I have a couple of related questions. Wisdom Tree's hedged ETFs for both Europe and Japan, HEDJ and DXJ, respectively, are focused on dividend paying companies, so a value tilt I guess, but also on companies that derive more than 50% of revenue outside of Europe and at least 20% of revenue outside of japan. Both ETFs weight their holdings based on dividends rather than market cap.
First question is whether you'd be concerned that you're not getting a real European investment if the companies have to be big enough to derive more than half their revenue elsewhere. I guess the good side is that if you're betting on the ECB then exporters will get the benefit of a weaker EUR.
The approach Wisdom Tree takes also favors big companies, but if you use the US as a proxy for QE then you'll find the Russell 2000 has done better than the S&P 500 from the start of 2009 until the end of 2013. Clearly small-caps have not kept up this year, but the better performance has come from the smaller companies. I'm not sure the difference is significant enough for the effort it would require to hedge small-cap investments in Europe or Japan, but wondered what others thought about small-cap vs. large-cap in the context of QE for Europe and/or Japan.
There are also hedged ETFs that are market cap based as an alternative to dividend weighting, but I guess that is a separate discussion based on what you believe about the sectors that tend to pay more dividends.

FYI: Coffee soars 58% in 2014; oil, Russia left behind.
Regards,
Ted
Best and worst performing 2014 investments

Hi Mark,
FEU is invested in the largest of large companies in Greater Europe(split about a third to the UK and the rest to Europe). I was indeed surprised with it's dividend, Wow! And, it is currently selling towards its 52 week low. For me, I'd position cost average into the position. First, I'd determine how much I currently have in equities along with how much I already have invested in Greater Europe. Currently, within my own portfolio I am weighted a little better than the 20% range in Greater Europe ... and, if I wanted to raise this exposure to say about 25% then I'd ease into FEU until I reached my desired allocation. In this way, if some of my global equity and global allocation fund managers also move towards Europe then I could possible wind up with more than I first wanted if you load with a one time bulk purchase. After all, what are you going to do if it is a while before Europe starts to move or even continues to decline? So again, I'd average in. Indeed, you are catching a good dividend while you build the spiff out and while held.
Old_Skeet

How would you play this if you felt his thesis had any merit? I'm thinking FEU where at least I can gather a dividend of 5.6% while I wait.

David makes an excellent point about doing Roth conversions. So long as one does not jump into the next tax bracket (or enter AMT territory) this is a good way to "add" money to IRAs - thus moving money from taxable accounts to tax-free accounts.
The rest of this is detail, but an attempt to explain that last comment:
Say you have $100 in a traditional IRA. It is worth $75 post tax (25% bracket).
Say you have $25 in a taxable account.
Your total after tax worth is $100.
Pay the tax on the IRA now (convert it to a Roth).
You now have $100 in a Roth, worth $100.
Your total after tax worth is $100.
The difference is that all earnings on top of that $100 after-tax value are tax free. And you have the flexibility to make changes in your investments with no tax consequences (unlike the situation if that $25 were in a taxable account).

FYI: Get an inside look into what some of the best investment themes may be for the new year.
Regards,
Ted
https://www.fidelity.com/viewpoints/investing-ideas/investing-ideas-for-2015

In approving the renewal of the adviser's contract last month, the board of trustees noted that while the fund lagged just about everyone for the past 1, 3, 5, and 10 year periods, 75% of the money in the fund was the manager's so he had all the incentive in the world to manage it to the best of his ability. (sigh)
David

BIRMX lost 21.54% for the 2014 (as of 12/30/14) based on the transfer agents' records on their web site:
http://www.mutualss.com/currentprices.aspx
Also, the fund has been closed for years to new investors. So if the fund is closed to new investors, where is the new money suppose to come from to grow its asset base?

I am one of those that also likes red and green (if you live in New Mexico it is a must. Has to do with chile.) I have a wide range of holdings that include utilities, reits, health care and biotech, plus the usual suspects of dividend growth and large value, etc. etc. If I had not been diversified this year, would have missed out on the 25% gain in utilities and reits which I normally do not expect to excel in good years. Of course, I am in the red on intl and emerging market, but you never know when they will take off, thats why I leave them alone.
Good conversations, thanks

"John, you're not putting new money into the fund with a reinvestment of a cg distribution. You have exactly the same investment you had before, except that you've picked up early tax liability for some of the fund's gains. "
Agree, but I am talking about after the fact. Money wise, it's a wash but you end up with more shares. As time goes on those added shares help to grow the investment. Granted, you need to hold the fund or investment for a period of time.
A mythical example; Say If you bought 100 shares of a fund and never bought another share, and that fund declares distributions regularly. After 10-15 or so years you end up with 120 shares. While you did not make money on those distributions, those extra 20 shares are working for you, hopefully in your favor.

I worked for 50 years, I guess "interesting' is one way you could describe it!

IMHO, market neutral funds may or may not work in bear markets. Emphases on may not. And they surely do not in any other market. Hence, no need for any fund called market neutral. They all sport different magic and any of the processes used in these funds only work under specific conditions. Any other condition deems them useless. A marketing scheme for the tepid investor. If you don't believe they are a marketing scheme, count the number of these funds today versus 5 or 6 years ago.

No bashin Cashin today. Gotta show some respect. :)
Hope he had a swell 50th!

"The Board of Trustees of the Birmiwal Investment Trust......has concluded that due to the relatively small size of the Fund, it is in the best interests of the fund and its shareholders that the Fund cease operations."
The fact that BIRMX has lost 55% of its value while the S&P 500 index has doubled over the past five years couldn't have something to do with it, could it ??
Just asking.

http://www.sec.gov/Archives/edgar/data/1527446/000116204414001548/hagin497201412.htm
497 1 hagin497201412.htm
HAGIN KEYSTONE MARKET NEUTRAL FUND A series of Cottonwood Mutual Funds Supplement dated December 30, 2014 to the Prospectus and Statement of Additional Informationeach dated June 30, 2014 (as supplemented from time to time)
The below information was provided to shareholders of the HAGIN Keystone Market Neutral Fund (the “Fund”) on or about December 16, 2014. Effective December 30, 2014, the closing date of the liquidation of the Fund is changed to January 15, 2015. All references in the below information to December 30, 2014 are hereby replaced with January 15, 2015.
* * * * * * * *
The Board of Trustees (the “Board”) of Cottonwood Mutual Funds (the “Trust”) has approved a Plan of Liquidation (the “Plan”) relating to the HAGIN Keystone Market Neutral Fund (the “Fund”), effective December 16, 2014. HAGIN Investment Management, the Fund’s investment adviser (the “Adviser”), has recommended to the Board to approve the Plan based on its representations of its inability to market the Fund and the Adviser’s indication that it does not desire to continue to support the Fund. As a result, the Board has concluded that it is in the best interest of the Fund’s shareholders to liquidate the Fund.
In connection with the proposed liquidation and dissolution of the Fund called for by the Plan, the Board has directed the Trust’s principal underwriter to cease offering shares of the Fund immediately as of the date of this Supplement. Shareholders may continue to reinvest dividends and distributions in the Fund or redeem their shares until the liquidation.
It is anticipated that the Fund will liquidate on or about December 30, 2014. Any remaining shareholders on the date of liquidation will receive a distribution of their remaining investment value in full liquidation of the Fund. If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1.877.257.4240.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of any redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement, and the existing Prospectus dated June 30, 2014, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated June 30, 2014 have been filed with the Securities and Exchange Commission, are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1.877.257.4240.

http://www.sec.gov/Archives/edgar/data/1215881/000141304214000349/birmiwalcls497.htm
497 1 birmiwalcls497.htm
Birmiwal Oasis Fund
(BIRMX)
Supplement dated December 30, 2014 to the Prospectus dated August 1, 2014
____________________________________________________________________________
The Board of Trustees of the Birmiwal Investment Trust, on behalf of the sole series of the Trust, the Birmiwal Oasis Fund (the "Fund"), has concluded that due to the relatively small size of the Fund, it is in the best interests of the Fund and its shareholders that the Fund cease operations. The Board has determined to close the Fund and redeem all remaining outstanding shares on January 30, 2015.
Effective December 30, 2014, the Fund will no longer pursue its stated investment objective. The Fund will begin liquidating its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Any required distributions of income and capital gains will be distributed as soon as practicable to shareholders and reinvested in additional shares, unless you have previously requested payment in cash. Shares of the Fund are otherwise not available for purchase.
Prior to January 30, 2015, you may redeem your shares, including any reinvested distributions, in accordance with the "Instructions For Selling Fund Shares" section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, any redemption is subject to tax on any taxable gains. Please refer to the "Taxes" section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO JANUARY 30, 2015, WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE, AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1-800-417-5525 or the Fund’s adviser, Birmiwal Asset Management, Inc., at 1-206-542-7652.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of any redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement, and the existing Prospectus dated August 1, 2014, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated August 1, 2014, have been filed with the Securities and Exchange Commission, and are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1-800-417-5525.

Once or twice a year, I try to find something comparable to FLPSX and fail (at least according to the metrics that matter to me, such as cost, portfolio, etc).
The portfolio is value-leaning, non-large cap, low turnover (12%), 1/3 foreign. IMHO, it's that last factor that explains the relative underperformance the past few years. It's a global stock in all but M* classification. Which is not a bad thing if that's what you want. For that sort of fund, it's doing quite well.
I think I finally did find a possible alternative. Polaris Global Value (PGVFX). But here's the thing - it is classified a global stock, and is somewhat more heavily foreign weighted (60/40 foreign/domestic).
Having more foreign stocks, it doesn't match FLPSX in performance - but it does tend crudely track the same performance curve, and it helps if one wants/needs a bit more foreign exposure. (Since domestic stocks have been outperforming foreign ones, a person's portfolio could easily have tilted "too much" toward domestic.)
It's more tax efficient (both relative to FLPSX, though this may be because it is still sitting on losses from 2008-2009 (per website). On an absolute basis), it falls into the same mid cap value box (though with slightly higher average market cap). Same low turnover (14%).
This has been a fund on my radar for years, but I always considered it too expensive (and in the past have been disinclined to buy global funds). But it has temporarily lowered its ER (it remains to be seen whether the temporary reduction will be renewed).
Finally, unlike FLPSX, one can benefit here from a foreign tax credit. The rule is that if a fund's portfolio is more than 50% foreign, then the fund is allowed to pass the foreign taxes through to you. FLPSX, at 1/3 foreign, can't do that. (Funds are not required to pass through the taxes, but they usually do.)
Just an offbeat thought on a replacement or complement to FLPSX. I'd say it was thinking outside the box, but part of the appeal is that it falls within the same style box.

+1 to msf. I would leave well enough alone, suck it up in April, and certainly not bail on Danoff and Tillinghast based on the last few years, nor even necessarily switch from Fido to Vang (though the CG points are noted). But your position is popular among some, even in the 15% bracket, and I recognize that this might sound argumentative.

Hi David - I appreciate your comments even though I may not agree with all of them. Let's take FLPSX, for example. Tillinghast is very well respected as we all know. However, he is slowly easing away from managing this fund and will not be there forever. If you compared FLPSX with a Vanguard Mid Cap Index fund, say VIMAX, then Tillinghast's fund loses on tax adjusted returns over the 1, 3, 5 and 10 year time periods. Not bad for an index fund. FLPSX loses to VMVAX as well although the latter is a newer fund. Both index funds are more tax efficient as well. UMBMX doesn't come close to either index fund in terms of tax-adjusted returns.
I am in the 25% tax bracket, BTW.

+1 to msf. I would leave well enough alone, suck it up in April, and certainly not bail on Danoff and Tillinghast based on the last few years, nor even necessarily switch from Fido to Vang (though the CG points are noted). But your position is popular among some, even in the 15% bracket, and I recognize that this might sound argumentative.

Thanks for the reply, MSF. Some of the funds I've mentioned have had a record of paying out big distributions, such as FLPSX and UMBMX. Neither one of those funds have performed well over the past three years, either. FCNTX was particularly bad this year as well with a huge distribution. My point is that I would rather settle for slightly lower returns and not get hit with big distributions rather than the other way around. That's just my preference. With the size of my portfolio, I don't need to hit home runs with funds - singles or doubles will suffice. What I don't like is cutting a larger tax check than necessary every April 15.
Your points are well taken and I will certainly take a look at some of those Vanguard ETFs and indexes.