Not to the messenger; but to the writers of the article. Man, I'm glad I am not in this line of work; requiring to pump out something, anything.
Did it really require two people to put together this piece; and what did anyone learn???
We learned that junk bond holdings went down, along with the broad U.S. equity market recently when some folks were a little bit shaken. Apparently the marketplace remains on the 1-3 month investment return(s) range, eh? I also don't recall an explanation related to the title.
The title could have been, "What have your investments done for you in the past 1-3 months?" Holy crap. with this type of article; as Robin would say to Batman.
My 2 cents for HY vs, well; the SP-500/ SPY.
Typical for the HY versus the SPY measurements for the past 5 years is that for every 1% move in SPY, HY bond sectors (active managed) move .25 - .33%; up and down. Plain and simple. (These numbers are from personal experience with our holdings during this period.)
Yes, there are times when these numbers do not follow this pattern.
A quick view of a plain jane HY bond fund; and not even the best of the bunch, is to review SPHIX vs SPY.
Total returns:
Jan, 1999 - Oct 22, 2014
SPHIX = + 166%
SPY = + 107%
The nasty period, Oct 2007- March 19, 2009
SPHIX = - 24%
SPY = - 48%
Data source is Stockcharts.com.
Your mileage may vary.....
Regards,
Catch

I agree@scott, the restaurant business is a tough one. Most don't last the first year.
I guess my comment is based on the experience of watching CNBC get ahold of a stock and start reporting on it ad nauseam. Of course how many times did they report on GE, the parent company of the network? Some might call it pumping the stock. Never mind that they had a big chunk of GE in their 401k's.

CNBC did push GE and now they talk favorably of Comcast. CNBC does pump certain stocks (Jim Rogers called CNBC a "PR agency for stocks" and whatever one's opinions of Rogers are, that's not an entirely inaccurate statement, really.)
There's also the video of Cramer from The Street a few years back where he talked about the idea that hedge funds will call up CNBC's floor reporters with a view and that view is pushing their book. It wouldn't surprise me if it happens often.
CNBC pushes whatever is talked about often and whatever they think is of interest to retail. Things like social media stocks. Rarely do you get any discussion of foreign stocks at all and discussion of unheard of names has become rarer and rarer. I was stunned when one of the anchors referenced the band Fugazi, speaking of things most probably haven't heard of.
The video in question (from Youtube:) While people have their opinions on Cramer and have probably seen this video, it's worth watching from the standpoint of I think it's the reality that people have to at least kind of keep in the back of their mind.

FYI: Few of today's top-yielding dividend mutual funds have been around for 10 years. Few are beating the S&P 500 year to date. And none of the top yielders have higher returns than the S&P 500 in the past 10 years.
For example, Alpine Dynamic Dividend Fund leads the pack with a 12-month yield of 6.28%, far above the S&P 500's 1.98%, according to Morningstar data.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg1ODc5MzM=
Enlarged Graphic: http://news.investors.com/photopopup.aspx?path=WEBlv1023.gif&docId=723101&xmpSource=&width=1000&height=1152&caption=&id=723098

Personally, I've noticed some comments about the threads I occasionally do before this thread and it kind of gets to a point where it's certainly not upsetting but a little surprising and kinda "well, fine, that's not something that has to be done". The threads were intended to encourage discussion (because I do like this forum and I guess I'm of the thought process that I'd like to see it be more inclusive and less a little club for the same group of 10-20 people) and were open threads on a discussion forum. I'm glad that people enjoy them and I'll continue to do them or anyone else is welcome to start them whenever they see fit.
The other thing that I think may be a little bit of an issue is, what are you (and I direct this to everyone) looking to get out of this forum? What do you expect it/want it to be? Maybe that's a discussion to have.
Personally, feel that when I make a decision to invest in something, I'm responsible for that decision. For me, nothing here is going to be an "actionable idea" in and of itself, ever - I may find someone's idea interesting and if I do, I'll do the research and then I'll make that decision. That should be for any investment idea from someone on the internet, whether here or on seekingalpha or a morningstar article or whereever - you have to do the research and decide whether or not that investment is something that is right for you and understand it yourself rather than go on what an article says.
To me the whole idea of the threads wasn't about actionable advice as much as it was some manner of "small talk", where people could just kind of throw out what they like. Rather than multiple threads of people talking about what they currently like/are looking at, there could be something of a chat (once every week or perhaps two) within the larger chat forum.
"Is there a reasonable time period for our ideas to pan-out? Or will we be held up to scorn if the investment doesn't make money next week?"
Well, then it becomes something else, where we're writing articles with detailed recommendations and specific time periods. This, combined with the fact that many of us are very different, different risk tolerance, different time horizons, etc. I buy with the intent of holding for possibly years. Others may trade by the day. I don't disagree with the various methods that people use on this board (I'm of the mindset that hey, if that's working for you, great) and, if anything, am fascinated by the diversity of ideas and approaches.

Futures are a very small portion of my portfolio and its my play money. Most of the time I make bets based on a combination of fundamental and technical aspects of whatever I trade. Right now I'm long Canadian $ and short Euro and keeping my eyes open for opportunities to short Yen and 30 Year Treasury Bonds.
Finally, I have a few investments in private equity that have become a much larger percentage of my portfolio than they should be but it shouldn't be too much longer before I find out whether my thought process was right or not.

What you're doing sounds very cool. I own a fair amount of private equity and I view it more as the desire to have continual exposure to that asset class with the understanding that it is volatile and does go through cycles. Despite the variable nature of the dividend from the private equity companies, I'm largely paid to wait with it.

FYI: Bond fund managers may not mind being recognized as “bond fund manager of the year,” but the biggest prize is the bond fund manager of the decade. Why? Because one year of performance history is not a meaningful or accurate reflection of asset management skill.
Regards,
Ted
http://investorplace.com/2014/10/best-bond-fund-managers-decade/print

FYI: Low interest rates have led many investors to buy high-yield funds holding below-investment-grade, or junk, bonds.
It’s a strategy that has paid off over the past few years. But lately, investors have seen the other side of these high-yield bond funds: negative returns. As the stock market turned volatile, the funds lost money on average over the past month and three months, even as high-quality bond funds delivered positive returns
Regards,
Ted
http://blogs.wsj.com/totalreturn/2014/10/22/know-what-junk-bond-funds-are-and-arent/tab/print/?mg=blogs-wsj&url=http%3A%2F%2Fblogs.wsj.com%2Ftotalreturn%2F2014%2F10%2F22%2Fknow-what-junk-bond-funds-are-and-arent%2Ftab%2Fprint&fpid=2,121

Rob Arnott and his firm, Research Affiliates is the source of that chart showing the expected 10-year returns of different asset classes.
Rob Arnott has managed the Pimco All Asset All Authority fund for 11 years, since inception. So how well has he done implementing his firms' forecasts into a real life portfolio? It appears that he can invest in anything, anywhere with this fund, PAUIX.
Above, PAUIX. Below, the S&P 500 over the same timeframe.

Can someone do the simple arithmetic and see whether change in $10k conforms or not? Is this possible to do? It is easy to imagine someone on the phone does not fully comprehend either.

Reading the link that @davidrmoran posted, I think @kevindow is correct. At the end of the first paragraph, it states the adjusted net expense ratio is 1.81%. The other expenses that were not excluded add up to 6.32%.
"The Adj. Net Expense Ratio of 1.81% excludes acquired fund fees and expenses, dividend expenses, borrowing costs and brokerage expense on securities sold short which totaled 6.32% for the prior fiscal year."
Someone correct me if I got this wrong.

You are actually paying an 8.13% expense ratio. Here is the key sentence, with emphasis on "except:"
"Ordinary operating expenses includes all Fund expenses except brokerage, taxes, borrowing costs such as interest and dividend expenses on securities sold short, Acquired Fund Fees and Expenses and extraordinary expenses."
So you are paying 6.42% in "Other Expenses" and 0.06% for "Aquired Fund Fees and Expenses" -- both of which are excluded from the 1.90% limit -- and you are also paying for the management fee of 1.65%, which is below 1.90%. Total damage is the 8.13%.
M* could report the actual expense ratio paid by investors in a conspicuous place, ideally on the fund's front page, but they choose not to do so, likely for the benefit of the fund company at the expense of common investors. And it would not violate any SEC regulation for M* to report an "Investor Expense Ratio" much like they report "Investor Returns."
Kevin

Hi Guys,
I'm frequently puzzled by these 10-year projections. This one is no exception.
The chart shows the prediction that foreign equities will outdistance US equity real returns by a large margin. I suppose the expectation is that the foreign markets will overcome their many current difficulties. I suspect the projection reflects a regression to the mean thinking since over the last two decades US equities have generated about twice the returns over foreign holdings.
Also, I don't understand the U.S. equity return estimate given the decomposed large cap and small cap predictions. In this instance, it seems like the composite sum of the components is greater than either of the components. If true, the perpetual motion machine has been reinvented.
I must be misreading the bar chart.
Best Regards.

Hey,
I own one (PASAX) and I am keeping it.
Old_Skeet

Likewise, I'm keeping PAUDX. I can buy your fund in my 401k but haven't.

Wait a second. Their YTD performance number is flat. If 8.13% is being charged means they made that return. Something is not right. Please see below note in the prospectus

The Adviser has contractually agreed to reduce Management Fees and to absorb the Fund’s other operating expenses (for the life of the Fund) to the extent necessary to limit annual ordinary operating expenses to an amount not exceeding 1.90% of the Fund’s average daily net assets. Management Fee reductions and expenses absorbed by the Adviser are subject to repayment by the Fund for a period of three years after such fees and expenses were incurred, provided that the repayments do not cause the ordinary operating expenses of the Fund to exceed the 1.90% limit. Ordinary operating expenses includes all Fund expenses except brokerage, taxes, borrowing costs such as interest and dividend expenses on securities sold short, Acquired Fund Fees and Expenses and extraordinary expenses. The Adviser’s right to receive repayment of any Management Fee reductions and/or expense reimbursements terminates if the Adviser ceases to serve as investment adviser to the Fund. This agreement may be terminated by either the Fund or the Adviser upon not less than 60 days prior written notice to the other party, provided, however, that (1) the Adviser may not terminate the agreement without the approval of the Board of Trustees, and (2) the agreement will terminate automatically as to the Fund if, and when, the Adviser ceases to serve as investment adviser of the Fund.

I don't think investors are paying 8.13%

@Vintage Freak
You are actually paying an 8.13% expense ratio according to the most recent prospectus and confirmed with a telephone call I just made to TFS Capital.

:( Please feel free to give me some good news as well.
Time to rethink entire association with TFS.

FYI: In a world of low bond yields and slow economic growth, historically realized 5-6% real (7-8% nominal) asset class returns may be unrealistic expectations for the future.
Regards,
Ted
http://www.ritholtz.com/blog/2014/10/asset-classes-real-10-year-expected-return/print/

Any time you see articles of why now is a great time to buy XYZ asset class, it's time to get cautious, IMO.
Most of these financial writers are all talk. Their job is to write about stuff. I will bet 98 out of 100 vastly under perform a 60/40 mutual fund. By the time junk funds are on their radar screen, most of the move has probably occurred.
From what I can tell this particular article is written by a fund company that actually has a High Yield ETF.
Not bashing you John, just chiming in with my $0.02 fwiw.

I agree@scott, the restaurant business is a tough one. Most don't last the first year.
I guess my comment is based on the experience of watching CNBC get ahold of a stock and start reporting on it ad nauseam. Of course how many times did they report on GE, the parent company of the network? Some might call it pumping the stock. Never mind that they had a big chunk of GE in their 401k's.

Yeah, here we go again, almost carbon copy of Summer 2013. Deja vu, same messaging prior to and subsequent, rinse and repeat.

I looked at Matthews, too. They specify on their webpage that estimates will be posted in mid to latter part of November. 19th of the month, if I recall.

@00BY, thanks for posting the very interesting study!! The numbers may be a little surprising but not too much. When I think about the SAI's I've looked through, its not very often I see a pension plan or endowment on the list of 5% owners. It's almost always the Schwab's, Fidelity's, TD Ameritrade's, E*TRADE's and Vanguard's that own a very large portion of fund assets and in most cases they would represent households through company sponsored 401K plans, IRAs or individual accounts. I do guess, however, that Grandeur Peak's breakdown is not reflective of the same split. It could be that the 19% Institutions number are non-households according to the study. It isn't totally clear, though, whether these numbers are based on where they get their assets or whether its the number of investors regardless of the assets they invest.
I did discover a few interesting facts based on this study though. I'm a little shocked that 53% of people who own mutual funds are not college graduates (47% are). I know that 50 or 60 years ago a college education wasn't as common as today, but it strikes me as a shocking number.
It seems a little ironic that 47% invest in mutual funds to reduce income taxes. I wasn't actually aware that mutual funds reduced taxes. Maybe its just a misuse of the words, since they may consider the mutual funds held in a 401K plan or IRA as reducing their taxes, when in fact its the IRA or 401K that affects taxes, not the mutual fund. Otherwise, I think the only way a mutual fund lowers taxes is by having a lower return or higher expenses than if you invested in some other way, and neither of those seems like a good thing.
I also found out my wife belongs to a different generation that I do, barely, but that explains a lot! :) I knew she was young, but I didn't realize she was that young.