Below is link to 2014 distributions (dividend and capital gains) on Vanguard ETFs...notice anything interesting?
https://personal.vanguard.com/us/funds/etf/all?sortorder=asc&sortorder=asc&sortorder=asc&sortorder=asc&sort=name&sort=name&sort=name&sort=name#upperTB=distTBI&lowerTB=overTBI
Here is same for the Vanguard Mutual Funds...
https://investor.vanguard.com/mutual-funds/all-vanguard-funds#tab=overview

Most fund groups that push for insider ownership allow a little wiggle room. Managers might be required to place "substantially all of their investable assets" in the firm's products, or "all of their equity exposure" in their own fund, or invest their year-end bonuses in them. That allows them to put their kids' 529 money in target-date funds or to maintain age-appropriate income exposure and so on.
The rub is that the SEC does not require disclosure of a firm's policy, if any, and the SEC investment bands are badly out-of-date. The top band for fund directors is "over $100,000" and the top band for managers is "over $1,000,000." As stunning as I find the phrase "over $1,000,000," apparently large financial services firms compensate key personnel pretty generously. Who knew? For many, investments in the millions are routine and in the tens of millions are not unusual.
As ever,
David

the distribution is precisely due to the fact that you (and many others) have bailed and caused forced selling.

If YAFFX (+12% distribution) is any indication, this year the tax man cometh.

Glad I bailed out of this fund earlier this year. Its supposed to do well in down years, but that hasn't been the case this year (-12% YTD). And now it's paying a hefty distribution? No, thanks.

Actually, the cause of the "forced" selling is poor performance. That happens when a fund doesn't live up to expectations.

One the the F P A folks admitted that they were amazed by the reaction of F P A Paramount (FPRAX) investors to the fund's conversion a couple years ago. They replaced the manager, raised the management fee, did a 180 degree turn on the portfolio, unleashed a massive tax bill and their investors not only didn't leave, they didn't even ask questions.
On the bright side, at least we'll never have a lanolin shortage. There are simply too many sheep around.
David

Thanks for all these ridiculous articles on MLPs lately and other factors that allowed me to add to ETE (which will now be the largest pipeline/energy infrastructure company with the purchase of WMB) at $19 the other day.
Brookfield will spin-off another MLP next year - their private equity division.
If I didn't want to limit the amount of MLPs I own I would have added to EPD. I will probably not be into the upcoming Brookfield spin-off, but will continue to own BIP and especially BPY.

FYI: Poor performance could send the income-generating category back to direct investing, where it belongs.
Regards,
Ted
http://www.investmentnews.com/article/20151007/BLOG12/151009946?template=printart

@soaring, I have had bad luck underwater the last 10 months with PDI, for the first or first few of which I did not reinvest, so it's tricky to figure against the standard growth-10k chart. Plus the discount to holdings. I will bail as soon as I get to the surface.

Thank you David. Yes, I remember the heads-up in the commentary.
Hmmm, investors first...

c

M* had Bill Miller marked as a good steward for LMVTX because he owned $1M of his fund. Then he bought $70M yacht.
I want to see significant investment of persons net worth, relative to fund assets etc. For instance, last time I calculated Bruce Berkowitz reports $1M + of ownership of FAIRX, while actually owns like $42M of it. THAT's significant ownership.
So to answer the original question, when the manager REALLY feels your pain is when you can be that much confident unless something has fundamentally changed regarding why you bought the fund, you can hold on.

the distribution is precisely due to the fact that you (and many others) have bailed and caused forced selling.

If YAFFX (+12% distribution) is any indication, this year the tax man cometh.

Glad I bailed out of this fund earlier this year. Its supposed to do well in down years, but that hasn't been the case this year (-12% YTD). And now it's paying a hefty distribution? No, thanks.

willmatt72
Other than the usual suspects, mostly individual REITs in the non-taxable account.
Having said that...I did find something which occurred a few years ago in my taxable account...in 2011. All of my funds with the exception of VGHCX all lost money. But my entire income sleeve of individual dividend paying stocks had a 11% gain. So while most folks wouldn't consider that subset of stocks to be diversifiers, I do. It may have been just a weird alignment of stars, but it did happen.

Had a savings account when I was a kid (1950s-60s). The bank gave me a little passbook and when I put saving in the local bank from my summer job, the bank teller would record the sum in the book and initial next to it. If I took money out of the bank, they would take the little book and record that.

@hank Wow...I had forgotten about that...me, too! Walking down Memory Lane right now :)
@Old_Joe agreed...not to mention people who have their "savings" in rental properties, businesses, etc.

@msf- math is certainly not my strong point, so this is probably a really stupid question: with respect to "below B" in that table, is it the assumption that 100% of the bonds in that category will default? That seems quite extreme, so it likely doesn't mean that. What is the implication of "relative" here? Does it perhaps mean that this category is 100 times more likely to default than "AAA"? If that's so, how would they come by that particular judgement?

The description of the table says that these are relative rates on a scale of 0 to 100. So the worst category (below B) is given an arbitrary figure of 100. The other categories are given figures representing the percentage of defaults they have relative to the percentage of defaults of "below B" bonds. Thus BBB bonds, with a relative rate of 5, default 5% as often as "below B" bonds.
What those rates are, I don't know. As I think about it, I can't say what period these rates are computed over. Is M* using a one year default rate (percent of BBB bonds that default within a single year), or more likely a cumulative default rate (percent of BBB bonds that default at one or more points over their lifetime)? "Default" almost certainly includes any bond that misses a payment; but does it include technical defaults (see Meridith Whitney), where some condition of the bond is violated even if all payments are made?
The NRSROs publish figures on defaults vs. ratings, so mappings from credit ratings to default rates are known. Here's a paper on defaults from S&P:
2014 Annual Global Corporate Default Study And Rating Transitions
P.S. Don't sell yourself short. It's not a stupid question, and I initially wondered about that 100 also. Below B bonds are either in risk of imminent default (C range) or in default (Ds); still some of these bonds don't default.

I like PIMIX/PONDX. I like to split my fixed income exposure in tax-deferred space into safer/high quality stuff and another with riskier/higher total return. I currently pair DBLTX with PDI which is an OEF managed by David Ivascyn. I replaced PIMIX with PDI when the discount was widened this Summer.
I like to keep 1/2 of my fixed income to diversify the equity risk. DBLTX is negatively correlated with equity. See here. FWIW, In taxable space, I own 1 OEF and 3 CEF muni funds.

Had a savings account when I was a kid (1950s-60s). The bank gave me a little passbook and when I put saving in the local bank from my summer job, the bank teller would record the sum in the book and initial next to it. If I took money out of the bank, they would take the little book and record that.
Nothing against banks or saving accounts. FDIC insurance is nice to have. But I tend to live on the edge in a lot of ways and am very comfortable with just about everything (liquid) we have in mutual funds.
If needed, I can write checks against our money market fund at T. Rowe Price ($500 minimum) or press a few keys on the IPad and have them shift $$ from any fund to our local bank overnight. So - excuse me, but I just don't get the big deal about savings accounts.
:)

@msf- math is certainly not my strong point, so this is probably a really stupid question: with respect to "below B" in that table, is it the assumption that 100% of the bonds in that category will default? That seems quite extreme, so it likely doesn't mean that. What is the implication of "relative" here? Does it perhaps mean that this category is 100 times more likely to default than "AAA"? If that's so, how would they come by that particular judgement?

I noticed the quality numbers, too. Still, if 47% is AAA rated, then why is the average quality only BB for the fund? He must own some real junk in there.

It's a default-rate-weighted average, so that the average quality represents the average or expected default rate of the portfolio as a whole. Here's M*'s methodology; note the default weight values in the table at the bottom of p. 2.
https://prnedelivery.morningstar.com/Average_credit_Quality_Methodology_Change_2010.pdf

Very interesting. I never realized that they use this method for calculation. It does seem skewed since the range for default rates is so narrow for higher rated bonds compared to low quality. Maybe I'm wrong but having just a few lower rated bonds can drive down the overall quality in a hurry. At least according to *M.

I noticed the quality numbers, too. Still, if 47% is AAA rated, then why is the average quality only BB for the fund? He must own some real junk in there.

It's a default-rate-weighted average, so that the average quality represents the average or expected default rate of the portfolio as a whole. Here's M*'s methodology; note the default weight values in the table at the bottom of p. 2.
https://prnedelivery.morningstar.com/Average_credit_Quality_Methodology_Change_2010.pdf

Is DoubleLine's Jeffrey Gundlach The New Bond King?
JF talks about differences among TOTL, DBLTX, Core (DBLFX), and Flexible.
FWIW, I own DBLTX which is the best antidote for equity risk.

OK, I can out-wimp willmat any old day: Cash 43% / Bond Funds 12% / Equities & Equity Funds 26% / Real Estate (other than SF home) 19%.