FYI: (Click On Article Title At Top Of Google Search)
The third quarter of 2015 started off well, but the volatility that followed was dramatic. Stock and bond funds, almost regardless of type, ended with a loss.
Regards,
Ted
https://www.google.com/#q=A+Bad+Quarter+for+Stock+and+Bond+Funds+barron's

FYI: (Click On Article Title At Top Of Google Search)
The sky is not falling for high-yield bonds. Eight funds and ETFs with yields ranging from 5.7% to 12.8%.
Regards,
Ted
https://www.google.com/#q=High-Yield+Bonds+Look+Attractive+barron's

As someone who (like so many here) studies the Commentary texts intensely, I am trying to fathom the extreme Leuthold valentine.
>> They’re an independent firm that produces financial research for institutional investors.
okay
>> They do unparalleled quantitative work deeply informed by historical studies that other firms simply don’t attempt.
Seriously, unparalleled?? Not just unsurpassed? Did you really mean to write that?
>> They write well and thoughtfully. x 2
Moreso than the best of the others who do so?
>> Quite beyond that, they put their research into practice through the Leuthold Core (LCORX) ...
k, who doesn't?
>> Core was a distinguished “world allocation” fund before the term existed. $10,000 entrusted to Leuthold in 1995 would have grown to $53,000 today (10/01/2015).
Lots of different managers were making decisions during those two decades, per M*, unless you are claiming Leuthold himself really ran the show, regardless of the group dynamics and inputs, until 2011, but also still, albeit mostly retired, that he has major say from jealousy-inducing Bar Harbor.
>> Over that same period, an investment in the Vanguard 500 Index Fund (VFINX) would have growth to $46,000 while the average tactical allocation manager would have managed to grow it to $26,000.
Not sure whether to go there, using many owned oranges. One would not want, over those two decades, to compare Core with FPACX or OAKBX; but are they tactical? One would not want to compare Core with FCNTX or FLPSX or PRBLX (management change here) or even GABEX, listed here since all equities (SP500) was mentioned.
>> All of which is to say, they’re not some ivory tower assemblage of perma-bears peddling esoteric strategies to the rubes.
All righty then.
>> The bottom line is that a cyclical bear began in August and it’s got a ways to go.
Huh. If they say so. Maybe they're right.
Whence this valentine and pitch ?

Central banks are still concerned with the nasty "deflation". Euroland just went negative for "inflation" from a report a few days ago.........correct me if I am wrong. South Korea reported today a +.6% inflation rate.
Lets see/think............Norway just cut rates again, yes? India did a rate cut the first part of this week, I recall. Although India is benefiting muchly from inexpensive crude pricing.
As a bond investor over the years, I remain concerned about the amount of issuance in high yield, corp. and gov't. bonds. HY in the energy sector is already getting wacked, the M&A issues bonds every which way on the cheap in order to buy "something", just "anything". And centrals banks worldwide have so many issues flowing around at really low yields............ I suspect the words "what the hell we gonna do when no one wants these anymore?" have been spoken at more than one meeting.
The intra-day low yield on the 10 year was 1.91%.
Holy crap........just a very large boat load of all flavors of bonds floating about.
To repeat, in spite of having been a bond person for a number of years; I really don't like the fast forward picture.
Hang in there.
Catch

What's the 10-year telling us? Very little I suspect. But a little ...
It says,
1. Trend persistency is alive and well (borrowing one of Junkster's phrases).
2. There's an aging population (pushing people into annuities and bond investments viewed as "safe").
3. There's fiscal uncertainty in the U.S. (the battle over the budget and a bunch of fruit-cakes running for President).
4. There's a slowdown in China (Surprise! Economies don't always grow exponentially and markets sometimes correct.)
That should cover it.
Crash's link is on Jeff Gundlach's forebodings about a rate hike (around the time of the last FOMC meeting). Fair enough. But I wouldn't read a tremendous amount into it. Economists seem about equally divided on the question. And, Gundlach does have a dog in the fight - so to speak.
http://news.investors.com/100915-775007-compounding-interest-and-investment-returns-to-help-your-kids.htm

I think Crash's post provides a snap shot of some of the concerns about weakness in the economy that are reflected in today's 10 year rate...
Crash's Post

Thank's I didn't see that. I think a bear market will also put a crimp in the Fed's plans.

I think Crash's post provides a snap shot of some of the concerns about weakness in the economy that are reflected in today's 10 year rate...
Crash's Post

Hi, Press.
The firm is supported by several minority owners:
From today"s news: "Lovell Minnick Partners is almost home after a trip through Asia. The firm agreed to sell a portion of its stake in investment management firm Matthews International Capital Management LLC to Japan’s Mizuho Financial Group. Matthews International, also known as Matthews Asia, invests solely in Asia and serves as the investment adviser for the Matthews Asia Funds, a group of 16 open-ended equity and fixed-income mutual funds organized in the U.S. and 11 SIVACs registered in Luxembourg."
The earlier stories are linked below. There is some concern from friends of the firm that the outsiders may have fostered a culture change of sorts, which might account for some of the manager departures and the launch of newer, narrow funds (their newest funds are Value, ESG, Emerging, Focus). As with all stories of institutional change, it's impossible for outsiders (and almost impossible even for insiders) to know quite why things transpired as they did.
For what that's worth,
David
http://matthewsasia.com/matthews-news/press-releases/article-342/default.fs
https://www.pehub.com/2015/09/lovell-minnick-sells-part-of-matthews-asia-stake/

The US 10 year 52 week high was 2.5% - now it is 1.98% with a unemployment rate at 5.1% and the Fed talking about a raise soon.
So what is that low rate telling us?

Who can say how much of her record at Loomis was her or Fuss?
Her new charge, EVBAX, is obviously a very aggressive offering, with 20% invested in stocks, almost 30% split between EM and HY debt, and another 16% in convertibles (which too, generally get whacked when stocks drop). --- I view that allocation as very aggressive for an overall portfolio -- let alone for something labeled a "bond fund".
She took a "shoot for the moon" approach out of the gate -- maybe looking to prove her mettle. It has not turned out well.

@expatsp +1 I think value added active managers can also be found in the bond arena.

FYI:
Regards,
Ted
October 1, 2015
Dear WEALTHTRACK Subscriber,
Today’s front page of “The Wall Street Journal” sums it up: “A Painful Quarter for Markets.” The third quarter, which just ended was the worst for stocks since 2011’s third quarter during the European debt crisis. In the three months ended yesterday, the S&P 500 lost 6.9% and the Dow Industrials dropped 7.6%. Concerns about a slowdown in global growth, especially in China and faltering corporate earnings contributed to the damage. According to the Journal, analysts are predicting third quarter profits for S&P 500 companies will decline 4.5% versus a year ago. They fell 0.7% in the second quarter. It will be the first time since 2009 that profits fall two quarters in a row. However, a big decline in energy company profits is responsible for most of the anticipated damage. Without the estimated 65% decline in energy operating profits the S&P’s earnings would be up 3.4%.
Another key contributor to the market’s malaise was the Federal Reserve’s decision not to raise interest rates in September. After nearly seven years of its unprecedented zero interest rate policy, or ZIRP as it’s known on Wall Street, the consensus was it was time to get interest rates out of emergency mode and back to some sort of normalcy.
It turns out Federal Reserve Chairwoman Janet Yellen agrees with the consensus. In a stunning speech the week after the Fed’s decision, Ms. Yellen made a lengthy case for a rate hike this year “…it will likely be appropriate to raise the target range for the federal-funds rate sometime later this year and to continue boosting short-term rates at a gradual pace thereafter as the labor market improves further and inflation moves back to our 2% objective.”
As veteran Fed watcher, Roberto Perli at Cornerstone Macro noted, after months of not knowing where Chairwoman Yellen stood on rate hikes, we now have clarity on her views at least.
This seemingly endless fixation on when and if the Fed will raise short term rates might seem overdone but the signals and actions of the world’s most influential central bank, of the world’s reserve currency country has huge implications and can steady or roil global markets.
This week’s guest, Kathleen Gaffney, is among those very concerned about recent Fed policy and its financial impact on markets and investors, but she is also more optimistic than most about the world’s growth prospects.
Gaffney is Co-Director of Diversified Fixed Income at Eaton Vance Investment Management. She is also lead portfolio manager of the Eaton Vance Bond Fund, which she launched in early 2013. Until 2012 Gaffney was Co-Portfolio Manager of the Loomis Sayles Bond Fund with legendary investor Dan Fuss where their team was named Morningstar’s Fixed Income Manager of the Year. In this week’s interview, I asked Gaffney why the Federal Reserve’s decision not to raise interest rates in September was a mistake and about the contrarian positions which have hurt her fund’s performance this year.
If you’d like to see the show before it airs, it is available to our PREMIUM subscribers right now. We also have an EXTRA interview with Gaffney, about bond market illiquidity and how she is handling it, available exclusively on our website.
As always, if you have comments or questions, we encourage you to connect with us via Facebook or Twitter.
Thank you for watching. Have a great weekend and make the week ahead a profitable and productive one.
Best Regards,
Consuelo

Another take on it, as well as who else is starting to do it.
http://www.etf.com/sections/daily-etf-watch/daily-etf-watch-jpm-plans-europe-funds
@ibartman Momentum, of course! That's the one I couldn't recall. Thanks for looking it up. Now, if they were to offer a fund in the small cap space (where I think their out-performing strategy is really their claim to fame), then I'd have to admit I'd probably have to dig fairly deeply into those documents, despite the fact I'm still quite reluctant to use ETFs for anything other than short(er)-term trading purposes. And that, it appears, puts me increasingly in the "outlier" position, once again (sigh):

from http://www.ai-cio.com/channel/ASSET-ALLOCATION/Smart-Beta-s-ETF-Domination/?curator=thereformedbroker&utm_source=thereformedbroker

New Model Portfolios are contained in this newsletter along with why the cash allocation has been reduced in all the model portfolios.
http://funds-newsletter.com/oct15-newsletter/oct15.htm

David Snowball's Monthly Commentary for October 1, 2015
http://www.mutualfundobserver.com/2015/10/october-1-2015/
(Note to readers: I screwed up yesterday and linked David's September Commentary - which explains the initial reactions.)

Champlain:
http://www.cipvt.com/pdf/Champlain Estimated Yr End Distributions 09 17 15.pdf
Dimensional Funds - DFA
https://my.dimensional.com/insight/special_postings/171466/
Evermore
http://www.evermoreglobal.com/dividends.html
Harbor
http://www.harborfunds.com/downloads/2015_Dividend_Estimates.pdf
Loomis
http://www.loomissayles.com/internet/internet.nsf/content?readform&ctype=capitalgains&channel=fa
Oakmark
http://www.oakmark.com/News/News-and-Insights-Placeholder/2015-Fund-Distribution-Estimates.htm
Parnassus
http://www.parnassus.com/parnassus-mutual-funds/dividend-info
Royce
https://www.roycefunds.com/news/2015/10/open-end-funds-2015-year-end-distributions

Uh, Valeant might be in a spot of trouble - or at least have some considerable explaining to do.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/09/valeant price chart.jpg

The Lazard prospectus does say: "The Investment Manager generally seeks to substantially hedge foreign currency exposure in the Portfolio against movements relative to the US dollar by entering into foreign currency forward contracts, although the Portfolio’s total foreign currency exposure may not be fully hedged at all times."
The Northern Funds (multiple funds described in its prospectus) are allowed but not required to hedge: "Each of the other Funds may enter into forward currency exchange contracts for hedging purposes, in anticipation of the purchase of securities and for liquidity management purposes, but not for speculative purposes or to seek to enhance total return, and are not expected to use these instruments as a principal investment strategy." (p. 74, pdf p. 76)
Another difference is that the Lazard fund is diversified, while the Northern fund is not:
Lazard: "Although the Portfolio is classified as “diversified” under the 1940 Act, it may invest in a smaller number of issuers than other, more diversified, investment portfolios."
Northern: "The Fund is classified as non-diversified under the Investment Company Act of 1940, as amended (the “1940 Act”), and may invest more of its assets in fewer issuers than 'diversified'
mutual funds."
That is however misleading. Lazard is the more concentrated fund, investing in 30 or so stocks, Northern invests in around 80 (which could simply represent the addition of two portfolios, from Lazard and Brookfield). That seems to be confirmed by M*'s overlap tool. It shows 25 of Lazard's holdings are in the Northern fund, usually at half the concentration. That is, the same ratio, just cut in half since Lazard manages half the Northern fund's assets.

See my comment to Ted's Aug 15 post:
Is Your Small-Cap ETF Now A Biotech ETF?
http://www.mutualfundobserver.com/discuss/discussion/23079/is-your-small-cap-etf-now-a-biotech-etf

August 15
Ted: Thanks for link. It's more than just "small cap" investors.
Consider ... Is your Sequoia Fund now a biotech fund?
Morningstar: SEQUX Portfolio Summary
Morningstar: SEQUX Portfolio Holdings

CURRENCY HEDGING IN NORTHERN FUND?
I believe [unsure] that one difference between (at least the Lazard-managed-portion of the) Northern Trust Fund (NMFIX) is that they don't appear to hedge their currency risk.
Suggested by prospectus available here:
https://www.northerntrust.com/documents/prospectuses/individual/prospectus_3708710_statutory.pdf?bc=24061071
and page # 35 of the annual report available here:
https://www.northerntrust.com/documents/annual-reports/mutual-funds/individual/nf_annual_multi_manager.pdf?bc=24061071
I don't believe that there is much currency hedging going on with the Northern fund.
I recall that the directly sold Lazard fund does hedge currency risk. Can others confirm?
The Fact Card for the Lazard fund (Note 1, on back at bottom) notes that the Custom Benchmark for fund is:

The Custom Infrastructure Index (USD Hedge) is the UBS Global 50/50 Infrastructure & Utilities Index (Hedged USD) from inception to March 31, 2015 and the FTSE
Developed Core Infrastructure 50/50 100% Hedged to USD Net Tax Index afterwards.

Fact Card available at right, here:
http://www.lazardnet.com/us/mutual-funds/lfi-open-end-funds/real-assets-portfolios/global-listed-infrastructure/
For what it is worth, Deutsche Bank has a very tiny (AUM) ETF that follows the same index as IGF and GII [S&P Global Infrastructure Index], but which hedges currency exposure. Info available here:
DBIF: http://tinyurl.com/DBIF-GIFund
IGF: http://www.etf.com/IGF
GII: http://www.etf.com/GII
CHART
http://tinyurl.com/dbif-igf-glifx-nmfix