As a conservative and a retired investor, I want some exposure to equities in my portfolio and was recently looking at balanced funds with a M* risk rating of "Below Average" and a standard deviation of < 8 or 9%.
Two highly rated funds stood out in this category: VWINX and VSCGX. However, when I compared their risk/reward profile to JHQAX, I was surprised to see that the latter fund had significantly higher 3 and 5 year total returns. While these three funds had similar standard deviations that varied in a range from 7.6 to 7.8%, JHQAX, however, displayed superior Sharpe and Sortino Ratios. I was also impressed that during the market crash last year, JHQAX only lost 3.8% and 1.4% in February and March, respectively. VWINX, on the other hand, lost 2.5% and 6.3%.
While JHQAX may limit upside potential, but at this stage of my life I am more concerned about capital preservation and prefer to err on the side of caution. And, the M* analyst's comment that "Attractive fees, a transparent and consistent process, and an experienced manager elevate JPMorgan Hedged Equity ahead of its peers..." was also quite persuasive in my decision to invest in JHQAX.
So far, so good.
Fred

https://nytimes.com/2021/04/05/technology/amazon-nlrb-activist-workers.html

Amazon Illegally Fired Activist Workers, Labor Board Finds
The two employees had publicly pushed the company to reduce its impact on climate change and address concerns about its warehouse workers.

After the Strong Capital Management (and other related) scandals in the late 90s the SEC pressured fund houses to crack down on frequent trading abuses. These “skimming” operations were often orchestrated in concert by large groups (ie an employees’ investment plan). But smaller investors as well were impacted by generally more stringent curbs imposed on frequent buying and selling. I don’t find Price’s or others’ curbs particularly onerous; however, a way around the limitations would appear to exist in substituting ETFs for traditional funds.
While the fee advantages seem significant, I’m wondering if a retiree in his mid-seventies would find it worth the trouble in converting over to ETFs what has proven a prudent and profitable diversified approach - using roughly 12-15 long-held mutual funds from fiduciaries long acquainted with. Changing from one investment method to another would seem always to entail some risk of error.

I thought this to be a good discussion topic :
https://www.thebalance.com/how-much-cash-should-i-keep-in-my-portfolio-357127
I would venture I'm holding around 35 % at this time.
Derf

Thanks everyone for the suggestions. Really appreciate it.
@MrRuffles - we are members of our state nonprofit association and I have been poking around on their website, but no good leads yet.
@sma3 - I have called Vanguard. They told me they do not provide advisory services for organizational accounts. But, maybe they meant small ones. They do have a nonprofit investment advisor service for accounts over $5 million. If only...
@MikeM - have been looking at the NAPFA site, but the only search is by zip code, so it take a lot of time searching through websites and ADV forms to find ones that work with nonprofits or charge hourly.
@davidmoran - thanks for the reminder about Bob Cochran. Lovely gentleman. I will ping him on LinkedIn.
What a great community this is!

I recall jp morgan and other big banks forecasting treasury rates for the 10 year going to 5% in 2010-2012 (more or less). Nope, they didn't get that right.............
The big kids get fooled, too; with how smart they think they may be.

NYT may be subpar, but see if the complexity and opacity are clarified here:
https://www.marketwatch.com/story/these-are-the-hidden-dangers-lurking-inside-spacs-that-can-hurt-you-11614267559

Thank you @carew388
I read David's write and posted just prior to traveling. I should have waited until returning home. I'll ponder the 65 years of history and markets as to how relative this is to the dynamic markets in which we play.

$1M min for institutional shares? And here I was thinking this might be something practical :-)
Here's Vanguard's list of TRP tickers offered:
https://personal.vanguard.com/us/funds/other/bytype?FundFamilyId=6107
I picked the first institutional class ticker on that list, PRAMX, and looked it up on M* (legacy page). At least according to M*, Fidelity Institutional doesn't sell it.
http://financials.morningstar.com/fund/purchase-info.html?t=PRAMX
In contrast, M* says that Fidelity Institutional (but not Fidelity Retail) does sell Vanguard Admiral class shares, e.g. VEIRX:
http://financials.morningstar.com/fund/purchase-info.html?t=VEIRX
Fidelity's website responds differently when one attempts to buy each of these. For the Vanguard fund, it tells you the minimum Fidelity requires for a purchase: $2,500. Only when you attempt to preview the buy does it instruct you to speak with a Fidelity rep.
With PRAMX, the site doesn't tell you the min. That is often an indication that the fund isn't carried at all by Fidelity. One can still preview a buy order and get the same message about needing to speak with a Fidelity rep.

Vanguard have both the institutional and investor shares, but the institutional shares require transactional fees. For certain investors such as Voyager with greater than $1M, Vanguard would offer 20 free trades on Tranaction-fee mutual funds per year. T. Rowe Price institutional shares require $1M whereas Pimco institutional shares require $25K.
I am pretty sure the institutional part of Fidelity will offer the TRP institutional shares.

While historical data is interesting; I reserved any comment until I clarified the "65 years" description in the below quote. What 65 years period?
Perhaps my 1 year of Covid era sheltering has literally affected my cognitive abilities; a "can't connect the dots anymore" circumstance.
Thank you @David_Snowball et al, and don't hesitate to point out that I may have begun a cranial-rectal inversion syndrome.
Stock light version 4.0 MFO, April link

In the past, 2004, 2010, and 2014, we’re shared research from T. Rowe Price that illustrates the dramatic rise in risk that accompanies each increment of equity exposure. Below is the data from the most recent of those articles, which looks at 65 years of market history, from 1949 to 1913.

It looks to me VGHCX was a grand slam !!!
That's assuming investors have the stomach for it. It went through a patch where excluding withdrawals, it dropped 33.17%. How many people would have stuck with it, let alone taken the scheduled withdrawals, which would have increased the drop to 42.88%? And that's just month-to-month calculations. Daily peak to daily trough was likely worse.
That drop lasted the better part of two years (1 year, 9 months), and the fund took nearly an additional two years (1 year, 10 months) to recover.
Investors may have had an even harder time sticking with PRWCX: max (monthly) drawdown of 36.61% with no withdrawals, 45.38% including withdrawals. That fall took the same 1 year, 9 months as it did for VGHCX, though PRWCX recovered faster, taking "only" 1 year, 2 months.
(Some drawdown figures come from the "Drawdown" tab on the PV page.)
I'm not saying that past results including these bumps in the road aren't impressive, or don't suggest a good likelihood of doing very well by investing aggressively. I am asking, when people do encounter sizeable bumps (even with a small withdrawal rate), whether they will hang on. Unlike using an annuity, they have no guarantee of success with funds: "past performance does not guarantee future returns."
Unfortunately people have a tendency to bail at the worst times. One will do better by making a plan, any plan, whether it is self-managed retirement, an annuity, target date funds, or anything else and just unemotionally sticking with it.

Just posted all updates through March to our MFO Premium site, including MultiSearch, Great Owls, Fund Alarm (Three Alarm and Honor Roll), Averages, Dashboard of Profiled Funds, Portfolios, QuickSearch, Fund Family Scorecard, and Dashboard of Launch Alerts.
The site includes several other analysis tools: Correlation, Rolling Averages, Trend, Compare, Ferguson Metrics, Calendar Year and Period Performance.
Glancing through the Honor Roll funds, which represent best performing funds in category based on absolute return for the past 1, 3, and 5 years, you'll find some eye-watering numbers this past year.
QuickSearch, Great Owls, Three Alarm, and Profiles tools remain available to the public without subscription.
More of the latest update here.

https://www.yahoo.com/news/egypts-first-female-ship-captain-112905034.html
FEMALE DRIVER !? Nope,
Happy Easter, Derf

Amazon acknowledges issue of drivers urinating in bottles in apology to Rep. Pocan

Amazon.com Inc has apologized to U.S. Representative Mark Pocan, admitting to scoring an "own goal" in its initial denial of his suggestion that its drivers were sometimes forced to urinate in bottles during their delivery rounds.
...
Its admission came a week after the Democrat criticised Amazon’s working conditions, saying in a tweet: “Paying workers $15/hr doesn’t make you a ‘progressive workplace’ when you union-bust & make workers urinate in water bottles.”

https://www.reuters.com/article/us-amazon-com-workers-pocan-idUSKBN2BQ0DC

Using Portfolio Visualizer's portfolio analysis tool I wondered if the "safe withdrawal rate" data could be used as a substitute for an annuity rate. SWR is a historical data point that changes depending on the historical start and end date. An annuity is a guaranteed income based in part on today's low interest rates. Obviously two different approaches to securing income in retirement. I'd like to consider part of my retirement income being derived from a Safe Withdrawal of stocks, bonds, and alternatives.
Exploring some older mutual funds (VWINX, VWELX, PRWCX, and VGHCX) I discovered the following SWRs (found within the Metrics tab):
VWINX = 7.18%
VWELX = 8.02%
PRWCX = 9.16%
VGHCX = an astouding 14.31%
In other words, for each $1,000 invested in these four funds, each could safely pay out their SWR each year of:
Year 1:
VWINX = $71.80
VWELX = $80.20
PRWCX = $91.60
VGHCX = an astounding $143.10 (close to double VWINX's SWR)
note: the annual dollar amount would adjust based on the annual mutual fund's dollar value at the end of each year:
Using VWINX's SWR (I set the annual withdrawal of a fixed percent of 7.18%) and I tested all four funds over the past 35 years (back tested from 1986 - 2021). All four survived a 7.18% annual withdrawal. Both VWINX and VWELX ending "cash value" were impacted by inflation. The 2021 (inflation adjusted value) of VWINX being only $567 of its original $1,000 value. Both PRWCX and VGHCX value stayed ahead of inflation while paying out 7.18% annually. VGHCX's value grew four fold over the last 35 year time frame. As a result it paid out larger and larger amounts annually compared to the other three fund choices. While VWINX paid out a pretty steady amount over the 35 year time frame (between $70 - $100), VGHCX's pay outs grew from $70 in year 1 (1987) to over $400 - $600 annually (years 13 - 35).
Most annuities don't provide inflation riders and many do not offer a cash value upon death. So strictly speaking even VWINX would be a good substitute for an annuity that pays out 7% with a ending cash value of $1,351 (equivalent to $567 back in 1986). The other three funds were an even better "annuity income" choice at that SWR.
None of these funds busted (went to zero) at this 7.18% Safe Withdrawal Rate. In fact, VGHCX's inflation adjusted cash value was $4,141...four times what was invested back in 1986. In addition, VGHCX provided larger and larger annual income pay outs that kept up with (exceeded inflation). Will the healthcare sector, and more importantly this fund, continue to offer such great performance?
Here's the link to PV with these four funds. The "Metrics" tab has the data on SWR (Safe Withdrawal Rate). Let me know if you find a fund with a SWR higher than VGHCX (14.13%).
PV Link

Apr 3rd Episode:

One of the selling points of CEFs is that because they don't have to deal with money flowing in and out as with OEFs, they don't have to endure cash drag.

I agree. I think in some respects CEFs would be a better structure than open end funds and ETFs were it not for what is euphemistically called the "agency problem," and less politely called "manager greed." Managers hold onto CEF assets like grim death and realize they have a captive asset base regardless of the discount the CEF trades at, so they can gouge investors with high fees. On top of that they often needlessly apply leverage to the CEF because they can charge fees on both the base assets and the leveraged assets, amplifying their fees while simultaneously increasing investors' risks. A truly honorable CEF manager charging fair fees, judiciously using or not using leverage, and mindful of the pain extended discount periods cause, could be a beautiful thing. But it's like spotting an endangered species in the wild. In some respects I think the newer interval fund structure is better, allowing periodic quarterly redemptions of about 5% of assets, but still all of the current ones charge fees that are way too high and are still gaming the system with excess leverage to amplify their fees. But the advantages in the underlying portfolio of being able to invest in illiquid assets without having to worry about shareholder redemptions is a significant one.

Using Fidelity's example of "constructive" ROC with a slight modification:
Let's say a CEF is priced at $100/share, and the fund has set a $5/share annual managed distribution. For simplicity, we'll assume a single annual payment.
Fidelity's example: The fund keeps $5/share (5%) in cash and invests $95/share in a security. That security appreciates 10%. The fund pays the $5 out of the cash as an ROC. The investor is left with a share that's worth 110% x $95 = $104.50, all invested in the single security. No cash remaining to repeat this process.
Modification: The fund invests all $100/share in that security. The value rises to $110. The fund sells $5 of the $110 (recognizing a cap gain of $5/$110 x $10 = 45.45¢) to pay the distribution. The investor is left with a share that's worth $105, and a tax liability of, say 23.8 % (20% cap gains + 3.8% Medicare net investment tax). That amounts to a tax cost of less than 11¢.
In Fidelity's original example, the investor is left with a share worth $104.50 plus an ROC of $5 for a total of $109.50.
In the modified example, the investor is left with a share worth $105 plus an after-tax div of $4.89, for a total of $109.89.
If the former looks better to "some investors", those investors are letting the tax tail wag the investment dog.
ISTM constructive ROC is a post hoc rationalization. One of the selling points of CEFs is that because they don't have to deal with money flowing in and out as with OEFs, they don't have to endure cash drag. Exactly.

Thanks. The first paper references Subchapter M (of Subtitle A) of the tax code. This is where the 50% rule, Section II(C)(1)(b)(i) in the second paper, comes from.
Here's the tax code itself: https://www.law.cornell.edu/uscode/text/26/851
With a 58% allocation to St. Joe, ISTM that there are just two ways that Fairholme could be squeaking in under the 50% limit:
- As you suggested, by growing into the larger allocation, or
- Manipulating the size of its holding, since the 50% test is applied only at the close of each quarter.
Even if there is "constructive" return of capital with a CEF, it still strikes me as deceptive. It's used to maintain dividends. That constant stream of dividends tends to appeal to people who are averse to selling appreciated shares of a non- (or low-) dividend paying fund, because that would be eating into (appreciated) capital. Yet the two are equivalent (aside from tax treatment).
Either way, one is taking money off the table - an investment has appreciated and some of that appreciation is cashed out. The difference is largely one of appearance.