Russian forces that have taken over about a dozen cities in the border area and are pushing for a referendum on its status.
Ukrainian government debt has endured a bumpy ride this year. A dollar-denominated bond maturing in 2023 yielded 9.14% at the end of 2013, according to Tradeweb. The yield climbed to as high as 11.5% in February, before falling back below 9%. As the crisis rumbles on, Ukraine bonds have fallen out of favor once more, and the yield on Thursday stood at 10.5%. Bond yields rise as prices fall. In comparison, a 10-year German bond yielded 1.47% on Thursday, according to Tradeweb.
Mr. Hasenstab himself has been on a charm offensive. Last month, he visited Kiev. In a video filmed in the Ukrainian capital and posted on the firm's website, Mr. Hasenstab strolled the streets and sung Ukraine's praises.
"We are very encouraged by the long-term potential," he said in the video. "It's a country that despite some of the short-term fiscal issues has very little indebtedness, close to 40% debt to [gross domestic product], which is a very manageable amount."
Some investors said they have some concerns the Ukraine bet could turn sour but are willing to keep the faith with Mr. Hasenstab given his excellent track record. His Global Bond Fund has returned 52.5% over the past five years, according to Franklin Templeton. In comparison, the JPMorgan Global Government Bond Index has returned 21.5%, according to J.P. Morgan.
"I think Ukraine is more of a marketing issue for [Franklin Templeton] than an investment issue," said one investor who held on to substantial holdings in Mr. Hasenstab's funds during the first quarter of 2014.
"Hasenstab would probably rather manage the fund rather than go on a tour to calm people down. But I think the worst is behind them, and I wouldn't have a problem investing with them in the future because of this."
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