According to the latest SPIVA US Mid-Year report, over the past 10 years (includes 2008 downdraft) 81.94% and 81.82% of actively managed EM equity and EM bond funds, respectively, were outperformed by their benchmark indices.
Also, as I see it, many of the actively managed EM equity funds that have outperformed the indices, tend to have done so over relatively short time periods (BEXFX - since 2010, SIGIX - since 2012), and have a significantly different average market cap (SIGIX) and EM stock exposure (SIGIX) than the comparison benchmark.
SPIVA
Kevin

Jeremy Siegel's research paper challenges the CAPE approach to forecasting returns:
Link to his paper:
The Shiller CAPE Ratio:A New Look by Jeremy J. Siegel

Hi Guys,
Please don't overreact to this headline. It is only a forecast made by the Reseach Affiliates outfit. Maybe they're prescient, but maybe not.
The Reseach Affiliates forecast is grounded on the assumption that a regression-to-the-mean of the CAPE ratio is imminent and will take that ratio to below or near below its historical average. That's possible, but is it likely? I surely do not know.
The Research Affiliates are saying that the CAPE downward adjustment will be so dramatic that it almost totally neutralizes the positive inputs of demographic growth and productvity growth in the US marketplace. Their prediction is that US equities would be marginally positive in this next 10-year cycle and small US equities ( Russell 2000 ) would deliver zero positive inputs. Meanwhile foreign markets will produce positive rewards that exceed their historical averages.
I fail to see this major disconnect between the US and foreign markets, especially with emerging markets. Our economies are just too intertwined. Although we now have a lower percentage of the world markets, we are still the dominant player. If we sneeze, foreigners will catch a cold.
I interpret the Research Affiliates projection with more than a few grains of salt. For the most part, forecasters accuracy records are miserable. As usual, buyer beware.
Best Wishes.

John, I got into the Schwab-robo in April, 2015. duranal sounds like he or she did a nice comparison to help him choose. Me, I already had my IRA at Schwab so I wasn't going to open another account when it was so easy to click some buttons in my existing account to make it happen. Couple comments off the top of my head:
- the Schwab questionnaire that is meant to look at your age and risk tolerance in order to place you at the "appropriate" equity weighting was annoying. I wanted this to be a 60% equity weighted portfolio, but after answering the questions it had me less than 50%. The local Schwab financial adviser I work with didn't like the system either, so we decided to just fudge the answers until we got the mix I wanted. I opened my account the 1st week the Intelligent portfolio was introduced, so maybe they changed that aspect.
- I don't really mind the cash element. A lot of articles I read at the start didn't like the idea, but I saw it as a buffer that could play out better than bonds over the next few years. My cash portion is 10%.
- the portfolio is weighted heavier than I would have expected international and EM. That did not fair well mid-way through 2015 and I questioned the move when returns faltered. Since then returns have been good to very good in my opinion. My portfolio is up 9.84% YTD and about 5.7% over 1 year.
- I also liked the idea of investing in a diversified portfolio where someone else is watching diversification, balancing and reinvesting the dividends. With it, there is never the erg to buy the new hot fund or move things around at just the wrong time (which I was pretty good at).
- I didn't turn my entire IRA into the robo. I did 1/2. I still like the challenge of building my own portfolio and watching the results. If anything, the robo process has taught me build it, watch it but don't tinker. I believe everything I've read now about investors shooting themselves in the foot trying to out think the system is true. Most of us lose money doing this.
Good luck with your decision.

FYI: It doesn’t seem like much to ask for—a 5 percent return. But the odds of making even that on traditional investments in the next 10 years are slim, according to a new report from investment advisory firm Research Affiliates.
Regards,
Ted
http://www.bloomberg.com//news/articles/2016-10-26/the-next-10-years-will-be-ugly-for-your-401-k

FYI: Jeffrey Gundlach, chief executive of DoubleLine Capital, believes investors and financial advisers should not get too comfortable with the recent pattern of Federal Reserve monetary policy.
Regards,
Ted
http://www.investmentnews.com/article/20161025/FREE/161029934?template=printart

"Vanguard Emerging Markets Stock Index's low costs overcome concerns about country weightings," writes Oey in her latest analyst report.

I'm not sure I follow that line of reasoning. Is she saying that, if the cost of an index (or, for that matter, any MF) is low enough, you need not be concerned by a portfolio's very overweighted/skewed allocation? Because the low cost "overcomes" any concerns one might have? How does that work?

I don't follow it either, and here's an example of how that reasoning might "work" in practice, in dollars and cents, comparing, for the sake of argument, VEIEX to BEXFX over the past five full calendar years.
VEIEX's E.R. is lower by 1.12% a year, but it trailed BEXFX in total return (including E.R., of course) by 4.31% in 2015, 3.05% in 2014, 19.9% in 2013, 4.34% in 2012, and 1.58% in 2011 -- so not a single year represented when its lower E.R. made a difference in relative performance. (Data from M* performance pages.)

In the vein of "a fresh look" at MLPs, I was doing some semi-purposeful browsing around this past weekend and came upon a change in June re. how FSDIX will be allocated, viz. the addition of MLPs to the dvd-paying stock sleave (up to 10%, oh yes). Fidelity is thinking of it as a strategy "enhancement":
https://fundresearch.fidelity.com/mutual-funds/analysis/316145887

Joanna Bewick on upcoming enhancements to the fund:
"In June 2016, a new out-of-benchmark subportfolio providing dedicated exposure to MLPs – master limited partnerships – will be created within the fund's dividend-paying equities allocation. This as of yet unfunded subportfolio will allow Ford and me to opportunistically allocate as much as 10% of fund assets to MLPs.
"An MLP combines the benefits of a limited partnership – a business structure wherein taxes apply only to unitholder distributions and not to corporate-level profits – with the liquidity of a publicly traded company. We think MLPs are a potentially rich source of investment yield as well as predictable and stable cash distributions. Most often, MLPs are backed by energy companies, with typically modest organic revenue growth that can increase alongside inflation; thus we believe MLPs also offer potential for capital appreciation.
"In our view, the addition of the MLP subportfolio can help improve the fund's risk-adjusted returns by providing key diversification benefits. Further, this change may offer the fund a diversifying source of alpha in keeping with its mandate to deliver non-bond income along with capital-appreciation potential.
"Nathan Strik, a 10-year energy veteran with 15-years of industry experience, has been appointed portfolio manager for the new MLP subportfolio.
"We believe these changes should improve our asset allocation flexibility and allow us to take greater advantage of the investment expertise of Fidelity in positioning the fund to better meet our shareholders' expectations.
"For more than 10 years, the fund has offered a compelling option for non-bond, income-seeking investors, in our view. Our goal with the addition of this new MLP subportfolio is to help make the fund an even more compelling investment option for the next 10 years – and beyond."

I hope this isn't redundant; I don't recall anyone on the Board posting about it.

I compared Schwab and Betterment and found the following:

• Schwab charges no additional fees while Betterment charges 0.15% (for $100k+) but:
  
• The average expense ratio of the ETFs in Schwab's aggressive portfolio varies between 0.22% and 0.27%, while Betterment's varies between a much lower 0.10% and 0.13% (both rotate between ETFs with different expense ratios to do tax loss harvesting, thus the variable expense ratio).
  
• All in, this means Betterment is actually only between 0.005% and 0.03% more expensive than Schwab, but:
  
• Schwab earns money on your cash (6% minimum allocation, even in aggressive portfolios), Schwab earns money by investing in its own ETFs (e.g, SCHX) and Schwab earns money by investing in ETFs that use their platform to trade (e.g., PRF).
  

In the end, to me it was worth a few extra basis points a year to make sure the robot investing my money was programmed by human without any conflicts of interest (final bullet point above) and I went with Betterment.
Disclaimers: I did the above math a few months ago, probably did it wrong, and you should do it yourself!
Hope this helps.

Hi @Derf
K. Here's the deal. Assuming you're using a pc.
1. At the normal discussion board list, viewing all the threads
2. On the left side of the display, one finds the "Start New Discussion"
3. Below this is a column, "Categories", etc. In this column is the "My Drafts"
4. Click onto "My Drafts", which opens your saved "drafts"
5. Place the cursor on the "subject line". At the far right of the subject line you will see a small "x". Move the cursor onto the "x" and it will become "highlighted". Now click the "highlighted" x. Delete will be the choice.........click delete and the draft is history.
Let me know if this doesn't operate as noted.
Take care,
Catch

Completed N/A
DoubleLine Rising Rate Funds Webcast
Low Duration, Low Duration Emerging Markets and Floating Rate
hosted by Philip Barach, Luz Padilla and Robert Cohen
Tuesday, October 25, 2016
Start time 1:15 pm PT /4:15 pm ET /3:15 CT
https://event.webcasts.com/starthere.jsp?ei=1085774

I wouldn't be surprised to hear about an American Funds promotion soon- 1 chance to win an F3 for every F-3 share you buy.
From Wikipedia-
"The BYD F3 is a compact car (4 doors sedan, 5 passengers) produced in China by BYD Auto"
"In March 2011, a review of the BYD F3DM (dual mode electric and gas vehicle) was published in the NY Times news paper. The author gave the BYD F3DM a solid, if rather utilitarian review. The price point is reported to be approximately US$20,000 after government incentives, approximately 50% cheaper than the competing Chevrolet Volt. Currently BYD is planning a dealer network in North America with the first retail outlet slated for Los Angeles, California. 5 other dealerships are expected initially."

TD has minimum buys of 100 and 250 on the low-end for many funds I've stumbled across over the years, so I think you'd probably be okay.

@LLJB. I've successfully gotten over falling in love with ANY fund. So I don't want my shares to be grandfathered. I'm okay selling any fund. My problem is I don't want them charging my hefty commissions.
What about $100 minimum to buy? Schwab started and Scottrade and Etrade followed. Dunno about Ameritrade.

@LLJB. I've successfully gotten over falling in love with ANY fund. So I don't want my shares to be grandfathered. I'm okay selling any fund. My problem is I don't want them charging my hefty commissions.
What about $100 minimum to buy? Schwab started and Scottrade and Etrade followed. Dunno about Ameritrade.

This is a little late to the party, since EM stocks are up about 17% YTD. The way to participate is to have a diversified mix that has an allocation to EM stocks. If you can't stomach the higher volatility, own something like SFGIX or NWFFX that is geared for lower risk. Or don't own any at all, but don't be lured into buying after a big run-up.

@slick Ah, no, actually only about 12% of DBLTX is asset-backed, as of 9/30... about 3X less than carried by GIBIX.

No more Scottrade, it will be folded into TDA.

Following the finalization of the merger, the Scottrade name will be phased out, including at the Scottrade Center arena downtown, home of the National Hockey League's St. Louis Blues. The arena's name will be changed to TD Ameritrade Center

Scottrade employees will be eliminated:

"After the integration, we'll have between 500 and 1,000 jobs in the St. Louis area," Hockey said, adding that Scottrade's 3,700 employees nationwide will total about half that figure following the sale.

http://www.stltoday.com/business/local/td-ameritrade-buying-rival-brokerage-scottrade-for-billion-stl-will/article_e328c4c0-5525-59f1-ae60-8f603964cd7d.html

I'm holding out for them to roll out the F-8-E class shares. You know, the ones that have no load, no 12(b)-1, cost under .10 ER, and give you 5 extra shares each month as a shareholder bonus. :)

@Sven, yes indeed, most of our nut is there. And now that I have bailed from the Yackts and Parnassus, even more.
I have never owned CAPE on its own. I just track it irregularly, and am always (a little, but decreasingly) surprised to see it outperform all the other ones I like, or used to --- the half-dozen smart secret-sauce LC div / value etfs, e.g. And now SPLV.
@BobC, was not comparing with their benchmarks. SPHD has been superb at shorter times and also overall; I wish I had been in it.
As for ups / downs, just go to M* 10k-growth graphs (put in an mfund to start, like TWEIX or some Vanguard or some other that you favor), and then select time windows of, say, dips that made you jump. Myself, I do not see enough smoothing to matter with SPLV vs CAPE (which for some reason M* refuses to show today, hmm).
But notes from yesterday: over the pothole starting ~9/18/14, SPLV was notably better. The one starting ~8/13/15, pretty much equivalent. And the one starting before last xmas, meh, with SPLV slightly better.
So given the greater bucks I wind up with from holding CAPE, I would take it over SPLV if I had to choose b/w them only. That's all. I learned long ago (partly anyway, he claimed) not to sweat market potholes, or at least to ride them out and not flinch, or not do anything much more than flinch.

In response to BobC's above question.
Below is my best guess, thoughts and comments.
Not speaking for American Funds but from the perspective of one of their mutual fund investors I am thinking it would be very difficult, if not impossible, for them to move to only a one share class fund firm due to, the no doubt, many revenue sharing agreements they have in place with the many other financial firms they have developed relationships with through the years. Thus the large number of fund share classes necessary to serve this large and broad base of investors that they now serve through many venues.
I am an A fund share holder that paid a one time front load commission (through the years) and, with this, I received nva exchange prividledges among their A share funds without having to pay another sales charge. These sales charges, from my memory, ranged form 3.5% to 5.75% depending on the fund I was buying without applying other discounts. I'm thinking the brokerage wrap accounts that many firms have moved to that have on going fees associated with these type accounts and that I have the better deal. I have seen annual wrap fee schedules of better than 1.5% for some wrap accounts with most being around the 1.0% range and a few back of that.
I have owned some American Funds for better than thiry years with some funds that I now own were owned for years by my parents before being passed to me through gift and inheritance transfers. When you consider the number of years these funds have been owned the sales load spread over the years owned is very small. Now an on going annual account wrap and/or advisor retainer fee paid over these same years would be very, very large.
I'm thinking long term investors need to determine which route will be the best for them while I can undestand some short term investors might find more favor in the wrap fee account who wish to move in and out of their positions and trade a lot. There are some restrictions on how many nav transfers I can make over a given time span. These restrictions are designed to prevent a lot of in and out trading but do allow for repositioning my portfolio from time-to-time.
Also, know American Funds is not the only family of funds that I am invested with as they are mostly a large cap value shop. Some of the other fund families are Alger, Alps, Blackrock, Columbia, Delaware, Dreyfus, Eaton Vance, Federated, Fidelity, First Investors, Franklin, Guggenheim, Invesco, Hotchkis & Wiley, J P Morgan, Loomis Sayles, Lord Abbett, Neuberger & Berman, Principal, Prudential, Sun America, Thornburg, Virtus and perhaps a few others that I missed. All of these fund families allow for nav exchanges within their family of funds so my cost to move around within their family of funds and reposition my portfolio from time-to-time is at no cost to me.
From my thinking there are no ongoing annual wrap account fees and/or advisor sales commissions, for me, as my sales charges have already been paid except for the small 12b-1 fee that applies on some of the funds I own.
Yep, I'm thining I've got the better deal over wrap fee based accounts and fee based advisors who charge annual retainer fees.
Old_Skeet