@junkster, as imperfect as it may be, I use BKLN ETF as proxy for BL/FR funds. It peaked on Sept 15th and has been trending downward ever since. Are there better alternatives? I hold majority of BL/FR in PRWCX. The fund holds about 10-15 % BL and the rest of bonds are in treasury.

+1 hank New TRP slogan : Invest With Confidence Men !

A debtor files for bankruptcy voluntarily. The idea behind voluntary bankruptcy is to protect the debtor, to provide breathing space for the debtor to restructure or start over.
https://www.law.cornell.edu/wex/voluntary_bankruptcy
OTOH, creditors can under some circumstances force a debtor into involuntary bankruptcy.
https://www.justia.com/bankruptcy/involuntary-bankruptcy/
Hypothetically, a debtor might be solvent but simply choose to stiff his lawyers, his contractors, his employees, etc. Regardless of solvency, his creditors might try to force him into bankruptcy. But the debtor is likely to argue that the amounts owed are in dispute, which is a defense against involuntary bankruptcy.
So more often, the creditors just sue. Or they might try to work some arrangement out with the debtor. From what you wrote, it sounds like ZEOIX is working those angles.
Covenants are basically conditions that a lender imposes on a borrower before lending money. A simple example: before a bank will issue you a mortgage, it will require you to have homeowners insurance. In this way it protects its security interest (the real estate) but that does little to ensure timely mortgage payments.
Conversely, breaching covenants doesn't necessarily mean that payments are missed.

DEFAULT – A failure to pay principal of or interest on a bond when due or a failure to comply with other covenant, promise or duty imposed by the bond contract. The most serious event of default, sometimes referred to as a “monetary” default, occurs when the issuer fails to pay principal, interest or other funds when due. Other defaults, sometimes referred to as technical or non-payment defaults, result when specifically defined events occur, such as failure to comply with bond contract covenants, failing to charge rates sufficient to meet rate covenants, failing to maintain insurance on the project or failing to fund various reserves. Generally, if a monetary default occurs or if a technical default is not cured within a specified period (usually after notice) such default becomes an event of default and the bondholders or trustee may exercise legally available rights and remedies for enforcement of the bond contract.

MSRB Glossary of Municipal Securities Terms

@hank- Maybe change the title head from 1.5% to ~ 5% ?

Maybe not ... :)

@ Crash,

as of September 9th, @junkster said ,
I trade only bond funds because of their persistency of trend combined with their lack of volatility. There are exceptions, but since 2000 there has always been a bond category that has beaten the S@P annually. Of course those exceptions are pretty glaring ala 2013, 2017, 2019, 2021, and so far this year. So with an extra $100,000 would just add it to the bond category that is far ahead of the bond pack this year. That would be bank loans/floating rate which I have mentioned previously, Some are already ahead double digits YTD. Aside of March they have been as steady a trender as you could want. They are massively overbought, ripe for a correction, and with fears of rising defaults. But, ( and I have to continually remind myself of this) overbought in Bondland can stay overbought for long periods of time. Then again, this wouldn’t be an investment just a trade. Investment is a foreign term to me. I think the only time I was ever in a position since the 1990s for more than four to six months was in IOFIX in 2020/2021.

https://mutualfundobserver.com/discuss/discussion/61478/how-would-you-invest-100-000-right-now/p2
——Also he mentioned few weeks later that he sold 1/3 of bank loan/ floating rate bond.———-
The quick rise rise of 10 year treasury yield has impact all bonds. I notice the short term junk bonds have peaked and falling too this week. YTD they were the few pockets of bonds that were up high single digit return. High yield corporate bonds such as TUHYX did well YTD and they also started falling last week. Is this déjà vu again of the brutal 2022 among bonds?
So what are your plan?

>>>>>September 21 edited September 21 Flag
Selling 1/3 of my bank loan OEF position on the close. Ugly day for credit including for a change the floating rate ETFs. If I am wrong will buy back. If this is the beginning of a correction will sell more. Unlike in the past cash is no longer trash.
Edit. Make that 40%.<<<<<<<<
I try to post my exits before the fact and sold 40% before the close as shown from my post above. That ugly day for credit on the 21st was a harbinger for what was to come and the top for bank loans - at least so far. The leveraged loan index has been down almost every day since and sold more till I was all in cash. It hasn’t been pretty for bank loans. As with anything they go down a heck of a lot quicker than they go up.

@MikeM : Main point , after many years in the wrong category it went from 1* to 3* !
I'm not complaining as I do own a small slice of RPHYX.
I see Buffalo kicked the snot out of Miami ! Maybe , just maybe it's their year to take the Lombardi trophy home ?!
A star is just a star, Derf

Forgot to mention, now THREE STAR !!!

@Derf, 3 stars is a comparison to the rest of the high yield category, which has had a great year but is as risky a bond category as there is. The low volatility RPHYX is definitely mis-categorized, but M* has to put it somewhere.
RPHYX has a total return of 5.3% in the past year. My memory isn't great, but I don't think anyone was buying 1 year CD's at 5.3% last October.

@BenWP, prosecutors had asked for 40,562 years. That is about 20 years per victim, and there were 2,027+ known.
Judge showed leniency and REDUCED that to 11,196 years.
Turkish judges have become wild with sentences after the death penalty was eliminated.

I can see a sentence of 11,000 years, but the 196/7 years tacked on seems really excessive. Have a heart, Your Honor!

@hank- Maybe change the title head from 1.5% to ~ 5% ?

The Wall Street Journal (10/03/2023) reports:

While the generation born in the 1980s and 1990s has lagged behind prior generations when it comes to homeownership and earnings, new data suggests they are saving more for retirement. By the time older millennials now earning a median salary reach retirement, Vanguard estimates, they will be able to replace almost 60% of their preretirement income with Social Security and savings from sources including their 401(k)s and individual retirement accounts.
Gen Xers and the youngest baby boomers with median earnings are, by contrast, likely to replace about half of their paychecks in retirement. ("Millennials on Better Track for Retirement Than Boomers and Gen X")

The reason they give is at employers now automatically enroll new employees in a 401(k) with a default target-date fund. The plans are often crappy and overpriced, but a mile better than the previous plan: let them figure it out on their own.
Three quick notes:
1. "better" is still not "good" - the same Vanguard study estimates at the median income should target replacing 83% of their pre-retirement income with investments + Social Security.
2. relatively few can anticipate the life path that we or our parents had: home ownership is out of reach in and around the megacities, though remarkably affordable in likely "climate havens" in the Upper Midwest, around the Great Lakes ex-Chicago, and parts of New England, and half of young folks in their 20s are living at home with their parents.

I grew up in a multi-generational home - nine of us, representing three generations, shared the same 900 square foot, 1890s brick house for a long time - so "living with family" isn't something I see as automatically negative.

3. if anyone cared to notice, this might go down in Augustana history as "Snowball's good deed." Ten or 15 years ago I was called upon to help rebuild the college's retirement plan, which had a generous employer contribution (10% of base salary) but almost no employee contributions. We also had over 1200 fund and annuity options. Depending on the department (faculty, facilities, admin, food services ...), participation was in the low teens as a percentage of eligible folks contributing and the average contribution was around 3% a year.
I helped engineer four moves: a far smaller array of fund choices, automatic enrollment in the plan, automatic escalation of the employee's contribution from 6% (year one) to 10% (year five and beyond, unless the opted out) and a shift in the college's contribution from a straight percentage to a 5% guaranteed contribution plus up to 6% more in a matching contribution.
When I last checked, we had something like 94% participation and an average contribution around 9%.
Which no one but you knows.
Cheers!

Here's a good piece from the Sept. 8 (online) or Sept 9 (print, p. B2) edition of the WSJ:
https://www.wsj.com/personal-finance/taxes/bonds-bond-funds-state-taxes-cd066239

[Per SC] [T]he Constitution prohibits the states from taxing federal debt. But the prohibition provides blanket relief only for interest on Treasury securities, including savings bonds.
[Per ICI tax attorney] Congress decides when setting up an agency whether its bonds will be state-tax free ...
Aside from Treasury debt, state-tax free bonds include those from agencies such as the Federal Farm Credit Banks, Federal Home Loan Banks, Sallie Mae and the Tennessee Valley Authority. Yet interest on mortgage bonds from Ginnie Mae, Fannie Mae and Freddie Mac is subject to state taxes.

See also Raymond James table on which GSEs are exempt:
https://www.raymondjames.com/wealth-management/advice-products-and-services/investment-solutions/fixed-income/taxable-bonds/government-sponsored-enterprise-debt-securities
Regarding the original question: Treasury obligations held within MMFs are state exempt, but the fund's income exemption is prorated by the fraction of interest coming from exempt debt. Even Treasury Only MMFs may generate some small amount of state-taxable income. For example, last year (2022) FDLXX was only 93.63% exempt.
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/taxes/Revised-GSE-(SA-AA)-Letter.pdf
Should a "not only" Treasury fund be less than 50% exempt, then a few states will tax 100% of the income. (See '*' footnote in linked Fidelity statement above.)

I am seeing Twitter reports of 30-yr crossing 5%. But I don't see it yet on StockCharts, probably delayed 15-20 min.
In this LIVE chart, 10-yr is the main chart, then bottom panels show 3-mo, 5-yr, 30-yr.
https://stockcharts.com/h-sc/ui?s=$TNX&amp;p=D&amp;b=5&amp;g=0&amp;id=p71470181543
Edit/Add. That was for overnight 30-yr futures. Let us wait for it in the normal trading hours. Twitter LINK

Broadly speaking, artificial intelligence (AI) is simply the application of computer software to human thinking. It has been around formally at least since 1950s. It has had its ups and down cycles (note plural). Universities have had AI Labs since 1960s. Of course, new chatbots since Fall 2022 have gone much beyond old fun and games with AI. Now EVERYBODY knows and talks about AI. And no surprise that they find that they have already been using AI.

Direct obligations of the US Government are excluded from state/local taxes.
Indirect obligations are NOT exempt. So, excludes are Treasury repos, GSEs (GNMA, Fannie Mae, Freddie Mac, etc).
US Savings Bonds are also NOT exempt.
The difference between Treasury MMF and Treasury-only MMF is that the former rely heavily on Treasury repos - so a bit higher rate but less state tax exemption (that may be fine for low/no tax states).
www.ncdor.gov/interest-income-us-obligations
tax.illinois.gov/content/dam/soi/en/web/tax/research/publications/pubs/documents/pub-101.pdf
www.irs.gov/taxtopics/tc403

@ Crash,

as of September 9th, @junkster said ,
I trade only bond funds because of their persistency of trend combined with their lack of volatility. There are exceptions, but since 2000 there has always been a bond category that has beaten the S@P annually. Of course those exceptions are pretty glaring ala 2013, 2017, 2019, 2021, and so far this year. So with an extra $100,000 would just add it to the bond category that is far ahead of the bond pack this year. That would be bank loans/floating rate which I have mentioned previously, Some are already ahead double digits YTD. Aside of March they have been as steady a trender as you could want. They are massively overbought, ripe for a correction, and with fears of rising defaults. But, ( and I have to continually remind myself of this) overbought in Bondland can stay overbought for long periods of time. Then again, this wouldn’t be an investment just a trade. Investment is a foreign term to me. I think the only time I was ever in a position since the 1990s for more than four to six months was in IOFIX in 2020/2021.

https://mutualfundobserver.com/discuss/discussion/61478/how-would-you-invest-100-000-right-now/p2
Also he mentioned few weeks later that he sold 1/3 of bank loan/ floating rate bond.
The quick rise rise of 10 year treasury yield has impact all bonds. I notice the short term junk bonds have peaked and falling too this week. YTD they were the few pockets of bonds that were up high single digit return. High yield corporate bonds such as TUHYX did well YTD and they also started falling last week. Is this déjà vu again of the brutal 2022 among bonds?
So what are your plan?

The longer end of yield curve is moving up since September. Today, the 10 year treasury yield rises to 4.81% from 3.79% as of 1/3/2023. Bonds got crush...
Bought 6 months and 12 months treasuries this week as other T bills matured. Will watch on the sideline on stocks.

Make Me Smart did a good show today, Tuesday, 10/3, centered entirely on cryptocurrency and the SBF trial. They had a long interview with Zeke Faux, a Bloomberg reporter who's spent two years trying to track crypto and author of the new book, Number Go Up: Inside Crypto’s Wild Rise and Staggering Fall (Sept 2023).
The short version: cryptocurrency is speculation, pure and simple. It's a form of gambling, and the casinos are almost all crooked or scammy. They have no demonstrated utility beyond what your Visa card provides.
As of this evening, 110 cryptocurrencies (of 230 tracked by CoinDesk) are underwater of the trailing 12 months. Six coins are down by more than 75%, one year after "the great housecleaning." In 2022, the crypto market went from $3 trillion to $800 billion, representing the disappearance of 74% of its investors' gains. Dozens of exchanges collapsed. (The founder of one failed Turkish exchange, Faruk Fatih Özer, was just sentenced to 11,196 years in jail for his activities.)
One side note was that the African-American community has been especially victimized by crypto marketers promising them the ability to build "generational wealth" that will bequeath a better life to their kids and grandkids.
The second side note is that most of the crypto bros are praying that SBF receives a sentence of at least 11,197 years since that allows them to dismiss him as "the one bad apple" and relaunch their hype-train.
- - - - -
All of which becomes pressing because fund advisers are piled like the bulls of Pamplona, ready for a wild charge. Starting in August I saw new crypto fund and ETF filings almost daily, with as many at a half dozen new funds filed in a single day. Hedged, leveraged, unhedged, inverse, one currency, multi-currency ... it's all in the queue and the marketing push is going to be deafening.
If they get by the SEC.
The show is, I think, worth the listen for folks trying to keep up. It's non-technical and smart, with two hosts who are just slightly appalled.

https://www.sec.gov/Archives/edgar/data/803020/000101376223000917/ea162996_497.htm
497 1 ea162996_497.htm 497
THE OBERWEIS FUNDS
OBERWEIS INTERNATIONAL OPPORTUNITIES INSTITUTIONAL FUND
SUPPLEMENT DATED OCTOBER 3, 2023
TO THE PROSPECTUS, SUMMARY PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION DATED MAY 1, 2023, AS SUPPLEMENTED
On October 2, 2023, the Board of Trustees of The Oberweis Funds (the “Trust”) approved an Agreement and Plan of Reorganization (the “Plan”) by the Trust on behalf of the Oberweis International Opportunities Fund (the “Acquiring Fund”) and the Oberweis International Opportunities Institutional Fund (the “Fund”).
The Plan provides for the transfer of all of the assets and the assumption of all of the liabilities of the Fund solely in exchange for Institutional Class shares of the Acquiring Fund. The Acquiring Fund shares received by the Fund would then be distributed to its shareholders as part of the Fund’s liquidation provided for in the Plan. (The transaction contemplated by the Plan is referred to as the “Merger.”)
The Merger can be consummated only if, among other things, it is approved by shareholders of the Fund. A Special Meeting (the “Meeting”) of the shareholders of the Fund will be held on December 21, 2023 and shareholders will be given the opportunity to vote on the Plan at that time. In connection with the Meeting, the Fund will deliver to shareholders a Proxy Statement/Prospectus describing in detail the Merger and the Board’s considerations in recommending that shareholders approve the Merger.
If the Plan is approved at the Meeting and certain conditions required by the Plan are satisfied, the Merger is expected to become effective on or about December 22, 2023.
In anticipation of the Merger, the Fund is closed to purchases as of the close of business on December 20, 2023. Shareholders of the Fund may continue to redeem their shares until the date of the Merger and any shares redeemed will not be subject to a redemption fee.
This supplement is not a solicitation of any proxy.
October 3, 2023
THE OBERWEIS FUNDS
3333 Warrenville Road, Suite 500
Lisle, Illinois 60532
1-800-245-7311

That was an interesting day. FINALLY some volatility.
Started small positions in FSMEX (an oldie but goody) and DIVO.
Added to SCHD, JEPI, FUTY (ended +1%), FMIL, FNILX, FMSDX, FPHAX, etc.
Inverted yield curves pointing to a recession? meh. Perhaps "this time will be different".