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".

“As of Dec 31, the best rate on a CD in the 10-12 month timeframe may have been 4.90% APY for a 10 month term.
https://web.archive.org/web/20221222065208/https://www.depositaccounts.com/cd/1-year-cd-rates.html
That comes out to about 3.653% yield (not annualized) through Sept 30th. On the plus side, FDIC coverage. On the minus side, early withdrawal penalty and all or nothing withdrawal (i.e. very limited liquidity). “
Thanks for the number crunching @msf. Always interesting to compare one’s diversified investment portfolio’s performance with a straight-up cash approach. (As you point out, the risks are not commensurate.) Cash will always beat out (well … almost always) a broadly diversified approach during a down equity market. Even with a 0% yield, cash would have handily beaten most diversified portfolios last year.

As of Dec 31, the best rate on a CD in the 10-12 month timeframe may have been 4.90% APY for a 10 month term.
https://web.archive.org/web/20221222065208/https://www.depositaccounts.com/cd/1-year-cd-rates.html
That comes out to about 3.653% yield (not annualized) through Sept 30th. On the plus side, FDIC coverage. On the minus side, early withdrawal penalty and all or nothing withdrawal (i.e. very limited liquidity).
Fidelity was only offering 4.55%-4.60% APY (vs. 4.90%) on CDs between 9 and 12 months.
https://web.archive.org/web/20221231183954/https://fixedincome.fidelity.com/ftgw/fi/FILanding
My momma told me ...

... you'd better shop around.

YTD
RPHIX +3.53% (ST-HY) 10/2/23 (edit/add: also, 10/3/23)
USFR +3.93% (Ultra-ST)
ICSH +3.90% (Ultra-ST)
IEF -4.19% (T-Notes 7-10 yrs)

focus only on bonds that are very close to maturity
That seems a bit excessive. Even MMFs can have debt that doesn't mature for 397 days. One only needs enough liquidity to meet redemptions. The SEC is increasing liquidity requirements for MMFs from 10% to 25% for daily liquidity and from 30% to 50% for weekly liquidity. MMFs are not entirely liquid; they don't have to be.
https://www.federalregister.gov/d/2023-15124/p-453
Average effective maturity of RPHYX is around 5 months. This is significantly longer than MMFs. I'm not suggesting otherwise, just that the portfolio has adequate assets close enough to maturity to address concerns. Probably :-)
FWIW, ZEOIX has an "average life" of 2.34 years. Quite a difference.
https://riverparkfunds.com/assets/pdfs/rpsthyf/RiverPark_Short_Term_High_Yield_Fund_Fact_Sheet.pdf
https://www.osterweis.com/mutual_funds/short_duration_credit/portfolio
RPHIX has an additional out - it can reopen the fund. Currently it is soft closed - a new investor can open an account only directly with the fund.

I cited the requirement above - 5% net redemptions and liquidity costs above 1 basis point.
There is another set of rules for discretionary redemption fees. These may be imposed only if the fund board deems the fee to be in the best interest of the fund. Which fund sponsor is going to be first to say that it is in the best interest of a fund to impose a redemption fee?
Once the sponsor does that, its MM fund business is shot - not just the fund in question but its whole stable. On reputation, even if the short term decision is correct.

Those "certain money market funds" are institutional funds. This is in lieu of the earlier swing pricing proposal.

institutional prime and institutional tax-exempt money market funds will be subject to a mandatory liquidity fee when net redemptions exceed 5% of net assets. Funds will not be required to impose this fee, however, when liquidity costs are less than one basis point, which we anticipate will often be the case under normal market conditions.

https://www.federalregister.gov/d/2023-15124/p-224
Unlike the removal of the old gating/fee requirement (which must have been done by Oct 2), the "compliance date for the mandatory liquidity fee framework [] is twelve months after the effective date (Oct 2) of the final amendments."
https://www.federalregister.gov/d/2023-15124/p-840
Right now, gates are ended, the old redemption fees are ended, and any new liquidity fees are yet to be implemented.
If we're looking at the future, I'm more concerned with the increase in the liquid asset requirement from 10% to 25% (daily liquidity) and from 30% to 50% (weekly liquidity).
https://www.federalregister.gov/d/2023-15124/p-453
That could make any future redemption fees moot, but also reduce the yield of MMFs. That will take effect six months from now.
https://www.federalregister.gov/d/2023-15124/p-848

When the SEC divided MMFs into "government", "retail", and "institutional", it added gating requirements to prevent or slow down possible runs on MMFs. Good thought, poor design. AFAIK, no fund ever actually imposed these restrictions, though they updated their prospectuses to allow them.
As of Oct 2, funds are no longer allowed to even suggest they might do this. They are required to:

remove the ability for a fund board to temporarily suspend redemptions if the fund's liquidity falls below a threshold. In addition, the [SEC regulation] amendments will remove the tie between liquidity thresholds and the potential imposition of liquidity fees."

Final Rule
For example, from Schwab:
"As of October 2, 2023, the prospectuses for the Schwab Money Funds were updated to remove language tied to redemption gates, thresholds, and liquidity fees."
I've sent a note to Fidelity, as it has not updated its prospectuses. Pragmatically, this doesn't make a difference. However, its legal department seems out to lunch. I'll see what response I get.

“@carew388 also had it right back in March ”
Thanks @MikeM
Was just responding to the last poster on the thread who happened to be Sven. Probably several got it right. I didn’t. Never saw 10-year rates reaching near 5% in less than 3 years.
To @Seven’s above point … The Fed was keeping rates artificially low by its massive bond buying - a form of manipulation to use @Sven’s words. And, @Sven saw inflation back than. I’m not sure the Fed had figured that part out yet.

Here is the link to the most recent shareholder letter:
https://www.osterweis.com/files/Osterweis_Prospectus_2023.pdf
https://www.sec.gov/Archives/edgar/data/811030/000089418923007341/osterweis497eliquidation9-.htm

bonds are higher up than stocks in terms of principal protection
This sort of principal protection concerns bankruptcy. When a company goes bust, whatever assets it has go first toward paying off debt (bond holders). If the company has anything left over (i.e. if it's net value is positive), the remainder goes to stock holders.

There's also income protection - bond holders get paid interest (if possible); only if there is money left do stockholders get paid divs.
TFCVX (Focused Credit Fund) owners were hurt when it was forced into fire sales because people wanted to redeem shares and the mostly illiquid bond assets could not be sold except at huge discounts.

Liquidity Risk. Liquidity risk exists when particular investments are difficult to sell. The Fund may not be able to sell these investments at the best prices or at the value the Fund places on them. Investments in private debt instruments, restricted securities, and securities having substantial market and/or credit risk may involve greater liquidity risk.

Summary Prospectus, 2014
Nevertheless, it ultimately had an 85% recovery rate. This was helped by closing down redemptions to allow it to sell off assets gradually at better prices.
https://focusedcreditfund.com/
https://www.morningstar.com/funds/third-avenue-focused-credit-abruptly-shuttered
M* didn't help: ZEOIX AUM $73.5 million, M* 1*; Negative
M* groups RPHYX and ZEOIX, two short term HY funds, with "regular" (intermediate/long term) HY funds. That results in lower star ratings than they deserve and a negative medalist rating. But that doesn't seem to have hurt RPHYX.
ZEOIX always had risk. @dtconroe noted in Jan 2020 that "in the toughest downmarket for the 2 funds (2015/2016), RPHYX showed almost no dip, compared to a slight dip for ZEOIX". That was posted just before this greater risk was dramatically brought home. Between Feb 21, 2020 and March 24, 2020, ZEOIX lost 14.1% vs. a 2.8% loss by RPHYX. (JNK dropped 21.1%).
Still, it wasn't until 4Q 2022 that assets left in droves (from M*'s ZEOIX performance page). Not because the fund underperformed its category (top quartile for the year, per M*). Perhaps because that's when the fund was sold to Osterweis.

Time to update this thread - Current yield on the U.S. 10-Year Treasury is 4.756%.
(Looks like @Sven had it about right.)

Accounts at financial institutions are considered to be inactive if there has been no activity (aside from automatic divs/interest/CD renewals) for some period of time, often 12 months.
The institution continues to hold your assets, though it may "close" the account, or it may prohibit all transactions (including cashing checks), or it may simply start charging inactivity fees. (Vanguard does not charge inactivity fees.)
There is some confusion about the term "dormancy". Some institutions say that an inactive account is "dormant". That is how Vanguard is using the term according to your post. Others wait until the next phase (below) before calling the account dormant.
A financial institution is required to turn over ("escheat") account assets to your state after some longer period of time. Depending on the state, this is three years or longer. Some institutions say that this is when an account becomes "dormant". Vanguard uses "dormancy" this way in its prospectuses, e.g. for VMFXX:

Dormant Accounts
If your account has no activity in it for a period of time, Vanguard may be
required to transfer [escheat] it to a state under the state’s abandoned property law,
subject to potential federal or state withholding taxes.

https://personal.vanguard.com/pub/Pdf/p030.pdf?2210171184
Until the assets escheat, you can recover inactive account assets by notifying the institution (Vanguard) that you are still alive, still interested in the assets, and go about reactivating the account (or possibly opening a new account).
Note that the rules are more forgiving for retirement accounts. It's a mess that I'm not going to sift through now.
https://news.bloombergtax.com/daily-tax-report/faqs-on-unclaimed-property-aspects-of-retirement-assets
Once burned, twice shy. Wells Fargo did this to me several years ago. Ever since then I've kept a log of the last time I contacted the institution (and what constitutes "contact") or conducted a transaction. When it gets close to a year (even if the institution says it doesn't care about inactivity, just escheatment), I will contact the institution. Or make a $5 deposit, or something.

Not that I'd be interested, but given current market conditions and trends, I would be hesitant to buy into any 'newfangled' retail-oriented vehicle. Usually when such things are rolled out, the markets generally roll over hard and early-investors buying into it while still riding their trading high will get sucker-punched soon after purchase...which kind of echoes what staycalm said about trend-chasing, perhaps.
MSF: I agree that 1.25+./85 fee + 6% expenses is high, but still looks better than the 2-and-20 model most hedge funds charge their deep-pocketed pigeons. That said, there's still a front-end load of up to 3.5% on Class S (retail) shares which is an added expense if purchased through "certain financial intermediaries."
*munches popcorn and watches*

Osterweis bought the ESG-oriented firm Zeo in October 2022 just when the tide was turning against the ESG. Closing is surprising as Osterweis could easily fold small AUMs them into its existing funds; but the people brought along with the acquisition may not have agreed to that. M* didn't help: ZEOIX AUM $73.5 million, M* 1*, Negative; ZSRIX AUM $3.8 million, M* 3*, Negative.
https://www.businesswire.com/news/home/20221011005063/en/Osterweis-to-Include-ESG-Integrated-Fixed-Income-Strategies-in-Product-Suite