https://www.sec.gov/Archives/edgar/data/916006/000168035922000198/brdgwyomnitmsmcap49710312022.htm
497 1 brdgwyomnitmsmcap49710312022.htm
BRIDGEWAY FUNDS, INC.
Omni Tax-Managed Small-Cap Value Fund (BOTSX)
Supplement dated October 31, 2022
to the Prospectus and Statement of Additional Information dated October 31, 2022
At a meeting of the Board of Directors (the “Board”) of Bridgeway Funds, Inc. (“Bridgeway Funds”) held on August 25, 2022 (the “Meeting”), the Board unanimously approved an Agreement and Plan of Reorganization (the “Plan”), providing for the reorganization of the Omni Tax-Managed Small-Cap Value Fund that would consist of: (i) the transfer of all of the property, assets, and goodwill of the Omni Tax-Managed Small-Cap Value Fund for shares of the EA Bridgeway Omni Small-Cap Value ETF (the “Omni Small-Cap Value ETF”), a newly-organized series of the EA Series Trust, and (ii) the distribution of the Omni Small-Cap Value ETF shares to Omni Tax-Managed Small-Cap Value Fund shareholders in complete liquidation of the Omni Tax-Managed Small-Cap Value Fund (when completed, the “Reorganization”). The Board determined that the Plan and Reorganization would be in the best interests of the Omni Tax-Managed Small-Cap Value Fund and its shareholders. The effect of the Plan and Reorganization will be that the Omni Tax-Managed Small-Cap Value Fund’s shareholders would become shareholders of the Omni Small-Cap Value ETF. The Omni Small-Cap Value ETF will be managed in a substantially similar manner as the Omni Tax-Managed Small-Cap Value Fund, and the Omni Small-Cap Value ETF’s investment objective, principal investment strategies, and portfolio management team will be the same as that of the Omni Tax-Managed Small-Cap Value Fund.
The Plan will require the approval of the shareholders of the Omni Tax-Managed Small-Cap Value Fund. A special meeting of the shareholders of the Omni Tax-Managed Small-Cap Value Fund is being called for that purpose. Shareholders of the Omni Tax-Managed Small-Cap Value Fund will receive proxy solicitation materials providing them with information about the Omni Small-Cap Value ETF, the Plan, the Reorganization, and potential benefits to Omni Tax-Managed Small-Cap Value Fund shareholders. If approved by shareholders of the Omni Tax-Managed Small-Cap Value Fund, the Reorganization is expected to take effect during the first quarter of 2023 (or such other time as permitted by the Plan). It is anticipated that the Reorganization will qualify as a tax-free reorganization for federal income tax purposes and that shareholders will not recognize any gain except as indicated in the next sentence. If the Reorganization is approved by Omni Tax-Managed Small-Cap Value Fund shareholders, any fractional shares held by shareholders will be redeemed, and the Omni Tax-Managed Small-Cap Value Fund will distribute the redemption proceeds to those shareholders, which may be a taxable event, and such shareholders are encouraged to consult their tax advisors to determine the effect of any such redemption. Share purchases of the Omni Tax-Managed Small-Cap Value Fund may no longer be permitted approximately one week prior to the Reorganization. Investors should check the Bridgeway Funds’ website (bridgewayfunds.com) for further information.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

@msf- sleeping dogs and all that stuff... :)

Yeah, I know, and I thought about it. But this strikes me as that rare, real win-win situation.
Contrast it with something like NTF (aka "free") fund transactions. When NTF trades were introduced, we were told that it was a win-win. Fund companies had significant account servicing costs. Brokerages were designed to provide those same services for less (economies of scale, core business, etc.). So the fund companies would make more money by outsourcing and investors would get more convenience.
That was likely true decades ago, with paper statements, paper application forms, paper checks, etc. But as servicing got cheaper and as the brokerages raised their fees (I think they started at 25 basis points and are now around 40 basis points), this became a big win for brokerages and a loss for investors.
Or contrast with "money back" annuities. These are annuities where, after so many years, if you don't annuitize you get your initial investment returned. "Free"? Hardly. You're paying with opportunity cost over many years.
With CDs, one can reasonably argue that buying through a brokerage is a win-win. You do effectively give up the ability to redeem early, but there are also some CDs sold at banks that are even more restricted. They don't permit early redemption, period. That's even worse than the brokered CDs, which at least purport to have a secondary market.

It is a different channel with different pricing/promos. Brokerage CDs are expensive (when you factor in invisible platform fees of 0.35-0.50%; your quotes are net) but fast way to raise deposits. Many lesser known banks use them and the FDIC and the Fed keep an eye on who is topping these lists repeatedly.

@Observant1

Expanded state control of the economy may lead to unsatisfactory investor outcomes.

This is indeed why the market has sold off. The question for the value investor is at what point are the risks of expanded state control "priced in" to securities? Or should investors assume there is no suitable price for that risk? It is a vital question. Consider if the historical average price-earnings ratio of U.S. stocks is 15 while these Chinese stocks now have a 5 p-e. If the expanded state control reduces potential return on equity, the question is by how much? Let's say you assume that Chinese stocks should trade at a 1/3rd or 33% discount to U.S. ones because of Xi's recent behavior and expanded state control. That would mean a 10 p-e or a 100% gain from here when the dust settles. (Of course, this is just a rough calculation as stocks could get to that 10 p-e by the "e" part falling instead of the "p" rising. But even if you assume half of each, a 50% gain.) By contrast, if you think, that's it, the end of capitalism in China altogether--no price is worth paying.

I picked out 5 representative samples to plot,
https://stockcharts.com/h-perf/ui?s=IEF&compare=AGG,HYG,LQD,TIP&id=p78281312714
However, the CME FedWatch, based on the fed fund futures market, shows 75, 50, 50 bps hikes ahead at Nov, Dec, Feb FOMC to 4.75-5.00% terminal fed fund rate, then pause. IMO, the Fed pivot/pause/wait-and-see language may start to creep into the FOMC Statements and/or Powell's pressers.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
The bond market volatility ^MOVE is also quite high now; the stock volatility ^VIX not so much.
https://finance.yahoo.com/quote/^MOVE?p=^MOVE&.tsrc=fin-srch

Well, to soon to know, eh? But a decent week for most bond types, relative to the past numerous months of bond prices falling. Monday and Friday found slightly higher yields, but the middle of the week found lower yields and, of course; higher pricing. The weekly positive price moves below are a substantial change from the trend.
@Junkster noted recently: "Regardless we have three major catalysts on the horizon that could answer if this time the bottom is really in. Next week’s Fed meeting/comments, next week’s October employment report, and maybe the real biggie, the election results week after next." This was in response to an equity thread post. I suggest the same applies to the path of bond prices. How long and hard will the FED push higher interest rates? Will they be able to stop when needed following lagging indicators about economic health? We and the markets continue to be impacted by global tensions, climate changes that are affecting crop production, perhaps push back against FED interest rate policy from U.S. politicians and business leaders and a U.S. dollar that remains strong globally. Lots of possibilities, eh?
Anyway, I continue to follow bond actions; in an ongoing attempt to identify any sustained trends.
Perhaps you may find the numbers of value for your investing thoughts/considerations going forward.
For the week, October 24- October 28, 2022

--- AGG = + 1.55% (I-Shares Core bond etf) widely used bond benchmark, (AAA-BBB holdings)
--- MINT = - .02% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = +.22% (UST 1-3 yr bills)
--- IEI = + .88% (UST 3-7 yr notes/bonds)
--- IEF = + 1.8% (UST 7-10 yr bonds)
--- TIP = + 1.2% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- STPZ = + ,22%(UST, short duration TIPs bonds, PIMCO)
--- LTPZ = + 4.1% (UST, long duration TIPs bonds, PIMCO)
--- TLT = + 3.9% (I shares 20+ Yr UST Bond
--- EDV = + 5.5% (UST Vanguard extended duration bonds)
--- ZROZ = + 6.2% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = - 7.6% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = + 11.3% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (effectively, about a 3x version of EDV etf)
--- BAGIX = + 1.57% (active managed, plain vanilla, high quality bond fund) FOR REFERENCE
***Other, for reference, not AAA rated:
--- HYG = + 2.8% (high yield bonds, proxy ETF)
--- LQD = + 2.4% (corp. bonds, various quality)
Remain curious,
Catch

Hi sir Mark
Lots long term investors still buying at these levels hope storm passes and hope gain/reap benefits w new future bull market
Take Facebook meta for instant, price so cheap now almost 60 70% downturns with this bear market, but the business model not so good presently especially with previous Er and many new competition platforms (YouTube tiktok Snapchat,l wechat Instagram etc). We added Facebook near 220 dollars per shares, may have to hold it for quite awhile and hope it is not another Aol in 3 6 yrs and hope return to previous midhighs 250s 280s per share.
May not be same scenarios if you keep buying Spy or iwm qqq

October 28th show

We have a new guest on WEALTHTRACK with a long and distinguished track record of investing in high-quality, dividend-paying stocks. She is Clare Hart, who Morningstar calls “one of the industry’s most impressive managers.”
Hart has been the Lead Portfolio Manager of two highly-rated funds since 2004.
Hart will discuss the benefits of focusing on quality and dividends, particularly in a difficult market environment.

Hi @michaelt
Regarding your reply and questions to Jim0445. He/she may not view this message thread again, to know you've written to he/she. However, if you place a @ symbol at their "name", as I have with you; they should receive an email notice, from your screen name here, directing them to this thread.
NOTE: I am not able to provide any additional actions that all of you have already taken. It seems all of you have discovered the paths you need to use for the authorities, etc.
The very best outcomes to all of you.
Regards,
Catch

“Taxation is the price we pay for civilization.” Oliver Wendell Holmes. According to fellow Supreme Court Justice Felix Frankfurter: “[Holmes] did not have a curmudgeon’s feelings about his own taxes. A secretary who exclaimed ‘Don’t you hate to pay taxes!’ was rebuked with the hot response, ‘No, young feller. I like to pay taxes. With them I buy civilization.”

Holmes was a better writer than that. We pay taxes, not taxation. His words, excerpted from the source, Compania General de Tabacos v. Collector, 275 U.S. 87 (1927), were "Taxes are what we pay for civilized society". Priceless (no mention of price).
https://quoteinvestigator.com/2012/04/13/taxes-civilize/
A phrase very similar to the familiar one is "taxation is the price which we pay for civilization". As Quote Investigator notes, this predates Holmes' dissent by 3/4 of a century. QI's citation for this 1852 writing is:

1852, Journal of the House of Representatives of the State of Vermont, October Session, 1851, Appendix: Report of the Committee Appointed by the Governor to Take into Consideration the Financial Affairs of the State, Start Page 368, Quote Page 369, Printed by Chauncey Goodrich, Burlington, Vermont. (Google Books full view) link

"The good news is America provides plenty of legal ways for people to avoid paying taxes, and the wealthier investors are, the more ways there are. "
I'm not sure that's good news. For this, I'll point to the Oracle of Omaha who said that he pays less (in percentage terms) than his secretary in taxes. Legal tax avoidance techniques available to the wealthier often result in regressive taxation.

Hi Jim0445 - do you have any steps you think we should pursue? If this happened to you, what would you do? All of us victims have contacted multiple authorities SEC, FBI etc....
What would you do if you were in our shoes?
Thank you! Teresa

@johnN - why would you hold something for 3-5yrs if you bought at the wrong price? I don't understand.

Morgan Stanley
https://www.morganstanley.com/im/publication/forms/tax/2022_estimated_year_end_distributions.pdf?1667045822725

i think the statistical measuring rods are just not showing RELEVANT data. Maybe they did, in days gone by. Before federal agencies re-defined stuff to make things look better than they actually are. It's all too mushy and opaque and convoluted. So THAT doesn't help anything, either.
*Edited to add: remember when it was GNP that was reported? Not GDP?

GDP curve doesn't look better (or worse) than GNP to these eyes.

Though zooming in on the past decade, one sees GDP slightly but clearly below GNP. Does the newer (lower) GDP figure make things look better than the older (higher) GNP figure?

Graph source: https://fred.stlouisfed.org/graph/?g=Vo1n

GDP measures the goods and services produced within the country's geographical borders, by both U.S. residents and residents of the rest of the world. GNP measures the goods and services produced by only U.S. residents, both domestically and abroad.

https://apps.bea.gov/scb/2021/03-march/0321-reprint-gnp.htm
"For more on the changeover from GNP to GDP, [the Bureau of Economic Analysis] present[s] a reprint of the August 1991 Survey article on the topic."

Stuff happens! But it wasn't a big mistake.
In the Treasury purchase section at brokerages, the Auction and Secondary clicks are clearly indicated.
It seems that unintentionally, you went into the Secondary section, and bought what you thought was a 26-wk T-Bill, but you bought this 52-wk T-Bill in the secondary market with 26-wks remaining,
https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/A_20220414_4.pdf
The correct purchase would have been this 26-wk T-Bill,
https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/A_20221013_3.pdf
Don't lose sleep over it.
If you are buying 13-wk, 26-wk and/or 52-wk T-Bills for auction on Monday (10/31/22)/Tuesday (11/1/22), just be careful. As the announcements came out on Thursday, brokerages can accept orders after Thursday (10/27/22). Of course, Treasury Direct is now shut for maintenance all of Saturday and Sunday (you cannot login, but these general links should open - or may not).
Bookmark this Treasury Auction Schedule,
https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf

Jim0445 your comment is not helpful at the moment. All the victims are conscious of their mistake. The private group is for victims of this scam to discuss the problems without public shaming.

Treasury rates EOD: 3-mo 4.18%, 6-mo 4.51%, 1-yr 4.55%; next auctions Monday/Tuesday.
https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202210

Month over month is what tells us the current inflation rate. Year over year tells us a lot about past inflation, not that much about current.
M-o-M for July was 0.0, August 0.1, and Sept. 0.4. Annualize those, and you get what the recent to current rates are ... nowhere near the year-over-year rate. But of course as prices, e.g., gasoline, fluctuate, those M-o-M figures are likely to vary, maybe quite a bit.
Apparently figures like those are how the Bloomberg Real Yield crew in mid-month managed to crow that real yield on IG debt, like their name, is back after a pretty long absence.
I'm still on the 6m T bandwagon; they're at 4.5% today with an auction coming up Monday. If 5% turns out to be the terminal Fed rate, as the RY guests lately have opined, there's still a runway prepped for higher CD and short-maturity T rates. I agree with dt that a roughly 6% peak on these safer investments is prob'ly a reasonable expectation. But if the Fed breaks something important before then, we might not make it there.

This is neither Treasuries nor CDs, but caught my eye:
3.5% high-yield ordinary online bank account with Salem Five Direct, the online branch of Salem Five. Branches all over eastern Massachusetts. Mutually owned, not publicly traded. Just a $10.00 minimum. (Salem, Massachusetts.)
https://www.salemfivedirect.com/

If inflation stays elevated and above the CD yield, you are still losing unless you own IBond.
Still it is nowhere near as bad when the bond index fund this year, -16% YTD. You are indeed doing very well to stay positive this year while many of us are not as lucky. The CD yield will climb as long as the ST rate continues to rise. Sometime next year it may get above 5-6% yield and it become very attractive to lock in at higher rates for several years. You can also consider a CD ladder would cover all the base.