@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.

@Sven, not a bad proxy as I use it intraday along with two other bank loan ETFs. But I also use it with the previous day’s NAV to get an idea on how the open end will be priced end of day. I also use the end of the day Morningstar LSTA US Leveraged Loan 100 Index. That index peaked on September 20. It is only down around 0.65% from the top but a far cry from the trend of up, up, and up since the end of May. I could reload on bank loans if they approach the highs but in no hurry. There are some problems out there like banks and the junk corporate bond market. If the latter finally gets hit that could usher in all sorts of credit issues.

Games people play with defaults/bankruptcy, Twitter LINK
"When a large player like Brookfield defaults on a $300M office loan they just hand the keys to the bank...
The bank then has two options:
1. Sell the property at a significant discount (let's say $200M)
2. Add value to the property themselves then sell it
Most banks choose option 1
But how many buyers do you think are out there for distressed $200M office buildings?
Not many. Enter Brookfield again...
Yes, companies like Brookfield will default on a loan (with no recourse), hand back the keys, then buy the same asset back for a huge discount.
Pretty crazy if you ask me."

AAII Sentiment Survey, 10/4/23
BEARISH remained the top sentiment (41.6%; high) & neutral became the bottom sentiment (28.3%; below average); bullish became the middle sentiment (30.1%; below average); Bull-Bear Spread was -11.5% (low). Investor concerns: Budget; inflation; economy; the Fed; dollar; crypto regulations; market volatility (VIX, VXN, MOVE); Russia-Ukraine war (84+ weeks, 2/24/22-now); geopolitical. For the Survey week (Th-Wed), stocks were mixed (cyclicals down, growth up), bonds down, oil down sharply, gold down, dollar up. Long-term rates rose dramatically with 10-yr & 30-yr yields approaching 5%. More DC drama. #AAII #Sentiment #Markets
https://ybbpersonalfinance.proboards.com/post/1202/thread

@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.

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 ... :)

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.

@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&p=D&b=5&g=0&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.

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

“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.

Devesh and I, separately, chose to think through the implications of "higher for longer" as a Fed mantra.
Lynn began poking at the new TRP Capital Appreciation ETF and wrote a really nice reflection on Retirement: Year One.
I made some portfolio shifts, which is rare for me. I cut Matthews Asian Growth & Income (MACSX) after a long time. I booked a substantial gain, but mostly in the early years of the holding. What ultimately got me to act was reading the fund's own webpage (their pretty straightforward in reporting performance) and the apparent turmoil / turnover at Matthews. It strikes me as hard to do your job when other people are losing theirs. I added Leuthold Core (LCORX), because I don't have the energy just now to worry about how to reallocate assets when the picture (goodbye, Speaker McCarthy) changes daily. And I had already added RiverPark Strategic Income, which I'd written about this summer in tandem with Osterweis Strategic Income. OSTIX is leading in absolute returns but has more short-term volatility, and I'm just not into that. It's up 5.9% YTD / 5.8% APR over three years.
All of which moves me back closer to my "neutral" position of 50/50 stocks/bonds-cash-alts.

The 20y is a pretty interesting outlier at 5%. Bought at that rate, could be a future cap gain opportunity.

I doubt if I will live 20 more years, but it’s good to be optimistic.

20y is almost for sure past my expiry date, but I wouldn't be buying it to hold to maturity. That's what I meant by a capital gain opp. I doubt I'll buy in, tho, unless it moves even higher.

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)