I have copied a link to Kiplinger's presentation of ETF suggestions for the coming year. Several of the funds listed have had a least some mention on MFO. I was struck by the wide variety of funds discussed, many of which are very small and might well be considered speculative. Among the biggies are VOO, VYM, QUAL, and VDE; while some really small ones also make the list: DEEP and LRNZ are tiny. I have profitably owned the small-cap CALF, now at $400M AUM. PAVE gets a favorable write-up as do several other sector funds. Bond and income vehicles are well represented. The article takes a bit of a shotgun approach that may reflect the diversity of the ETF universe and the writer's desire to cover a lot of bases. Fortunately it's an article which can be read via scrolling as opposed to many K articles that require searching for a "next" button among the ads.
https://www.kiplinger.com/investing/etfs/603977/the-22-best-etfs-to-buy-for-a-prosperous-2022?rmrecid=1884004435&utm_medium=email

I read a recent article stating that $50 mil AUM is considered a minimum level for an ETF to be sustainable longer term and suggesting many newer ones may need to close in a few years if they can’t garner that level. I recently bought some of Invesco’s PSMM (actively managed fund-of-funds) costing .33% - including accrued expenses of the underlying funds. Not looking for criticism or affirmation of the choice. Just tossed it out as an example of what’s available at what cost. The fund only has around $20 mil AUM at last look - but appears to be growing steadily.
FWIW - While .33% is still higher than others, it’s about half the cost of PRSIX - an actively managed mutual fund at T. Rowe with a similar 40/60 allocation.

I am disappointed by the high ERs of the new active ETFs. I don't want an active ETF at 60-80% of the ER of its OEF cousin, but I want it at more like 25-35%. That may happen when some disruptors enter this market (who?).
Remember that is what happened to factor ETFs when Goldman Sachs/GS ruined the gravy train for everybody. Now GS isn't your typical low-cost leader, but when it entered the factor ETFs, it did it with a splash that was heard across the industry.

Actively managed ETFs have lower expense ratios and broader distribution than similar OEFs.
Fund firms launched active ETFs in an attempt to better compete against (gain AUM) passive ETFs.
There were 2,688 ETFs available to U.S. investors as of Nov. 24, 2021.
However, the largest 100 ETFs accounted for nearly 70% of the $7T total invested in ETFs.
This year, Vanguard Total Stock Market (VTI) received $40B of net inflows through Nov. which
constituted 5% of all ETF inflows.

I believe that 2022 will end higher than 2021 concludes, but it certainly won't be a smooth ride. It should be volatile during the first half of the year particularly.
With only a few exceptions, none of my year-end OEF distributions were reinvested. In early January I plan to trim 25% from a few individual stocks which ran up nicely the past 2 or 3 years. I plan to put the sum of these dollars into NVHAX, FRA and FRFZX, and then when the FED moves and the market vomits in response, I'll move that into a few holdings geared towards increasing my dividend income to include RQI, BME, EVT, DIVO, FLC, JPS and possibly ETNHX to make up for a down 2021. Other than floaters and preferreds, I have no conventional bond funds.

It’s nice not to be paying a 4%+ front load as I was with Templeton thru our only workplace option in the 70s. We accepted that as normal. Indeed, we were assured that the same fund(s) if purchased outside our privileged workplace plan would have cost us something like 7% in front-end fees.
The rapid growth of ETFs I guess is passé by now. But the advent of actively managed ETFs adds a new wrinkle - and perhaps complicates the cost analysis factor. I’d guess actively managed ETFs cost less on average less than their mutual fund cousins and can’t help wondering whether the added expense of mutual funds is justified.

From latest Barron’s -
“We're closing out another banner year for the fund industry, which has seen record asset flows …
Exchange-traded funds continued their momentum, gathering more than $900 billion of new money with two weeks left in the year, crushing last year's record of $500 billion in net inflows. Nearly 450 new ETFs were launched this past year …
“The ETF industry has grown to $7 trillion—still smaller than the $20 trillion in mutual funds, but the catchup seems inevitable. This year, we saw the first-ever conversion from mutual fund to ETF—first from Guinness Atkinson and Dimensional Fund Advisors, followed by JPMorgan and Franklin Templeton announcing similar plans for 2022. Yet in at least one way, the ETF industry is looking more and more like the mutual fund industry: It is embracing active management.”
“What the Future Holds for ETFs” / By Evie Liu
Barron’s - December 27, 2021

What Type Of Retirement Spender Will You Be?

One final study should be considered to help shed light on retirement spending patterns and which default assumptions could be appropriate for different types of retirees. In August 2015, J.P. Morgan Asset Management released a study about retirement spending by Katherine Roy and Sharon Carson.
Their dataset provides a “big data” analysis of 613,000 U.S. households led by people fifty-five or older who were estimated by the researchers to have managed most of their household finances through banking services at Chase (debit and credit cards, pay mortgages through bank account, etc.).
In analyzing the expenditures for their diverse consumer base, they identified four retirement spending profiles and an additional category of miscellaneous individuals. These are the profiles they found

https://retirementresearcher.com/type-retirement-spender-will/

We will focus more on the balanced fund bucket in 2022 since we had hard time with our bonds this year. In order to fight inflation, the Fed has announced tapering in early 2022 following by several (3) rate hike from 0.25% short term rate. Which asset classes will do well in rising rate environment?
This year we are fortunate to have a modest gain above the inflation rate, and that is good enough for us. The balanced funds we used as a lower risk approach have provided steady gain throughout the year and would like to expand further globally. Several defensive ETFs as tactical allocation including health care, REIT, and energy have paid off. Rotation from growth to value domestic and international funds have been worked well. Our small alternatives and gold positions did not contribute much but that is okay. The main challenage we had is bonds - high quality government and corporate bonds lagged badly to those of junk bonds. So we will rely on the balanced fund managers to pick the bonds instead.

As a disclaimer, I currently have a very moderate position in COTZX and appreciate the clear mechanics of adjusting to market conditions based on S&P levels. Still, I am challenged to add to it for the following reasons and considering selling it, so maybe someone could talk me off the roof. [...]
Second, six of the funds 13 funds are invested in 1.56% or less. So the impact from these funds is either offset by each, negligible, or cumulatively indexing. [...]
Fourth, the treasury index is a 31.29% holding with a 6.83 duration. Maybe I’m off here but if we’re going into 2022 expecting rate hikes then how will COTZX adjust its bond holdings. [...]
Again I really like the idea behind COTZX but as I’ve looked closer, it may not be for me.

Well said, Level5.
I also like the idea behind COTZX, but for the second and the fourth reason you mentioned, I had decided a while ago against investing in the fund. I also don't particularly like to invest in a fund of other in-house funds, especially, as you pointed out, when "six of the funds 13 funds are invested in 1.56% or less". I prefer that manager(s) go out and select the individual stocks and bonds that are most suitable for the successful implementation of their goals, good examples are the managers of funds like FMSDX and VWINX.
My current choice of an alternative fund is JHQAX. Still quite happy with its risk/reward profile. These three funds, by the way, make up a significant portion of my conservative portfolio.
Good luck,
Fred

Hi guys,
FWIW: As I stated above CTFAX carries a weighting of 12% within my portfolio's income sleeve. I have some other multi-sector income funds held in this sleeve that also holds some equity. The 12% weighting for CTFAX was chosen so that it could weight up to 80% in equity and not throw the sleeve beyond its 15% equity cap. So, for me, it stays within this sleeve even if it sould go equity heavy in a stock market downdraft and load equities thus reducing its allocation to bonds.
Another fund that I like and that I own is CFIAX (Columbia Flexible Capital Income) which is held in my hybrid income sleeve. It sports about a 4% yield.

COTZX has done well over the life of the fund -- 19 years, Sortino=1.14, APR=8.3, Avg 3 Year Rolling APR=7.2 but I personally would not treat this as a bond sub given the max DD of 42.4% in 200902 and an Ulcer of 7.3.
Imo PRWCX has better risk adjusted returns than COTZX (big risk being manager skill of course)
PRWCX stats are -- 35 years, Sortino=1.40, APR=11.7, Avg 3 Year Rolling APR=11.3, Max DD=36.6, Ulcer=5.3
SFHYX stats are
17 years, Sortino=2.08, APR=7.2, Avg 3 Year Rolling APR=6.7, Max DD=16.9, Ulcer=3.5

John Rekenthaler from M* reminisces about the mutual fund industry over the past 33 years.
Random quotes below.
"In 1988, the largest mutual fund was Franklin U.S. Government Securities (FKFSX), which finished the year with $11.7 billion."
"In 1988, three index funds existed: 1) Vanguard 500 Index (VFINX), 2) DFA U.S. Micro Cap (DFSCX), and 3) a brand-new entrant from Fidelity that was eventually merged into the company’s current offering Fidelity 500 Index (FXAIX). (Even that list is suspect, as DFA now states that its funds are actively managed. However, as it called DFA U.S. Micro Cap an index fund at the time, that is where I have placed it.) In aggregate, those funds held $2 billion, making for a market share of slightly under 0.5%."
"Back in the day, investors who emphasized fund expenses were viewed as cranks. Life was too short to worry about a few basis points. In 1993, for example, the five top-selling mutual funds carried average an average expense ratio of 1.09%."
Link

It currently looks like my overall portfolio stock % per Fido will be about 65% after my once a year cash distribution has been completed at the start of 2022 (vs. about 67% in stocks at the start of 2021).
A couple of OEF updates. The Bond sleeve now includes SVARX, RCTIX, PEGAX, and ARTUX (a very new OEF with experienced managers). And, the Mixed Asset #1 portfolio sleeve has been partially updated -- holdings here are selected based on a combination of anticipated overall returns and anticipated volatility during significant market corrections. That sleeve now includes VWINX, BGHIX, PRSIX, and SUNBX (another very new OEF with experienced managers that I'm guessing makes sense to include in this sleeve.)
I don't know if it means anything. But, the total distributions from my OEF holdings were up substantially in 2021 -- perhaps as a result of OEF manager activity this year resulting from a combination of market anxiety and exuberance. The last similar annual uptick in my distributions was in 2007. And, 2008 turned out to be an eventful year!

Thank you for the kind words,@Level5. I have almost 9% of my overall portfolio in COTZX/CTFAX. I like it’s Benjamin Graham style approach to value investing. Automating removes the emotion of investing.
As far as investing in bonds when rates are likely to rise? I own bonds (45%) for diversification anyway. I expect volatility to accompany inflation and rising rates. Shorter duration is better when rates rise. Longer duration is typically better when the stock market falls. I am happy with the long term performance of COTZX/CTFAX, but recognize that it will underperform during bull markets,
For downside protection, I own TMSRX which has currently low returns but decent downside protection. BAMBX, SWAN, ARBIX, and PHDG rate highly. My base case is continued, but slowing growth in 2022, with moderating inflation, end of bond purchases by Fed (QE), and modest rate hikes. I am waiting for the December MFO data before making any decisions.
Wishing you Happy Holidays and a prosperous 2022!
Lynn

Hi @MikeM - thanks for your message. What I meant to say, and did so incompletely was that COTZX has these S&P *trigger* points where they will then buy or sell based on how the market shows up. I have my own *trigger* points to buy (from bonds or cash), based on market dips/drops (not as defined as COTZX) and harvest gains (to bonds or cash) when my stock percentage moves beyond a threshold. In my opinion, that’s what COTZX does. The difference is, as @CecilJK noted, it’s automated for you.
If you have a portfolio of $5-10 million (which I do not), a 2% investment still comes out to be a hefty chunk of change ($100 - 200K), though not a big impact overall.
So one question I ask myself is, am I willing to pay the extra *er* fees for a service that I currently enjoy and still think (relatively) competent doing?

Recently reduced our equity % by around 5%. Did so by selling shares from an all-equity fund and added to TRAIX and our holdings in PRFRX.
Really part of rebalancing as our equity stake had risen higher than desired.

@hank, love the balance of forces image. You have some interesting physics concepts gong on there. Takes me back to the many college physics courses I had. I also like your input on TMSRX. I did purchase that fund as a bond alternative but maybe expected more. Maybe expected too much. It's still a keeper for me but I may have over-played the expectation and the amount I allocated to it.
I don't expect to change overall equity percentage much from 2021. My self-managed portfolio has been about 50% equity. I have been adjusting that balancing act though like hank's image. I've had about 30% in 3 balanced funds for years, mostly PRWCX, and plan to stay at that ratio. My biggest change for 2022 will be to go with a higher percentage of alt-funds, 3 of them equally weighted at 8-10% each. They are TMSRX which I've reduced and JHQAX, CTFAX which I have been increasing. The choices we have for alt-funds is of course many, but I think these 3 are all different enough to work well together. All, fingers crossed here, should hedge an equity bear which is my intent. I also have held ETF's, DBC (a commodity basket) and IAU (gold) at about 10% combined as an inflation hedge. I don't plan a change there.
Thanks for starting the post @MikeW. Always interesting to hear others ideas. Good investing to all in 2022.

First, it doesn’t anticipate market moves but responds after the fact - I do that on my own.

@Level5, I would say the fund acts contrary to this statement. Market valuations go up, it sheds equity. Valuations go down it buys. Buy low, sell high. Anticipating the next trend up or down, not reacting to it.

Fourth, the treasury index is a 31.29% holding with a 6.83 duration. Maybe I’m off here but if we’re going into 2022 expecting rate hikes then how will COTZX adjust its bond holdings.

I would also like to hear more about this concern from more knowledgeable bond posters. I would say a 6.8 year duration for treasuries is on the low side and possibly more in the safe range if inflation takes off, but I'm not sure.

Fifth... I think I’d need to be invested much more deeply than I am at present...

I totally agree with that statement if you trust the 'buy low sell high' concept it follows. The previous poster acknowledged he has a 2% stake in the fund (2% of total portfolio), .12 x .18= .02. Owning the fund at that percentage IMHO will result in very little affect on total return, a fraction of a percent maybe. If your reason to own this fund is to dampen the affect of a market drop and take advantage of the subsequent market recovery you need to own a meaningful piece - or why bother.
But as you said, it may not be for you. Good luck with your decision.

@hank: as you know, I let TMSRX go. I just took a look at the fund's allocation stats on M* and I am a bit perplexed. If the PMs are really holding 59% in cash with a 10% short position on US equities, it's no wonder the thing acts like a MMF. They cannot be doing what they did in 2019 and 2020. Thanks for finding that benchmark which helps explain what has been going on.

Hello CecilJK - thanks for responding. I realize my bias is showing. Your answer reminds me that given a large portfolio, a less than 5% allocation would be significant.