A little bit more about that 2015-2016 dip. From M*'s article "Your Bond Fund Could Be Riskier Than It Looks" (linked to by Ted)
"the trailing five-year period through July 31, 2017, includes only one stressful period for high-yield corporates: June 2015 through February 2016. That was mainly confined to energy and metals and mining firms. ... What if, instead of rebounding in February 2016, oil prices had continued to plunge, or just settled at a much lower floor, pushing more high-yield bond issuers into financial distress? Was this scenario more or less likely than what actually occurred? Risk isn't just what happened (volatility); it's what could have happened but didn't."
From the video, it sounds like this fund had been investing in low rated bonds and got burned in the only time during its lifetime that this section of the market hiccuped. At least as of Jan 31, the fund was still over 50% in BBB or lower-rated bonds. (Jan 31, 2017 annual report). This was after moving the fund into higher quality bonds (per annual report).
Are they managing credit risk well? Are the high returns so far (despite the volatility) due to skill or simply holding mostly junk and near junk?

Live free (to take advantage of customers) or die?
Pointless. Fidelity had already downsized its Mass. operations by 60 percent between 2005 and 2015, and since then has reduced its headcount by an additional 8% of those remaining.
So it's not as though Fidelity has shown much commitment to the Bay State, except to keep execs like Ned (recently retired) and Tillinghast comfy in their Beacon Hill abodes.

@Maurice and @msf
When is the next governor election for the state??? 2018 ? :) :) :)
Reminds one of prosecutor cases a year or so before the next election cycle.

Looking at PSYPX, it looks like they take an extremely aggressive approach in working spreads (the difference between yields of differently rated but otherwise similar bonds), while trying to eliminate interest rate risk.
They do this largely with floaters, and also by hedging fixed rate bonds (e.g. with offsetting shorts - which affects costs and I suspect turnover rate). Junkster has written several posts talking about credit risk with junk bonds and how he watches this. PSYPX seems to focus on that same credit risk, though over a much wider variety of credit ratings and using lots of different devices to manage it.
It's an interesting idea and IMHO somewhat different. Eliminating interest rate risk to focus solely on credit risk might be analogized to foreign investing while hedging currency.
Though ISTM that unlike foreign currency hedging where currency markets may be decoupled from nations' stock markets, credit and interest risk may be more intertwined. I understand that from a mathematical perspective, the two pricing factors may be treated independently. What I am less comfortable with is the idea that some event, some factor, could affect one dimension of the yield curve (say, spread) without also affecting another dimension (interest rates). Are they boxing themselves in by not considering both effects?
I'm also not enthralled by their explanation for their large 2015-2016 dip, even though the fund ultimately made up the loss and much more. "The market sold off for technical reasons" is leaving me wondering what other factors could sidetrack the fund.

U.S. corporate investment grade bond issuance is about $950 billion so far this year. The expectation is that this issue class will top $1 trillion for the 3rd year running; especially in light that Amazon is going to issue bonds for the Whole Foods purchase.
As to the bond money flows noted in the article, IMO; folks remain very twitchy with machinations in D.C.-land.
'Course the edgy side of this is a boat load of cheap debt piled upon company balance sheets. Company stock buy backs will help the executives with their "performance" bonuses, eh?
All information believed to be accurate.
Regards,
Catch

FYI: Investors flooded U.S.-based taxable-bond funds with $7.9 billion during the latest week, Investment Company Institute (ICI) data showed on Wednesday, a 36th straight week of inflows that shows investors further stepping back from domestic stocks.
Regards,
Ted
http://www.reuters.com/article/us-usa-mutualfunds-ici-idUSKCN1AW2O7

@MJG: "
"The references provided in this thread have been superseded by a more recent SPIVA release that includes all 2016 data. Here is a Link to that report:" Just to be clear, the SPIVA data from both of my links is from 12/31/16.
regards,
Ted

Hi Guys,
For a long time now, I've been fascinated by the research summarized in the biannual SPIVA reports. That fascination helps me in making asset allocation and active/passive investment decisions. You too just might find the SPIVA studies a useful addition to your data when making your portfolio decisions.
The references provided in this thread have been superseded by a more recent SPIVA release that includes all 2016 data. Here is a Link to that report:
https://us.spindices.com/documents/spiva/spiva-us-year-end-2016.pdf
The numbers change, but the basic conclusion remains unchallenged. Active fund management is a difficult chore when it's success is measured against a realistic benchmark.
This end of 2016 SPIVA report now includes 15 year data summaries. These extended timeframe data sets reinforce the conclusion of just how daunting beating a benchmark really is.
In very general terms, in all fund categories, less than 20% of active fund managers outdistanced their benchmarks. That's depressing unless an investor was prescient enough to anticipate that successful cohort early in any cycle.
The SPIVA document also has category charts for 3-year periods. Over that shorter timeframe, a higher fraction of fund managers do deliver outsized outcomes but the percentages change dramatically over various .3-year periods. Investing is never easy and certainly never a certainty.
Please access this SPIVA research report. It will contribute to your investment toolkit and decision making in a positive way.
Best Regards

http://www.palmersquarecap.com/about/commentary has some interesting commentary about their approaches.
These people (Palmer Square) run PSYPX
When you look at their 'team' they are a lot of smart people - all about 40-45 years old.
They try to focus on credit markets - on the other hand they took a beating in the later part of 2015, early 2016, or later 2016.
I think that the June 2015 podcast is interesting --- where they try to paint how difficult a time it was.
Did they learn from their mistakes? Well, they've made a big comeback but SEMRX looks steadier.
Right now PSYPX is heavily in Fannie Mae paper - altho' it is a small enough fund to be more nimble.
SEMRX lost several of their managers near the end of 2016 (one of whom, Vesta Marks, went to PSYPX)
The lead mgr has been there since inception - but loss of 4 other mgrs raises questions.
SEMIX(inst. class) /SEMRX (non inst. class) also has a lot of collateralized mortgage obligations --- more circuitous than straight fannie mae.

No, of course not; I was comparing it with other real good mutual funds, as one should. Which it also outperforms iff you go back to its inception --- it had tremendous outperformance 1990-98. But look at its $10k growth for the last 20/15/10/5/3y etc etc against DODGX or FCNTX. Not consistent outperformance, not consistent underperformance, it comes and goes, and at many points it's right in there. As I wrote, a real good fund, not invariably a superior one. That's all. I have owned it.

FYI: Pension Trustee Smith: I recommend to the committee that we liquidate our International
equity assets and index our equity exposure to the S&P 500. US stocks have outperformed
for the last 20 years, and I see no reason why that should not continue. Everyone knows
that the US is the strongest economy and market in the world.
This is a somewhat fictionalized version of a comment or conversation that has gone on in many
committee discussions over the last several years in one form or another. And why wouldn’t it?
Being a US equity investor over the past several years has felt glorious. The S&P 500 has trounced
the competition provided by other major developed and emerging equity markets. Over the last 7
years, the S&P is up 173% (15% annualized in nominal terms) versus MSCI EAFE (in USD terms),
which is up 71% (8% annualized), and poor MSCI Emerging, which is up only 30% (4% annualized).
Every dollar invested in the S&P has compounded into $2.72 versus MSCI EAFE’s $1.70 and MSCI
Emerging’s $1.30. Diversification theoretically sounds good, but as Yogi Berra said, “In theory there
is no difference between theory and practice, in practice there is.” Diversification in this particular
instance seems good in theory but not so much in practice.
So, shouldn’t we agree with Trustee Smith and throw in the towel, index all of our equity exposure
to the S&P 500, and call it a day? If our goal is compounding capital for the long term, which it is,
we would not just say “No,” but something akin to “Hell no!”
Regards,
Ted
https://www.gmo.com/docs/default-source/research-and-commentary/strategies/asset-allocation/the-s-p-500-just-say-no.pdf
MarketWatch Article:
http://www.marketwatch.com/story/just-say-no-to-the-sp-500-and-buy-these-stocks-instead-say-gmos-strategists-2017-08-16/print

FYI: (This is a follow-up article)
Active investing is mired in a lost decade, but the costs associated with fund and account managment has contributed to widespread underperformance.
Regards,
Ted
http://www.fa-mag.com/news/fees-exacerbated-a-lost-decade-for-active-managers-34171.html?print
SPIVA Scorecard:
http://www.mutualfundobserver.com/discuss/discussion/34707/spiva-u-s-scorecard-the-whole-enchilada#latest

FYI: As one of the world’s fastest growing economies, India has long captured the imagination of investors. Rapid industrialization, favorable reforms and solid fund returns make India a prime destination for yield-seeking investors.
The fear of missing out frequently stalks fund investors. In the case of India, large fund inflows over the past 12 months has created a sense of urgency to better understand the opportunities and risks of this emerging market. That’s why many investors are asking whether now is the right time to gain exposure to the world’s sixth largest economy.
Regards,
Ted
http://mutualfunds.com/international-and-global-stock-funds/is-it-worth-getting-exposure-to-india/

@davidrmoran
You imply as to this: BRK/A versus SPY, all of 1999 through August 15, 2017
One may plug in whatever other ticker into this chart to compare.
Below period, total return =
BRK/A = +281%
SPY = +181%
http://stockcharts.com/freecharts/perf.php?BRK/A,SPY&n=4685&O=011000
ADDED: Fido Contra and Growth

http://stockcharts.com/freecharts/perf.php?BRK/A,FCNTX,FDGRX&n=4685&O=011000

Interesting -- I looked at some M* discussions & recognized a couple of contributors, but apparently most who comment in both use different handles(?). Two things that stood out: Depending on which discussion sub-set you choose -- yes -- MFO has a lot more "chat & gossip" but you don't HAVE to choose "all discussions". MFO is a smaller group (I assume) with a few more personal ties -- some to the fond "way-backs" of our predecessor. I don't think 1--1 comparison is reasonable.
Agree with rforno -- value in both. Depends on your views. And for a fair comparison MFO Premium should be the comparison -- not just the usual jousting.
Just my admittedly limited comparison;.

Nice catch, @Old_Joe =+1
Derf

Thought that "Synchrony Financial" rang a bell. Wickipedia: "prior to its 2014 initial public offering, which raised $2.88 billion, Synchrony operated as a subsidiary of GE Capital".

I find totally the opposite, at least the substantive, analytic, on-point brief comments to short articles. yogibearbull et alia. M* responds and corrects some of the time too. A true marketplace of ideas.
E.g., just two, almost at random:
http://news.morningstar.com/articlenet/article.aspx?id=821658
http://news.morningstar.com/articlenet/article.aspx?id=821370

@Ted - with respect to mutual funds you may be right but there are at least 10 other discussion boards at M* covering a variety of topics. I find the CEF, Fidelity and the Income & Dividend Investing forums to be quite knowledgeable and interesting.

TimesSquare Capital is a welcome addition. However, it will start with only a small sliver of the fund. Vanguard might send new cash its way while not reducing the amount managed by the other firms. Just a possibility - one that would minimize turnover.

Following the transition, TimesSquare Capital will initially manage a modest portion of the fund (less than 5%), with its allocation expected to grow over time. Schroders, which has managed the fund since its inception in 1996, will oversee approximately 66 per cent of the fund. Wellington, which was added as an advisor in 2010, will manage approximately 29 per cent of the fund with the remainder in equitized cash investments.

http://www.wealthadviser.co/2017/08/02/254593/timessquare-capital-join-advisory-team-vanguard-international-explorer-fund
Schroder is also a fine fit for this fund. It ran the fund well from its inception as Schroder International Smaller Companies (SSCIX) through 2002 when Vanguard acquired and rebranded it, until mid 2010 when Wellington was added as a manager.
I remain less than thrilled with Wellington's international management skills (as I've commented about before). VINEX did not fare particularly well in the first couple of years after the mid 2010 addition of Wellington. 2011 (90th percentile) and 2012 (68th percentile) were not good years, though it has generally done much better since (except last year).
If you want to get a purer view of how Wellington management has done with international small caps, you can look at HNSYX. It's been co-managed by Simon Thomas (who is the Wellington manager for VINEX) and Daniel Maguire (also of Wellington) since 2006. An okay fund, but not one that stands out.
Note that HSNYX was closed in 2016. It currently has $422M AUM. VINEX currently has $3.6B AUM, 29% of which (about $1B, i.e. over double the size of HSNYX) will continue to be managed by Wellington, at least for now.
Finally, I wonder whether the addition of TimesSquare Capital will accelerate VINEX's drift toward growth stocks. My vague recollection is that VINEX started out as a value fund. M* still classifies it as blend, though its portfolio drifted into growth three years ago, where it has remained.
Perhaps Vanguard will reduce Wellington's AUM and shift them to TimesSquare. The numbers suggest that would help improve the fund.