Another, shorter-term consideration: SFGIX has about 1/3 of assets and MACSX about 1/2 in some of the most (short-term, based on 50d ma) oversold markets worldwide, per Bespoke Investment --- SE Asia, Taiwan, & S. Korea. They can always keep going down, of course, but a bounce sometime in the near future wouldn't be too surprising.
I'm holding SFGIX, reallocating a bit from MAPIX to MACSX, and getting interested in TGMEX.

Nice analysis. Your highlighting the relatively poor performance of EM components in broader based funds brings to mind David's request for a large cap int'l fund with solid EM exposure.
In light of the poor EM performance, D&C Int'l (DODFX)'s top decile performance YTD looks all the more impressive. Fewer than half a dozen broad based large cap int'l funds with significant EM exposure (>10%) bested it this year: NBQAX, FAERX, QIVAX, PMIEX, and what I believe is (or was?) a well-liked fund here, Longleaf Int'l (LLINX). That latter one is the only noload, though they are all high cost funds.
Interestingly, the M* analysis of that fund says it no longer completely hedges currency - so if it got the hedging right this year (protect against falling EM/Japanese currency, but stay exposed to EU), that could explain some of its good performance this year.
In any case, the fact that a few funds can excel in spite of headwinds shows that both stockpicking and market weighting are important factors. Given that the average Pacific Asia ex-Japan fund is up only 0.58% YTD (and forget about Latin America and India, down 12% each), I agree that the 3% returns of SFGIX and MACSX are very healthy.

Hi Max,
According to my analysis, SFGIX is a solid fund and I would not be in a hurry to sell it.
Using EzBacktest, here are the data for select diversified EM equity funds since the inception of SFGIX on 2/15/2012, listed in order of highest to lowest Sharpe Ratio:
Fund: Total Return/Standard Deviation/Sharpe Ratio
THDIX: 25.4/14.3/0.64
SFGIX: 14.9/13.1/0.63
MNEMX: 4.1/15.0/0.42
EMRIX: 21.3/14.9/0.37
DREGX: 11.1/14.1/0.35
DEMIX: 14.5/17.8/0.34
ODVYX: 13.6/14.9/0.32
HLEMX: 7.3/14.7/0.23
EITEX: 7.3/14.4/0.08
CNWIX: 5.9/10.6/0.05
ABEMX: 1.7/16.6/0.01
CEMIX: 3.2/16.1/0.00
LZEMX: 1.3/16.0/0.00
HIEMX: 1.0/15.3/-0.07
Kevin

MAPIX has substantially more developed markets exposure than MACSX and SFGIX and so that's why it's up more this year. Take Japan as an example which has done great this year and in which MAPIX has a sizable allocation to.
2 very good EM funds with top of the class risk-adjusted performances and mentioned quite a bit the past couple of years has been HIEMX (Virtus Emerging Markets Opportunities) and ABEMX (Aberdeen Emerging Markets) but yet both are down 7-8% YTD --- which is telling of how the emerging markets as a whole has performed this year. Take Chile for example which is down 25% YTD for the iShares Chile Index. The iShares Brazil Index is down 18% YTD.
Not much more you can ask of an EM oriented fund if it has returned +3% this year which is actually pretty good. MAPIX has a different focus - dividends and dividend growth across Asia and thus has much more developed markets exposure than MACSX and SFGIX.

All the input is appreciated. I still own a big pile of EM. I bought SFGIX to diversify WITHIN E.M. beyond Asia. Seems to me Foster's bet(s) on some miners is having a negative effect. How long can platinum stay depressed?..... I'm just looking to compare, as PRESSmUP mentioned: SFGIX ytd is at +3.64% while MACSX is +3.22%...... On the other hand, my MAPIX is up ytd +9.99% and so, THAT'S what I'm looking for. But I realize that MAPIX is restricted to Asia. Thanks, folks.

SFGIX has over 50% of its holdings in emerging markets, which likely are dragging it down. I have two EM funds, ODVYX which is up 6.3% ytd and ABEMX which is down 8.1% ytd, very different from each other. I suspect emerging markets is similar to "large cap" or "small cap" each manager performs differently unless they are strictly following an index, in which case just buy the index and don't pay the higher fees. It seems when one of them starts to zig, the other zags. Emerging market is not for the faint of heart . It represents only 4.5% of my retirement portfolio ( my largest componenet). My developed market funds did much better OAKIX, at 26.4% ytd. If you bought it to give you diversification, hang onto it, its going to be a bumpy ride at times.

Most all of EM equity went nowhere or down for a large part of the year, right? It seems that sfgix returns are inline with other funds of that style. VXF is up 30something % so that seems fairly non-correlated. If the ER was lower I would buy it but I am currently trying to buy NEWFX (LW)and or Mathews Asia G&I. 5%-10% EM equity may be sufficient depending on your age so your amount in EM may be just right. Fwiw.

SFGIX is still just 2.77% of my portfolio. You others surely have noticed that it's going nowhere fast--- for quite a while, now. Today, it was my only equity fund that sat still and did nothing, AGAIN. Any new insights, encouragements, or reasons to dump it? I know there was a shareholders phone call lately....

Reply to @MarkM: First of all, "group think funds" is just a fun phrase Junkster has used a few times in previous posts, mostly in reference to ARIVX, AQRNX. I found the phrase interesting and could see where he was coming from. Since it is a made up phrase, there is no specific definition, just interpretation. So I opened it up to the idea group think funds could be a good thing too, RPHYX, FPACX, MFLDX and maybe SFGIX are good examples. I found the phrase interesting because I have been swayed to funds after being mentioned here. Some ended up great additions and some were - not so much. Call it jumping on the band wagon or discovering a new gem. But the more a fund is talked about in positive terms, the more we are inclined to buy, hence GTF.
In my own opinion, I think group-think-funds originate on every discussion board. That is a good thing. I think they are usually introduced when a highly regarded poster brings them to the attention of the board. In the 'fund alarm' days it was often guys like rono with precious metal and Asia funds and a guy named Fundmentals with funds that strived to limit down side risk. Make-More-Lose-Less was his phrase. Later it became people like scott, introducing new 'concept' risk parity or long/short alternative funds. And most of us come to this board to learn and get ideas from David's wonderful research of new and less notarized gems.
So, don't take offense to the 'group think' phrase. It really isn't any different than 'fund discovery'. Some of those discovered gems are going to fall short of expectations. Some will work out perfectly.

What an interesting thread. Thanks Mike for starting it. Because of this site I've bought over the last 2 years SUBFX, RPHYX, RSIVX, RNCOX, GPIOX, HUSIX, MAINX, ARIVX and SFGIX -- half my fund portfolio. (My other, older positions, mostly due to M*, are ARTKX, FAIRX, FAAFX, MPACX, BRAGX, BRUSX, CIPSX and VPCCX -- all great funds.) I dropped ARIVX after six months and replaced it with half HUSIX and half RPHYX, a decision I feel has both increased my returns and lowered my risk. Aside from ARIVX, about which I've posted a few times already (I lost faith not because of poor performance, but because his management reports convinced me he was a tea partier, convinced that government debt was going to smother the recovery before it started and that the thing to do was load up on miners and precious metals) I've been happy with all these funds. Sure, MAINX is down a few points since I bought it, but it's way overperformed its category, and I do think you need to give a fund at least 3 years if its management seems talented.
In retrospect, like Mike I probably didn't need an Asian bond fund, but the excitement/groupthink about MAINX drove me into it. But MAINX is doing what it is supposed to (not its fault that I chose to buy right before mon pol tightening in the U.S. came into view), it is a small position, and I will probably hold on to it at least through the next cycle of irrational exuberance about Asia.

Reply to @Vert: I never considered Grandeur funds groupthink, but regardless, as you say, they are super funds. SFGIX though is most definitely groupthink. Maybe this is much ado about nothing and I am sorry for even bringing up the term. All I know is I see a lot of funds embraced by so many here that have negative or single digit returns. If you are are younger investor, you sure don't create long term wealth in a world of double digit returns like we have been in the past five years.

Here's the short version of a 17 minute chat.
The available research points to three conclusions:
1. we could close 80% of all mutual funds without any noticeable loss to anyone other than the managers.
2. more and more money is pouring into doomed funds, something like 30% of inflows are into "closet index" funds.
3. there are characteristics which increase the prospects for future outperformance. Those include a focused portfolio, independence from the index, an alignment of the advisor's interests with the shareholders (risk-consciousness generally flows from that alignment) and reasonable expenses. In general, those characteristics are difficult if not quite impossible to achieve in a very large fund.
At Chuck's prompting ("well, David, can you name a fund ...") I singled out Beck, Mack & Oliver Partners (BMPEX) as part of a group of owner-operator funds which also includes Bretton, Cook & Bynum, Frank Value and Oakseed Opportunity. I also allowed that if one were interested in a large fund, you could do worse than Tweedy, Browne Global (TBGVX) or Vanguard STAR (VGSTX).
In his "hold em' or fold 'em" round, which is one minute assessments of funds (made in complete ignorance of the investors' needs) submitted by his listeners, I dissed Royce Low-Priced (RYLPX) and Permanent Portfolio (PRPFX) and endorsed Vanguard Dividend Appreciation Index (VDAIX, with a side-note that this is not a high-dividend fund), Seafarer (SFGIX with a side-note that Wasatch Frontier Emerging Small Countries Fund and the yet-to-be-launched Grandeur Peak Emerging Markets would offer higher octane exposure to the same universe), and Cook & Bynum (COBYX).
For what it's worth,
David

How many funds you have depends on what you're comfortable handling, and to a certain extent the size of your portfolio (you can't really have 50 funds with $100K - that would be $2K/fund, less than many funds' minimums).
I'm not fond of the minimalist approach, but that's workable - something like:
Equity - total world index, e.g. Vanguard Total World Stock (VT or VTWSX)
Bond - total (US) bond fund (one that includes some junk), e.g. Dodge & Cox Income (DODIX)
Cash - something very liquid and stable, e.g. GE Capital Bank (0.90% on savings)
Moving up from this minimum of three, I would add (and change) funds to (a) fill in gaps (e.g. foreign bond exposure), (b) tweak the mix (e.g. bring down the average market cap, as Ted suggested). If going even further, then add funds (c) for "esoterics" - sectors, alternate strategies, and finally (d) for management diversification (multiple funds covering same or similar areas).
For me, moving up from the bare bones three would somewhat follow along Skeeter's line of thinking. Generally though I would start with only one fund in each bucket, and my preference for buckets is a little different:
Cash - as above (obviously one needs a demand deposit account, i.e. one with unlimited withdrawals as well as a savings account). Might add an account that reaches for more income with minor volatility, e.g. short term muni fund such as Vanguard Limited Term Tax-Exempt (VMLTX, VMLUX), or with some loss of liquidity (e.g. I Bonds - cannot withdraw for one year, but then liquid, and after five, no penalty).
Equity - tweak via a mid cap or small cap fund.
Bonds - add a multisector fund for more junk and a fair amount of international exposure.
So now we're up to six buckets (2 cash, 2 equity, 2 bond), somewhat better market coverage, and a bit of flexibility in adjusting the portfolio mix.
Next step up would be to broaden the equity exposure and increase its granularity; and to broaden bond exposure:
Equity - large, mid, small (or micro) US; foreign (rather than global) large cap and mid/small cap;
Bond - add a flexible foreign bond fund (that can invest in emerging markets as well as developed markets).
We're approaching ten buckets here (nine, actually). If you're looking at bonds in a taxable account, you might want to throw in a muni fund (e.g. Fidelity Intermediate Muni FLTMX). This number of buckets is more to my liking; of course YMMV.
I do go further, but for the most part, that's getting into (c) and (d) above - sectors, other strategies, management diversification. Things that I view as nice to have, but in the long run I don't expect to make a whole lot of difference.
Like emerging markets? You can add a touch of Seafarer (SFGIX) or some other EM fund; like Asia? Look into the Matthews funds. Like a sector or a "theme" - loads of funds to choose from; add in limited doses. Want something more "interesting"? There are tactical allocation funds that try to pick the best area to invest in at the moment, market neutral funds that try to hold portfolios to do well in any market, etc. Again, use judiciously.
When diversifying management, I suggest hitting different style boxes, or different management styles. For example, if one has a large cap growth fund, look for a large cap value fund. If one has a deep value fund, one could look for a relative value fund. It's easy to get up to 20 or more funds this way.

I'll play David...
PRPFX - Fold
COBYX - Hold
SFGIX - Hold
WAFMX - Hold
RLPIX - Fold
VDAIX - Hold
VHDYX - Fold

FYI: Funds to be discussed.
Regards,
Ted
BMPEX, TBGVX, VGSTX During "Hold It or Fold It:" PRPFX, COBYX, SFGIX, WAFMX, RLPIX, VDAIX, VHDYX

Reply to @hank: I remained fully invested through the '08-'09 Crash, and kept adding to my portfolio, every single month. (Stopped---at retirement, in 2011.) So I'm not among those who missed the substantial gains when the Market took off again later in '09, after having pulled out. But I was, particularly after this past summer, swimming upstream, trying to grow my monthly bond dividend (and reinvest it all) in a stinky environment for bonds and bond funds.
I'm very much aware of the mistake made by those "chasing profits," who get onto the bandwagon late. I've used information gained here at MFO to very beneficial effect, in choosing my mutual funds. I am learning that one can get OUT too late, though. And it's ONE thing to switch from one fund to another while the Market is at or near all-time highs. It's ANOTHER to switch from bond funds to equity funds when the numbers have already been run-up. Leaves a bad taste in my mouth, but I cannot dwell on NOT having exited sooner. ...At this point, the end-of-year December pay-outs are something to look forward to. At this moment, my.........
-EM bond stake is down to 3.89% of holdings; (PREMX)
-"global" bonds (MAINX) 3.64% (And I notice the biggest holding is Cayman Islands stuff. This fund is going nowhere in terms of share price, but the quarterly divs. are nice. I take that as a good thing in the current negative environment. It's not fallen nearly as much as some other global and/or EM bond funds. And overall, I have indeed made money with it: +7.58%, actually.)
-.....domestic bonds (DLFNX) 2.51%
-That's 10.04% in bonds, so far....
MACSX and SFGIX holds some convertibles, I do believe; and MAPOX and PRWCX hold bonds, too.
MACSX 2.62% of portfolio.
MAPOX 8.02%
PRWCX 17.65%
TRAMX 3.14%
MSCFX 3.24%
SFGIX 2.83%
PRESX 15.34% (developed Europe. I looked. Not a thing "emerging.")
MAPIX 37.11% (I plan to move some of that to MPACX and some to MPGFX.)
Thanks to all. It's one thing to learn. Another to execute. And maybe sometimes, the only way to learn is by executing. "Break a leg," everyone.

Speaking of Andrew Foster and SFGIX, the latest shareholder letter, here, expands on his macro theme concerning the disconnect between the standard EM index and the actual economies of developing countries as they transition away from near-total export dependence. A tease from the letter:
" ... the index represents only 33% of the estimated total capitalization present in the developing world. Perhaps more importantly, the index captures only 30% of the category entitled “Domestic Services + Non-Bank Financial Services + Consumption” – the very category where I believe the greatest structural change is taking place, and which (arguably) represents the future of the developing world."

I believe MAPIX has a larger stake in Japan and China, which helped performance over both MACSX and SFGIX. Also, the Latin American holdings served as a boat anchor...hopefully this will turn around and not deter Mr. Foster from seeking investments in this area.

It is doing better than MACSX, which is the old fund he used to run at Matthews. Not by a lot. MAPIX is doing rather better. I'm holding on, waiting for SFGIX to catch fire. Can't complain too much....

Any comments on its 2013 performance?