Robert, it's their volatility as well as having to deal with bid/ask spreads which can be wide in something as thinly traded as HYMB. In the mini selloff in junk munis in early July, HYD sold off over 4% early that month (closing highs to intraday lows) while HYMB sold of over 3%. Yet the open end barely sold off over 1% while EIHYX didn't even sell off 3/4 of a %. Not including today, HYD is up only 12.20 YTD while the big three in the open end are up between 14.22% to 15.01%. HYMB is up 13.74% but again, wide spreads on a thinly traded product.

http://www.bondbuyer.com/news/markets-buy-side/foreign-investors-build-muni-market-clout-1066282-1.html
Nice move today so far in the junk muni ETFs (HYMB and HYD - neither of which I would touch with a ten foot pole) and some of the open end junk munis funds may see YTD highs today.

@Junkster, what is it about those junk muni ETFs that makes you say you wouldn't touch them with a ten foot pole? I notice they are doing well YTD, especially HYMB

rjb112- I would agree that for a long term buy and hold investor who doesn't trade, the ETF (VTI) is fine. But for an active trader dealing in six figure amounts or greater, the total return figures for VTI would be greatly reduced because of bid-asked "slippage" and commissions. Depends on how much trading is done. For less liquid ETFs, the slippage can be horrible when trading 100K or more.

@rjb112: "The Fed just revealed yesterday that the Fed Funds rate, currently 0% to 0.25%, is expected by the Fed to be at 3.75% at the end of 2017. If the corresponding rates of the bonds that the DoubleLine Long Duration Bond Fund will invest in also increase 3.75%, the NAV of the fund would be expected to drop close to 37.5%."
why do you think that the overnight fed rate has anything to do with the long term interest rates?

There has to be at least some connection. That doesn't mean that the 10-yr or 30-yr has to go up by 3.75%, but there has to be a connection.
Current Fed Fund rate: 0% to .25%
Expected Fed Funds rate end of 2017: 3.75%
If there was no connection at all, then by the end of 2017 we would have an inverted yield curve, with the overnight rate higher than the 30-yr and 10-year rates.
If there was no connection, we wouldn't have all this talk about bond fund Duration, and the typical statements about "if rates go up 1%, the NAV will go down by the amount of the Duration", etc. Yeah, they could do a much better job specifying exactly which rates they are talking about, but the implication is that as the Fed raises rates, so generally will rates rise.....
I would like to read a "Whitepaper" or good article on the relationship between the Fed Funds rate and the 10-year and 30-year Treasury yield.
Do you know of any articles on the subject?

VTSMX 5yr. avg returns= 16%, 10 year avg. = 8.66%
MY question is How does you portfolio(MUTUAL FUNDS) compare? NOW IS GONE TOMORROW...

http://www.sec.gov/Archives/edgar/data/1309187/000089418914004577/wyfunds_497e.htm
THE CORE FUND
a series of WY Funds
Class I shares: SGBFX Class Y shares: SGBYX
Supplement dated September 19, 2014 (effective at the close of business) to the Prospectus dated May 1, 2014
The Board of Trustees of The Core Fund (the “Fund”), a separate series of the WY Funds, has concluded that it is in the best interests of the Fund and its shareholders that the Fund cease operations. On August 25, 2014 the Board authorized the liquidation of the Fund and redemption of all outstanding shares on September 30, 2014, 2014.
Effective September 19, 2014, the Fund will not accept any new investments and will no longer pursue its stated investment objective. The Fund will begin liquidating its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Shares of the Fund are not available for purchase.
Prior to September 30, 2014, you may redeem your shares in accordance with the “How to Redeem Shares” section in the Prospectus. The Board of Trustees has adopted procedures that permit in-kind redemptions (permit you to receive proceeds of a redemption in securities instead of cash) Please contact the transfer agent at 1-866-329-2673 to request an in-kind redemption. The Fund may, at its discretion, redeem your shares by giving you the amount that exceeds the lesser of $250,000 or 1% of the Fund’s net asset value in securities instead of cash. In-kind redemptions, will be processed through your broker or other financial intermediary. Unless your investment in the Fund is through a tax-deferred retirement account, a redemption is subject to tax on any taxable gains. Please refer to the “Tax Status, Dividends and Distributions” section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO SEPTEMBER 30, 2014 WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE. CASH REDEMPTION PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. IF YOU HAVE QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR DIRECTLY OR THE FUND AT 1-866-329-CORE (2673).
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of a redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement and the existing Prospectus and Statement of Additional Information dated May 1, 2014, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated May 1, 2014, have been filed with the Securities and Exchange Commission, are incorporated by reference and can be obtained without charge by calling the Fund at 1-866-329-CORE (2673).

Hi Guys,
Active mutual fund management is certainly not dead, and will never die.
Why? Active managers are experiencing some tough years, investors are abandoning them in droves, and academic/industry research paints a dismal picture. The simple answer is human hubris. Nobody readily accepts average performance; almost all of us reside in Lake Wobegon. Or at least we want to believe that’s true.
Outcomes are the sum of skill and luck components. That’s not my model. Michael Mauboussin advocates this model and writes extensively about it. He uses numerous sports analyses to illustrate his findings. His overarching conclusion is that overall skill levels are increasing to a point where performance differences are small. That means that outcomes are more dependent upon luck factors since skill neutralizes itself.
Mauboussin uses ballplayer and superstar Ted Williams as a prime example. Williams was the last player to hit 400 for an entire season. He believes that record will stand forever because the skill normal distribution has become very spike-like in character; its standard deviation has decreased substantially over the past decades.
Whereas, in Williams’ playing days a plus 4-sigma performance was needed to reach a 400 batting average level, with today’s crunched higher skills, an unlikely 6-sigma performance is required to achieve that lofty 400 hitting zone.
Similarly, the professional investors today would likely outperform those from yesteryear. Now professionals are better trained, better informed, have huge staffs, and super computers. All professionals benefit from these pluses about equally, and any resultant perceived advantage tends to cancel each other out.
Seeking Alpha is a more challenging task given the competency of the players. It’s a tough game, but animal spirits keep many players in it. “Average” is just not the American way. Note that today 70% of the trading is done by professionals. Where does that place us individual investors within the skill-luck spectrum tradeoff in a relative sense? We know more, but so do these pros.
I mention Mauboussin because he has written many books that touch on this subject. His “The Success Equation” is devoted to this topic. I have not read it. But I have read a lengthy report that Mauboussin composed that formed the basis for his book. The title of the article is “Untangling Skill and Luck”. Here is a Link to that work:
http://vserver1.cscs.lsa.umich.edu/~spage/ONLINECOURSE/R15SkillandLuck.pdf
It’s a very nicely written report. It contains many investment lessons that could benefit you guys. I recommend you download and absorb it.
Best Regards.

http://www.bondbuyer.com/news/markets-buy-side/foreign-investors-build-muni-market-clout-1066282-1.html
Yesterday there was a negative article from Bloomberg about a possible spike in muni supply next month. Then later in the evening was this lengthy, but very informative, article about how foreign investors have been piling into our domestic muni market.
All the more reason to simply let price be your guide and ignore the outside noise. Albeit, I will admit you do need fundamentals to underpin the technical moves (whatever the market may be) And as we see in the link above, the dwindling supply of munis in the face of increased demand has been one of the major fundamental drivers.
Nice move today so far in the junk muni ETFs (HYMB and HYD - neither of which I would touch with a ten foot pole) and some of the open end junk munis funds may see YTD highs today.

@rjb112: "The Fed just revealed yesterday that the Fed Funds rate, currently 0% to 0.25%, is expected by the Fed to be at 3.75% at the end of 2017. If the corresponding rates of the bonds that the DoubleLine Long Duration Bond Fund will invest in also increase 3.75%, the NAV of the fund would be expected to drop close to 37.5%."
why do you think that the overnight fed rate has anything to do with the long term interest rates?
in terms of timing of the launch, it is curious. however, if he thinks that the long rates are to go up in the short term due to the improving economy and exit of the large buyer (the fed), and then will stabilize for many years at around 4.5%, then he might get a good entry point during the next 6-8 months as the fed purchases subside and the first overnight rate hikes get implemented. also, the rising equity markets caused many previously underfunded pension schemes to get close to the fully funded status. most of them went to their respective boards and investment committees to ask for the 'de-risking' mandate. as more of them get this approved, there will be a huge demand for the long-term treasuries and IG corporates. so, may be, just may be, he has a vision and perspective that some on the retail side simply lack?

Another viewpoint on the active versus passive argument.
http://m.barrons.com/articles/BL-FUNDSB-16551?ref=/focusonfunds

FYI: European stocks have taken it on the chin.
This year going into Thursday, iShares Europe (ARCA:IEV) was up a scant 0.39% vs. 9.70% for SPDR S&P 500 (ARCA:SPY). In the past three months, IEV plunged 4.77% while SPY rose 3.53%. European stock mutual funds tracked by Morningstar were down.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg0Nzg3ODE=
Enlarged Graphic: http://news.investors.com/photopopup.aspx?path=WebMut2c091914.gif&docId=718040&xmpSource=&width=1000&height=562&caption=&id=718057

FYI: Nobel Prize winner cites lower costs and questions about active manager skill as reasons to stick with index funds. Let's all have another pitcher of Kool Aid !
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=665712

I don't have a vanguard account. Generally 401k's are setup with plain jane, giant sized funds (in terms of AUM) (both of which generally go against MFO's core values), but here are a few suggestions:
MDISX
ACRNX
YAFFX
Anything from Matthews (but I don't think they are often offered in 401'ks. only an anecdotal thought so don't read more into it.)
PRHSX
PRSVX
You can look at Litman Gregory funds if you want multi-manager

The Dow 30 is oddly, a price weighted index, not a capitalization weighted index like the S&P 500 and most (but not all) other indexes.
Here's a look at the weightings of the top 25:

Considering Smart Beta article from Wisdom Tree is helpful for understanding more about smart beta: http://www.wisdomtree.com/about/pdf/what-others-saying/WisdomTree-Considering-SmartBeta-Reprint-1697.pdf

Right. It has significantly trounced VBMFX for every period since it was founded, 12y ago. It did have a stomach-jumping dip fall 08 to summer 09, which the Vanguard fund did not have. But that's what you typically get with Fidelity, at its best anyway, a rockin' funds shop with longterm outperformance. I never understand why anyone compares the two outfits, really.

>>>>>@Junkster, is the reason you would salivate at a Fed Funds of 3.75% because you would want to invest in those money market funds or Certificates of Deposit, at the decent yields that we used to see in the past?<<<<<<
Yes! Unlike most here, I have no pension/employer retirement or a large monthly Social Security check. So what I earn on my nest egg is critical. At 2% (actually 1.50% to 1.75%) and more that would be more than enough to cover my lifestyle/expenses and even continue growing my capital. I am even beginning to watch the 5 year T-Bill rate like never before albeit not sure I would ever want to tie up my funds like that.

FTBFX composition link

Is Gundlach looking for an eventual inverted yield curve? He has been outspoken about how he thinks the economy is not all that strong and an inverted yield curve would imply a recession. I can't see the Fed allowing an inverted yield curve though. I also think the economy may surprise to the upside in a big way. But then I never was much of a forecaster. I would salivate at a Fed funds of 3.75% in 2017 and the ensuing yields on money market funds.

The Fed released their "Dot Plot" yesterday, showing the expectations of where the Fed Funds rate will be, according to each of the committee members, at the end of 2015, end of 2016, end of 2017, one "dot" for each member, for each data point. They expect 3.75% by the end of 2017.
@Junkster, is the reason you would salivate at a Fed Funds of 3.75% because you would want to invest in those money market funds or Certificates of Deposit, at the decent yields that we used to see in the past?