Kaspa,
FPACX, SGENX, and OAKBX are my top fund holdings and among my longest ones. Great choices. They have done great over the long haul and stick to their investment processes. Even after the gifted Jean Marie Evillard left SGENX, they continue to do well. If only these funds had less assets and could buy smaller caps in amounts which could move the performance needle more.
Kaspa
1:49PM Flag
L/S funds are interesting and I have considered many with interest. However, upon analysis, I always come to the conclusion that 'my' objectives are better met with good balanced/allocation funds. I own OAKBX, FPACX, SGENX for a long time know and have handled the dips very well since I held them. Started accumulating from around 2001 and continue to add to them all these years. My suggestion is to at least consider them vs. L/S funds and see if they satisfy 'your' objectives.

I wouldnt be so concerned with OAKIX's volatility if its a long term holding. What you should be more concerned about is the fact that the fund is concentrated among greater Europe. 78.8% of the fund is in Europe and only 10.4% in Asia. I don't have an opinion on Europe vs. the rest of the developed markets, but that is a significant bet compared to peers in the space.

I looked at alternatives ( L/S, Merger, futures, even market neutral) a year or so ago, because I thought stocks and bonds were overpriced even then and cash paid so little. I came to the same conclusion about L/S funds as David but BPLSX was closed (somehow SFHYX escaped my radar) so I started a position in it's global cousin BGLSX/BGRSX. It has done pretty well and seems to be positioned to avoid huge draw downs.
All of the other alternatives are reasonable, ie more cash, options etc, although the performance of FPACX has not inspired confidence in the last three years ( it lost more than the SP500) in Jan 2016, making me wonder what was involved.
One of the problems with mutual funds is you are investing in someone else's ideas about returns, safety and risk. Usually they are consistent, and reliable but not always. Of course the farther away from "bread and butter" diversification ( major asset classes, cash as ballast etc ) the more of a black box.
Certainly a portfolio with 30 to 50% cash will be significantly less volatile, but your returns will lower. There is a greater argument to made for cash with a 25 return now than a year ago
The key is 1) know what return you need and be sure you won't stick your neck out and get burned and 2) know exactly what you will do when a crunch comes and the market is down 20 % . If you can't stand the heat...

I have an account with Scottrade - I have confirmed that as part of the transfer to TDA the transaction fees for mutual funds will remain $17.

That's great!
TDA has lots of different fee schedules written up - the standard retail one (no maintenance fee, 180 day short term NTF fee), one HSA I had (briefly) with a maintenance fee, another HSA schedule with lower than standard fees, etc. I was concerned since TDA had not provided a separate price sheet for transitioned accounts, it pointed to a document with its standard fees, and it was coy about pricing.
The only actual number it put in writing was for equities, which at $6.95 it described as "low". These days, that's 40% higher than Schwab, Fidelity, or Ally (Trade King), and more than double Firstrade . $6.95 isn't a lot, but calling it low is PR.
I hope they'll also honor the Scottrade90 day period for short term NTF trading (instead of requiring you to hold funds for 180 days).

@David_Snowball

The only L/S fund that's been around for the full market cycle and has qualified as a Great Owl, is Hundredfold Select Alternatives (SFHYX).

David - I do not understand the holdings of SFHYX:
Top Holdings SFHYX
Holding, Weight %
Payb Lord Abbett Fl. - 34.10
Recv Lord Abbett Fl. 34.08
Recv Semper Mbs Total 31.13
Payb Semper Mbs Total - 31.04
Looks to be long and short the identical holdings? How can this be productive?
Thanks,
Penny

@guilhermes

Junkster
10:05AM
guilhermes said:
I have an account with Scottrade - I have confirmed that as part of the transfer to TDA the transaction fees for mutual funds will remain $17.
@Junkster Thanks for the feedback. Hopefully this is applicable to all Scottrade clients and not just those in their advisor program.

I brought over most of my assets to TD from Scottrade last March but still have a residual amount remaining at Scottrade. I only pay $17 for TF funds at TD to buy or sell, and I'm not in their advisor program.

L/S funds are interesting and I have considered many with interest. However, upon analysis, I always come to the conclusion that 'my' objectives are better met with good balanced/allocation funds. I own OAKBX, FPACX, SGENX for a long time know and have handled the dips very well since I held them. Started accumulating from around 2001 and continue to add to them all these years. My suggestion is to at least consider them vs. L/S funds and see if they satisfy 'your' objectives.

What about funds that are available at Scottrade, but not at TDA, like FPEIX? If I own it at time of transfer?
What about funds that are different classes at Scottrade and TDA?
Scottrade has PMZIX and TDA has PMZDX, increase of 0.40% in expenses. There are many of these funds with higher expenses at TDA.
At TDA, they withhold 1 day interest payment on mutual funds- they settle on T+1, but they don't start paying interest until T+2. I have never seen this before.

@DavidV: U.S. News & World Report ranks 19 natural resources mutual fund.
Regards,
Ted
https://money.usnews.com/funds/mutual-funds/rankings/natural-resources

I have an account with Scottrade - I have confirmed that as part of the transfer to TDA the transaction fees for mutual funds will remain $17.

Thanks for the feedback. Hopefully this is applicable to all Scottrade clients and not just those in their advisor program.

I have an account with Scottrade - I have confirmed that as part of the transfer to TDA the transaction fees for mutual funds will remain $17.

Well, there are always lots of peddlers of "whatever" to get-rich-now schemes; and unless Ray Dalio has been and is one of the greatest flim-flam folks of all time, I do pay attention to his writings and words. He surely doesn't need more money (estimated wealth at $16 billion). I do believe he is sincere with his thoughts about cash on the sidelines for the near future investments, as well as other social, political and investment thinking he passes along. Mr. Dalio also notes a possible negative equity market effect "if" interest rates jump to +1% from current levels.
Below is a link from Mr. Dalio and 4 books he feels are worth reading. I am familiar with 2, Joseph Campbell and the Durants, and a 3rd subject matter(TM), as I have been a TM'er since 1974.
I highly recommend anything by Joseph Campbell and the Durants, and to add that some of Joseph Campbell's works were produced to video series.
https://www.cnbc.com/2018/01/24/4-books-that-billionaire-ray-dalio-thinks-everyone-should-read.html
Take care,
Catch

FYI: Bridgewater’s Ray Dalio thinks that the stock market could see another surge and investors in cash will be left out.
Sitting on the sidelines holding on to cash as the stock market heads to fresh records? Then you may be making a big financial mistake.
Regards,
Ted
https://www.marketwatch.com/story/head-of-worlds-largest-hedge-fund-says-if-youre-holding-cash-youre-going-to-feel-pretty-stupid-2018-01-23/print

@LLJB: is a Grandeur Peak US small cap fund a pleasant personal idea or is it something you know has been discussed and planned by Grandeur Peak?

@Ben, this from David's commentary roughly 6 months before Global Micro Cap and the Stalwarts funds were being launched, which was September/October 2015.
"Funds in Registration
This month our research associate David Welsch tracked down 14 no-load retail funds in registration, which represents our core interest. By far the most interest was stirred by the announcement of three new Grandeur Peak funds:
Global Micro Cap
International Stalwarts
Global Stalwarts
The launch of Global Micro Cap has been anticipated for a long time. Grandeur Peak announced two things early on: (1) that they had a firm wide strategy capacity of around $3 billion, and (2) they had seven funds in the works, including Global Micro, which were each allocated a set part of that capacity. Two of the seven projected funds (US Opportunities and Global Value) remain on the drawing board(emphasis mine). President Eric Huefner remarks that “Remaining nimble is critical for a small/micro cap manager to be world-class,” hence “we are terribly passionate about asset capping across the firm.”"
There was another discussion in David's commentary or in a fund review earlier than that and it discussed their plans for funds and their strategy in far more depth but I wasn't able to find that again easily or I just wasn't willing to keep trying once I found the above. Most likely its the latter.
I don't believe I've ever seen this information anywhere else but I have exchanged emails with the leadership at Grandeur Peak a handful of times over the years with questions about when we might see these and other funds. They've never said anything to make me question the validity of these intentions and their answer about when was that they wanted to get their teams comfortable with the funds they had already started and their process before they expanded further. It seems to me that goal should have been accomplished by now and the real reason is that they're waiting for a time they consider more opportune to launch the other funds they had planned and that's what I'm looking forward to.

@Ted The questions to me are do we expect the S&P 500 to deliver 16.08% annualized over the next five years and do long-short funds do what they're supposed to do in a downturn? I don't think it's fair to compare their returns to the S&P in a raging bull market. It would be better to look at risk adjusted returns, alpha, Sharpe, beta and downside capture. By that take, I would still agree with you that most long-short funds aren't worth the price of admission. Their fees tend to be too high and they don't always protect on the downside as much as they should. But there are a handful that are worthwhile.

@AndyJ: What do we call yours, apple picking ?
Regards,
Ted :)
The Average L/S Equity Fund Returns:
YTD: 4.06%
1yr. 14.98%
3yr. 5.41%
5yr. 6.45%
----------
S&P 500 TR:
YTD: 6.05%
1yr. 27.23%
3yr. 13.50%
5yr. 16.08%

Hey Ted, since you opened the door to cherry-picking data points, how about this one from 2015:
SPX +1.38
QLENX +16.79
The 15%+ difference was a lot of money!
This isn't a bad point for a retail or any other investor to be looking for hedged equity exposure, depending on circumstances. (For example, not everybody is a fed retiree, and capital conservation can be a very reasonable objective for those with crummy or non-existent pensions.)

@MFO Members: Objectives be dammed, your a retail investor ,not a trader or institutional investor. Here's just one example: The almost 13% difference between CPLSX and the Haystack is a lot of money.
Regards,
Ted
CPLSX: 2017 8.89%
S&P 500 TR: 2017 21.83%

"Click below to review the documents associated with Click below to review the documents associated with your account when it transitions to TD Ameritrade. to TD Ameritrade."
TDA did a poor job of documenting changes. Look at the info it gives for bank transition: "Scottrade Bank was acquired by TD Bank, N.A. and moving forward all bank services will be provided by TD Bank, N.A. ... There are no changes you need to worry about."
This is dead wrong, and I've never seen a bank acquisition that did not say clearly and explicitly that you need to worry about exceeding FDIC limits, because now there's only one bank where you may have deposits, not two (in case you were also a TDA customer).
So in the case of conflicting statements (here's your account handbook, and your fees won't change), I'd ask rather than hope for the best.
----
Here's the best indication I've been able to find that TF fees will remain the same ($17). It's in the notice to RIAs using Scottrade:
"Commission rates will remain the same for your current Scottrade® Advisor Services accounts. All accounts that transition to TD Ameritrade Institutional will receive the same equity, option, and transaction fee mutual fund commission rates"
Here's the Scottrade® Advisor Services fee schedule, including $17 for TF funds.
----
FWIW, here's a TDA PR statement from a year ago: "With our pending acquisition of Scottrade on the horizon, we have a unique opportunity to enhance that experience even further with lower pricing for all of our clients."
That's when TDA announced that it was lowering its equitypricing to $6.95/trade, matching Scottrade's. This is the way I read their transition page verbiage - that they'd already sync'd the commissions (as much as they were going to), and so Scottrade customers would continue to benefit from low commissions, the equity commissions. TDA also lowered its option prices at the same time, to almost match Scottrade's. The same $6.95, but 75c/contract as opposed to 70c/contract at Scottrade.

@msf. Yes, I saw that from 2012 but on the TD Ameritrade website could find nothing about any fees on selling a transaction fee fund. I guess I will just contact an office and ask them about the fees. My Scottrade brokers haven’t been of any help. I can’t handle $49.99 on both purchases and sales unless I make some type of adjustment in my trading methodology. Then again been adjusting continually since my INVESCO and Strong days. Back then you could literally buy and sell their in house funds day after day if you wanted and zero commissions and without fear of being banned. Albeit eventually Strong banned me from datelining of their international funds.
They say luck is a big element in the success equation. Part of the reason my account is seven figures to the better over the past 25 years of buy and hold in the S@P was I lucked upon those two brokerage firms at just the right time in the 90s. I am a big believer in the Luck Factor!