http://www.sec.gov/Archives/edgar/data/1215880/000141304216000370/neimansupplargecap497.htm
497 1 neimansupplargecap497.htm
Neiman Large Cap Value Fund
Class C Shares (NECMX)
For Investors Seeking Long-Term Capital Appreciation
Supplement dated March 16, 2016 to the
Prospectus and Statement of Additional Information dated August 1, 2015
____________________________________________________________________________________
The Board of Trustees of Neiman Funds (the "Trust") has concluded that it is in the best interests of the Neiman Large Cap Value Fund (the "Fund") and its shareholders that the Fund cease offering Class C shares. Effective immediately, the Fund will not accept any new investments in Class C shares.
Class C shareholders of record as of March 29, 2016, will have their Class C shares exchanged for load-waived Class A shares (NEAMX) effective March 30, 2016. That is, Class A shares will be issued without any sales charge. Exchanges are made at net asset value such that the value of your investment does not change as a result of the exchange. Additionally, Class A shares have lower operating expenses than Class C shares. An exchange of shares is not a taxable event for federal tax purposes.
IF YOU HAVE QUESTIONS, PLEASE CONTACT THE FUND AT 1-877-385-2720.
________________________
This Supplement and the existing Prospectus and Statement of Additional Information ("SAI") each dated August 1, 2015, provide relevant information for all shareholders and should be retained for future reference. The Prospectus and the SAI have been filed with the U.S. Securities and Exchange Commission, are incorporated by reference, and can be obtained without charge by calling toll-free 1-877-385-2720.
____________________________________________________________________________________________________________________
http://www.sec.gov/Archives/edgar/data/1215880/000141304216000371/neimansupptacticalincome497.htm
497 1 neimansupptacticalincome497.htm
Neiman Tactical Income Fund
Class C Shares (NTCFX)
For Investors Seeking Total Return With Capital Preservation as a Secondary Objective
Supplement dated March 16, 2016 to the
Prospectus and Statement of Additional Information dated August 1, 2015
____________________________________________________________________________________
The Board of Trustees of Neiman Funds (the "Trust") has concluded that it is in the best interests of the Neiman Tactical Income Fund (the "Fund") and its shareholders that the Fund cease offering Class C shares. Effective immediately, the Fund will not accept any new investments in Class C shares.
Class C shareholders of record as of March 29, 2016, will have their Class C shares exchanged for load-waived Class A shares (NTAFX) effective March 30, 2016. That is, Class A shares will be issued without any sales charge. Exchanges are made at net asset value such that the value of your investment does not change as a result of the exchange. Additionally, Class A shares have lower operating expenses than Class C shares. An exchange of shares is not a taxable event for federal tax purposes.
IF YOU HAVE QUESTIONS, PLEASE CONTACT THE FUND AT 1-877-385-2720.
________________________
This Supplement and the existing Prospectus and Statement of Additional Information ("SAI") each dated August 1, 2015, provide relevant information for all shareholders and should be retained for future reference. The Prospectus and the SAI have been filed with the U.S. Securities and Exchange Commission, are incorporated by reference, and can be obtained without charge by calling toll-free 1-877-385-2720.

Valeant appeared, at one point, to be printing money. I suspect that "Mike" told a really good story about how beautifully all the pieces of his strategy were coming together, which was true until it wasn't. I suspect that Sequoia's tradition of "a few great stocks" led them to want to believe that they'd found the next Buffett (the only other CEO to whom they'd entrusted such a large fraction of the portfolio). They got into the stock, it paid off, they got in deeper, then deeper, then way deeper ... at which point it had become, psychologically, a "too big to fail" position. It had to work. So when it started to wobble, they bought more.
Valeant is owned by 1226 mutual funds, including Vanguard's Total International Index. You beat the crowd (and the index) only by acting differently than they act. In Sequoia's case, that meant going all-in. They had 30% in Valeant. The second most-committed set of funds are all sitting around 4% in Valeant. And that did promise returns unlike any other.
David

As of February 29, the fund's holdings accounted for just over 90% of its assets. That implies a cash position just under 10%. With its focus on called bonds and other ultra-short duration securities, it generates a lot of reinvestable cash every week. My recollection is that Mr. Sherman has to find $4 worth of securities each year for every $1 in the portfolio.
The fund is up 0.89% YTD and might find the first quarter up 1%. Given its risk profile, it continues to hold the highest five-year Sharpe ratio of any fixed-income fund and second-highest over the past three years. The Sharpe remains positive over the past year, but far lower than the Sharpe ratios for other sorts of fixed-income funds.
David

@MFO Members: Here is today's M* article placing Sequoia "under review" !
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=745818

Sequoia (SEQUX) has always been a Gold fund in the judgment of Morningstar's analysts. Today it was placed "under review." Morningstar offers two reasons for that: (1) investors are bailing out and have pulled $800 million over the past six months. That goofs with both execution and tax efficiency. (2) "[T]he team does not seem to have taken any steps to mitigate the risks of such a large position.... Because of these concerns, we have placed this fund under review."
Oddly, they also placed it "under review" on October 30, 2015. At that point, Valeant was over 30% of the fund, investors had presumably been pulling money and the management team conducted their slightly-freakish public defense of their Valeant stake. Following the review, the analysts reaffirmed their traditional judgment: Gold! The described it as "compelling" in the week before the review and "a top choice" in the week afterward.
There's no evidence in the reaffirmation statement that the analysts actually talked to Sequoia management. If they didn't, they were irresponsible. If they did and asked about risk management, they were either deceived by management ("don't worry, we're clear-eyed value investors and we're acting to control risk") or management was honest ("we're riding out the storm") and the analysts thought "good enough for us!" I don't find any of that reassuring.
Similarly, up until quite recently Morningstar's stock analyst assigned to Valeant recognized "near-term pain" while praising the firms "flawless execution" of its acquisition strategy and the "opportunities [that] exist for Valeant long term."
David

FYI: (Click On Article Title At Top Of Google Search)
The US public continues to vote decisively against traditional fund management, which attempts to manage equities actively, and beat broad benchmarks, in return for a fee. In the 12 months to the end of January, according to Morningstar, some $245bn flowed out of active funds while $408bn flowed into passive funds, which merely seek to match the returns of a benchmark and to minimise their fees. Once a niche category, passive funds now account for 32.5 per cent of US assets managed in mutual and exchange traded funds.
Regards,
Ted
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=active+fund+managers+find+their+voice+FT

@MFO Members: From 2012-YTD the S&P 500 Index has outperformed SEQEX. I agree with BobC, its time to move on.
Regards,
Ted

Here are the 2/29 holdings (from RiverPark):
http://www.riverparkfunds.com/Funds/ShortTermHighYield/FullHoldings.aspx
90.06% are securities. There are not sufficient details given to completely identify the securities, but based on M*'s analysis a reasonable guess would be that all but 2% are bonds, and the remainder are convertibles.
From one of M*'s methodology papers: "Morningstar includes securities that mature in less than one year in the definition of cash."
M*'s analysis of the fund portfolio says that its average effective maturity of bonds is 1.83 years. So we can guess that M* is calling about half of the bonds "cash". Possibly a bit less, depending on the distribution of bonds. Let's say it's 40%.
So M* describes 40% of the 90% of bonds as cash. That's 36%. Add in the 10% that Riverpark says is not held as securities, and we've got 46% cash (by M*'s definition).
One can call these short term bonds whatever one wants - cash, ultrashort bonds, securities. Regardless of what one calls them, recognize them for what they are - bonds maturing in under a year, that have better-than-cash yield but also retain credit risk.

VRX dropped 51% today.

Didn't SEQUX go down 7.69% today, 3/15?

Looks like the fund went down by 15% today. At first, I thought they had sold Valeant but the quote from Morningstar was 3/14. When I saw the quote was old, I searched and found today's.

Asset Allocation RPHYX
Type %
Net %
Short %
Long Bench-
mark Cat
Avg
As of 02/29/2016
Cash 46.66 — 46.66 — 4.42
US Stock 0.00 — 0.00 — 1.33
Non US Stock 0.00 — 0.00 — 0.01
Bond 51.02 — 51.02 — 92.87
Other 2.32 — 2.32 — 1.36

Hi Carefree. If you didn't own SEQUX, would you buy it to fill that space? I always thought I would like to buy that fund if it ever opened up again, but I now feel like it is not the same fund it was 5-10 years ago. Trust in management and stewardship, a term borrowed from M* is not there for me, even though M* still ranks the fund gold for that aspect.
What's your gut say? For me. the best fund in the world is now in question. There are plenty of good funds to choose from.

@bee Thanks for the info, keep on buzzing !
Regards,
Ted

For those who might like to listen in:
Wednesday, March 23, 2016
3p.m. ET
30-Minute Live Webcast Followed by Q&A
Current market fluctuations may have you concerned — particularly as you approach or are in retirement. T. Rowe Price can help you take steps to more confidently manage your investments despite market uncertainty.
Sign up here:
TRP event webcast

FYI: Morningstar manager research analysts upgraded the Morningstar Analyst Ratings of one fund and four target-date series in February, but downgraded 11 funds and three target-date series. We also initiated coverage on two funds and two target-date series. Some notable changes are highlighted here; a complete list can be found in the tables below.
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=745317

Good evening all,
An interesting subject: "Cash Is Now A Sin."
Even though I think of myself as a good Christian according to this article I am a big sinner by holding such a sizeable cash position within my portfolio.
In review of a few recent Xray analysis the funds within my portfolio, which consists of forty seven, currently hold an average of 3% in cash which is down from the year ending analysis number of about 5% in cash back in December. My fixed income funds usually hold more cash than my equity funds.
As I entered 2016, combined, my portfolio was holding about 25% in cash. Now, my cash bubbles at about 22% due to the buys I made during the recent market selling stampede, scheduled retirement distributions plus the funds themselves are now holding less cash than they were at year end. My portfolio, on average, generates about 1.25% in cash (yield) per quarter on amount invested. With this, I could easily be close to a 23% cash allocation by the end of the first quarter.
I'll continue to hold the large cash allocation as I am thinking of selling some of my equities since the S&P 500 Index is currently selling at a TTM P/E Ratio of 23 according to the WSJ. With this, stocks are not currently cheap and are richly priced from my perspective using the Rule of Twenty. Since, I am above my target allocation (50%) to stocks, now at about 53%, soon might be a good time to pair back a few of my equity positions and rebalance as summer approaches.
I am thinking my sizeable cash allocation is a blessing and orginates from Biblical teaching. Besides, when I make harvest of my plantings, and book profits, the Lord gets his share.
Have a good evening,
Old_Skeet

Actually, Wesley Gray and Co. are innovators in the Robo advisory space with the advent of an active managed method that "may" actually produce alpha beyond benchmark. This through exposure to just two stock universes (based on Fama French factors) and combined with trend following component ( vs. the others that are based on the Modern Portfolio Theory model and are "over" diversified, IMO, in REITS, emerging / international equities, emerging / international debt, domestic equities, etc ) blog.alphaarchitect.com/2016/03/03/why-we-built-an-active-robo-advisor-and-why-you-should-too/#gs.06MOFCs

Funds can't raise cash because of manager "career risk" ( they have to be careful to at least match the "benchmark" from year to year / quarter to quarter). This is one of the dilemmas of investing in mutual funds. Others are fees, various rates of portfolio turnover, manager turnover. Investing in index ETFs eliminates these factors ( DIY investors can go to cash when they want and fees/expenses can be very low). Mutual funds and individual stock portfolios are the product of the 20th century investment landscape. ETFs represent the 21st century landscape ...

Can't access the article, so here's a shot in the dark:
Observing my funds, especially at T. Rowe Price, I've observed over several years that they have been avoiding holding cash if cash is defined as a money market fund or bank deposit. Obviously, they don't want money earning near 0. However, many funds do hold suitable higher yielding proxies for cash (that is unless your investing horizon is extremely short). Here's three low risk funds you're likely to find in place of cash, often in substantial percentages, in T. Rowe Price 's allocation and balanced funds.
Limited Duration Inflation Focused Bond Fund TRBFX
Ultra Short Term Bond Fund TRBUX
Short Term Bond Fund PRWBX
(Correction to my earlier comments: PRWCX does not invest in the above funds from what I can tell. But, interestingly, as of last December the fund held 14.9% in Price's "Reserve Investment Fund", a money market fund apparently designed to serve their own uses.)
So, I wonder if Zweig is including these types of investments as cash in whatever numbers he's floating around? Additionally, recognizing that more and more individual investors now use allocation, balanced and target date funds, fund houses and managers may feel a bit more freedom to keep their equity funds aggressively invested.