We thought we’d start continue up with the 130 U.S. equity funds which have passed their second anniversary but have not yet reached their third, which is when conventional trackers such as Morningstar and Lipper pick them up. As Charles has repeatedly demonstrated, the screener at MFO Premium allows you to answer odd and interesting questions. When markets are rising, everybody’s question is the same: who’s making the most?
There are two ways to answer that. One way is to look at total returns. As of Halloween (our data is current as of the end of last month), the clear winner is the $8 million Zevenbergen Genea (ZVGIX) fund, a focused fund with an emphasis on tech. (What’s a “genea”? Old Greek word related to “genealogy,” it sometimes signals “a generation,” which aligns with the fund’s emphasis on have a long-term view.)
Zevenbergen Genea Fund ZVGIX
Multi-Cap Growth
23.6% annualized return since inception through October 2017
ProShares S&P 500 Ex-Health Care ETF SPXV
Large-Cap Core
18.1%
Leland Thomson Reuters Private Equity Index Fund LDPIX
Specialty Diversified Equity
17.9%
ProShares S&P 500 Ex-Energy ETF SPXE
Large-Cap Core
17.8%
Alambic Small Cap Value Plus Fund ALAMX
Small-Cap Value
17.8%
Sometimes a fund is good not because the fund is good, but because its investment style or focus is hot. For example, a hot energy market makes even bad energy fund managers look like geniuses. You’ll notice that two of the six top performers are distinguished for what they did not invest in: “ex Health Care” and “ex Energy” tells you that these funds are winning just because the excluded sectors are, for now, losing.
To control for that, we can look for funds that are distinctive better than their peers. Seven funds are beating their peers by more than 5% per year so far, with 50% of those being passive.
Leland Thomson Reuters Private Equity Index Fund LDPIX
Specialty Diversified Equity
17.9% APR since inception
13% annual lead over their (in this case, irrelevant) peer group
Zevenbergen Genea Fund ZVGIX
Multi-Cap Growth
23.6% APR
10.7% annual lead of their peers
ProShares Russell 2000 Dividend Growers ETF SMDV
Small-Cap Core
15.5% APR
7.2% lead
HCM Dividend Sector Plus Fund HCMZX
Equity Income
14.9% APR
7% lead
ProShares S&P MidCap 400 Dividend Aristocrats ETF REGL
Mid-Cap Core
13% APR
6.1% lead
VictoryShares US Small Cap High Div Volatility Wtd Index ETF CSB
Small-Cap Growth
13.8% APR
5.8% lead
Invesco PowerShares S&P 500 ex-Rate Sensitive Low Volatility Portfolio XRLV
Multi-Cap Core
13.4% APR
5.2% lead
Only two of the six funds with the highest total returns are also substantially leading their peers. Half of the peer beaters consciously factor dividends, which sometimes signals the quality of a firm’s management, into their strategies.
Bottom line: it’s not important to know that a fund is winning. It’s important to know why a fund is winning. That’s hard to suss out, but relative performance and some idea of portfolio biases gives you a place to start.
Off to Dallas for a professional conference. Pray for me!
David

@Davidmoran since I received some free trades when I tranferred to Fido, it helped. ML does not sell VWINX and some other Vg funds along with a few other funds I wanted plus my advisor and I disagreed on etfs which I wanted to add. I will admit I do like having those smaller allocations to some of the funds and etfs I have added and I do have spifs from time to time which i play with, bottom line is 1/3 of my ira portfolio is conservative and all of my taxable is in that category. So about half of my total investments are fairly staid. The rest chalk up to OCD lol.
My results in total for ytd Is within one percent of the s + P including bonds, and while at ML a bit less, but with so many changes this last year, will be easier to track going forward.Thanks for contributing to the thread.

@slick,
I missed that you moved from ML to Fido, since I have just done the reverse.
Fido offers Vanguard funds?? Not ntf, right?
Since this is supposed to be an empirical thread, I would like to see the annual results of all those with lots of funds, say more than, I dunno, 10?
(I too concur in the tested take that adding a half-dozen at the 1%-2% level does nothing other than assuage OCD....)

@Crash
Here is a response from TRP that was recently posted to the M* forum site:
"This being Nov 7, I checked on the status of this fund with TRP today. I was informed that the inception date has been postponed to "the middle of next year". Vague explanation, no additional information available. :-( "
See:
http://socialize.morningstar.com/NewSocialize/forums/p/377522/3871721.aspx#PageIndex=2
I had planned to put some available $'s into TCAPX instead of adding to my existing investment in VWINX.....but may rethink that plan....

Hi @slick, my 'observation' was not about small caps, but on all the sector funds/etfs you own, 11 of them. Just looks from the outside that you're throwing bets against the wall and hoping something sticks. My question will always be, why not pick a trusted fund manager or team to use their analysis to do the sector weighting. Do you believe you are better at it?

this is 2.5y old but a lot of it still applies, seems to me
https://www.usatoday.com/story/money/2015/02/27/investing-do-you-want-to-send-your-money-abroad/24077415/

FYI: There are no easy answers in the financial markets right now because of the run-up we’ve experienced over the past number of years. The alternative — lower valuations, higher yields, more bargains, etc. — is, however, worse because that would mean everyone would have less money in their portfolios. We have to play the hand we’re dealt and anyone who tells you with certainty they know how things will work out from here is nuts. Legendary investor Howard Marks gave investors 6 options in an update this summer. In a piece I wrote for Bloomberg, I give the pros and cons of the best options.
Regards,
Ted
http://awealthofcommonsense.com/2017/11/caution-alone-is-not-an-investment-strategy/

"Regardless of whether luck accounts of 92% or 98% of investment performance, the implications are the same: Almost all attempts to beat the market will fail."
A misleading statement because he's conflating beating the market with beating half of one's peers. Some other problems with the analysis:
It assumes that years are fungible. By that theory, even if only giant caps are doing well in a given year, a genuinely skilled manager in large (not giant) caps should still outperform his peers. Sure. Market conditions change over time. I'm happy with a manager who does very well some years and not excessively badly other years.
Because performance tends to bunch near the middle, tiny differences get amplified in percentile rankings. A small change in relative performance can easily shift rankings across deciles for one year. There is less instability over longer periods of time (thus highlighting another problem with focusing on year 1 vs. year 2).
There are enough studies showing that management skill does exist to raise doubts about the approach here. The usual question is not whether skill exists, but how to identify it prior to investing. MJG alludes to this with his coin toss.
Here's a random page pulled in searching for an example of a study on management skill:
https://www.gsb.stanford.edu/insights/jonathan-berk-are-mutual-fund-managers-skilled-or-just-lucky
"research [by Stanford faculty] suggests that the typical mutual fund manager is persistently skilled, and that top performers are especially good. It’s just that the market is so hypercompetitive that most investors can't benefit from the skill ..."
Here's the working paper referenced in the article:
http://www.nber.org/papers/w18184.pdf

Three words: don't do it.
When I read the opening paragraph of the NYTimes article, my thoughts immediately jumped to the question: is this a prohibited transaction? That would void the IRA, making it immediately taxable (and subject to penalties if you're under 59.5). "When the I.R.S. spots a violation, it shows little mercy." Not a risk to assume lightly.
A music teacher is running an instrument leasing business (inside the IRA) to his students. That might be considered a prohibited transaction because the teacher (a "disqualified person") appears to be providing a referral service (referring his students) to his IRA's business. I really don't understand the rules well enough to say. A disqualified person, such as the IRA owner, must not furnish goods or services to the IRA.
A key virtue of traditional IRAs (e.g. provided by brokerages) is that they ensure you are not coming close to prohibited transactions. Maybe if you're a Mitt Romney building a $100M IRA a self-directed IRA would make sense, but then you'd also have a slew of lawyers backing you up and watching out for you.
It gets even worse. Do a search on "checkbook control IRA". I'll let the pages you find explain that one.
Here's a page I just dug up explaining prohibited transactions and containing lots of links to very technical writeups of ambiguities in the law, what could go wrong, etc.
https://www.questira.com/ira-prohibited-transactions-every-investor-needs-to-know/
To its credit, this is a page being provided by one of the companies that you can use to set up a self-directed IRA.

I think we’re setting up for something like a repeat of ‘87. Market action past few days looks shaky. Anytime a lot of folks start thinking it’s easy pulling 15-20% a year you’re looking for trouble - especially at a time of 1-2% on CDs. Might make it into January. Doubt it.
Market crashes and corrections do have a lot to do with luck. Like the old game of musical chairs.
For the record: Current DJ 23,400, S&P 2578, NAS 6728, 10-Year 2.38%

.....And the wonderful young agent was, typically, tripping over himself with multi-syllabic utterances so that he would sound intelligent and informative, grasping at different words in order not to be repetitive, and so that there would not be any "dead air" between us. Jay-zuz, I hate that. I suppose they are TRAINED never to use the word "no," even when "no" is the appropriate, true and correct reply. And if they dare to simply communicate within a common sense framework, they'd earn demerits. I guess the trainer-types have all forgotten the 13th Commandment: ESCHEW OBFUSCATION.
..... That 5 minute conversation should have taken maybe 90 seconds. At least, amid all the pap flapping around me from his end, I was informed that there is no way to figure out or plan for just when that fund may open for business, and no way to let me--- and interested folks like me--- know when it happens.
Interesting summary prospectus, though. Already posted here, and I bookmarked it. Monthly pay-outs. Stock-bond split that is divided more evenly than the PRWCX which we all already know and love. I'm interested because I'm looking to grow my dividends these days, preparing to start taking divs. rather than re-investing them. And TCAPX can hold foreign securities, too, though not in amounts that would make it function like my current holdings, PRSNX or PREMX. Yes, I'm ALMOST married to TRP. I have a good slug in Mairs & Power, too, and then just a couple of very small other holdings. Here's that link, again:
https://www.sec.gov/Archives/edgar/data/1689311/000168931117000021/canpta-may35.htm

Hi Guys,
I too suspect that most investors do not fully understand the tradeoff that exists between skill and luck when making investment decisions. Luck is a far more significant contributor then is commonly appreciated.
We are fooled by randomness (that's the title of an excellent book authored by Nassim Nicholas Taleb). The likely reason why we are fooled is that we don't recognize how large numbers of participants contribute to a respectable number of winners.
For example, if 1000 market forecasters exist, after a single forecast 500 are probably correct given an equal interpretation of the likely market outcome. For the successful forecasters, repeat this test again, and the successful number is reduced to perhaps 250. If the challenge is repeated 8 times, a simple probability calculation suggests that maybe 4 forecasters would be correct on all the 8 tests. These fortunate four might be skillful, but they just might be lucky..
These lucky few announce their prescient calls and are now respected as market forecasting wizards. The large number of initial forecasting candidates almost guarantees this outcome and the subsequent misleading interpretation. Indeed, we are often victims; we are fooled by randomness.
Best Wishes

Thanks @Ted. Interesting story. Reading over PRWCX’s most recent report (June ‘17 I think) Giroux commented that if rates rose much more he’d increase his high quality longer dated bond position - mostly out of concern over equity valuations. He went further in saying he felt bonds would prosper if equities fell off a cliff. Well - rates are up. We’ll see if he followed through. Somewhat unrelated to the CALPERS story - except that both point to a growing concern about valuations among money managers. Guess a lot of us are waiting for “the jello to hit the fan”.
Here’s where I’d appreciate more insight from those in the know: With the equity markets having roughly tripled in less than 10 years, why are so many public pension funds still in trouble? If the reported numbers are correct (particularly your own state, Illinois, Ted), than imagine the trouble those pension funds would be in had not the equity markets recovered.

They're in trouble because they promise too much money.

Not for everyone, but interesting enough to post. Self Directed IRAs once set up properly can invest in many things other than merely just mutual funds, stocks/bonds or ETFs.

It may be surprising, but it is true: No law dictates that retirement plans be invested in stocks, bonds and mutual funds. In fact, the government allows investors to put the money in their I.R.A.’s and Roth I.R.A.’s into almost anything, be it condominiums or airplanes. A growing number of Americans are doing just that, through so-called self-directed I.R.A.’s that steer clear of mainstream investments.

Exotic I.R.A.’s: Leaving Stocks and Bonds Behind
nytimes.com/2007/10/20/business/yourmoney/20money.html?_r=1
Cautions to Consider:
real-estate-in-your-ira-be-careful

Hi @hank
Bondland: Short duration yields/rates are higher, but.....
http://www.reuters.com/article/usa-bonds/treasuries-u-s-2-year-note-yield-hits-another-9-year-high-flattening-continues-idUSL1N1NK0ZW
Pension funds:
1. Actuaries didn't anticipate the longevity of the "boomers".
2. Perhaps many pension funds never really achieved their goal of 8-8.5% real return adjusted for inflation.
3. At least relative to employee union pension funds; many had/have "cost of living" adjustments built into forward pension payments; including pension benefits that continue to have a "health plan", too.
4. Under-funding of pension plans, over the years. This is a known condition for many pension funds.
I recall over the past several years reading about existing pension funds in Michigan municipalities, though still having contributions to the fund; finding that paying the retired employee pension/health care outflows was consuming 50% of the assets of the fund.
Example: Central States Pension Fund (Teamsters); of which, I read about several years ago. A story of, we may be able to maintain the monetary base of the fund; but ya'll will have to take a 30% decrease in your pension or the fund will crash and burn. Check some of the links in the search below, in particular to "UPS" drivers who were moved into the Central States Pension Plan. The link below is for numerous search items.....read for your choosing.
https://www.google.com/search?source=hp&ei=EBoLWrGHNJuzjwSX9LzgDw&q=central+states+pension+fund+news&oq=central+states+pension+fund&gs_l=psy-ab.1.1.0l10.1146.11288.0.13276.27.27.0.0.0.0.314.3286.1j25j0j1.27.0....0...1.1.64.psy-ab..0.27.3280...46j0i131k1j0i46k1j0i10k1.0.clw8X-GyJ9Q
Side note: Although great to have a pension, the majority of pensions do not have a "cost of living" adjustment. If inflation was running at the "old" annual rate of 3%, or so; after 10 years folks would be loosing about 1/3 of their spending power from a pension, yes? I spoke with a few folks I know a number of years ago about this as a future planning tool relative to their spending habits going forward.
Well, this is my small take on such a big world.
The snowblower is lubricated, gas full and tested. Now waiting for April again in Michigan.
Take care,
Catch

Thanks @Ted. Interesting story. Reading over PRWCX’s most recent report (June ‘17 I think) Giroux commented that if rates rose much more he’d increase his high quality longer dated bond position - mostly out of concern over equity valuations. He went further in saying he felt bonds would prosper if equities fell off a cliff. Well - rates are up. We’ll see if he followed through. Somewhat unrelated to the CALPERS story - except that both point to a growing concern about valuations among money managers. Guess a lot of us are waiting for “the jello to hit the fan”.
Here’s where I’d appreciate more insight from those in the know: With the equity markets having roughly tripled in less than 10 years, why are so many public pension funds still in trouble? If the reported numbers are correct (particularly your own state, Illinois, Ted), than imagine the trouble those pension funds would be in had not the equity markets recovered.

Anyone getting giddy on European Funds?
Europe Heading Toward Golden Period:
from-lost-decade-to-golden-years-euro-economy-picks-up-the-pace
To me, a good managed fund navigates these dynamics better than a broad index. Many here are familiar with risk averse FMIJX.
Using a "European only" fund screen shows:
DFA's (DFCSX),
Brown Advisory's (BAHAX) and
Columbia's (CAEZX) all having higher risk adjusted returns (high Sharpe Ratios).
From a fee expense angle the nod goes to (VEURX), but it is an index approach.
PIMCO's USDollar unhedged (PPUDX) has 97% exposure to Developed EU and uses PIMCO's derivative strategies in an attempt to outperform the index. The USDollar hedged version is PPIDX.
T. Rowe Price's (PRIDX) has International Small/Mid Cap exposure splitting itself between Europe/UK (48%) and Japan / Em Asia (45%).
Fidelity's (FSCOX) has a similar approach with a strong convictions towards Japan (33%), Europe (32%) and the UK (19%).
Under performers with high exposure to Europe include:
AAIPX - 4*, (68%/24%) Greater EU / Greater Asia
TRIGX - 3*, (64/32) Greater EU / Greater Asia
LISOX - 3*, (56/30) Greater EU / Greater Asia
BBHLX - 3*, (65/19) Greater EU / Greater Asia, (17%) cash
THGIX - 2*, (62/24) Greater EU / Greater Asia
USIFX - 4*, (62/33) Greater EU / Greater Asia
CIVVX - 4* (65/27) Greater EU / Greater Asia
MQIFX - 4*, (58/37) US/Greater EU
USAWX - 5* (58/39) US/Greater EU
IVFLX - 1* (28/65) US/Greater EU
An interesting World Allocation fund, BBALX, which is divided pretty evenly into thirds-US Equity, Non US equities, and US Bonds- but over weights Non US equities (50/50 Greater EU/Asia) compared to the category.

FYI: The role of skill is far smaller than most of us want to admit.
Regards,
Ted
https://www.marketwatch.com/story/when-you-realize-how-much-luck-goes-into-investing-you-might-change-your-methods-2017-11-13/print

Pudd, You are correct as I am a Journeyman electrician. Don't dwell on the ex-wives thing. Latest wife is wonderful. It's not that I think CHTTX is a good fund it is the only US MC fund choice in my workplace 401. Two of my midcap choices would be WSMNX AND UMBMX.

Investment grade and high yield bond market overview for last week, from M*.
http://news.morningstar.com/articlenet/HtmlTemplate/PrintArticle.htm?time=1823137