This article from Barrons provide some insight into issues with HYMB
http://online.barrons.com/news/articles/SB50001424053111904780504580049990149821472

In the mini selloff in junk munis in early July, HYD sold off over 4% early that month (closing highs to intraday lows) while HYMB sold of over 3%. Yet the open end barely sold off over 1% while EIHYX didn't even sell off 3/4 of a %.

HYD has 646 bonds in the fund, so it must have been the general asset class itself that sold off, no? Maybe the pertinent question is, how did EIHYX manage to not sell off like HYD? Was it the active management and bond selection? HYMB has 325 bonds, again implying that it was the asset class that sold off, and somehow EIHYX was protected.
I don't see any leverage in these etfs. They are not closed end funds.

Hi Tampabay,
Sorry to learn that your situation is such that you have severely constrained options relative to active/passive fund decision-making and changes.
Unless you are an especially adroit mutual fund manager screener, the price that you are likely to pay for assembling an actively managed fund portfolio rather than an Index dominated portfolio hovers around 1% annually.
The 1% penalty is not a random number that I invented. It is a general average that I gleaned from the Monte Carlo studies reported recently by Rick Ferri. I have referenced this body of work earlier, but it is worthwhile to revisit it now. The title of the report is “The Case for Index Fund Portfolios”. Here is a Link to it:
http://www.rickferri.com/WhitePaper.pdf
The Ferri Whitepaper is based upon a series of Monte Carlo-based simulations that used real world fund data for various recent timeframes. Each Monte Carlo separate case used 5,000 random fund selections to construct a portfolio. Actively managed fund portfolio performance was measured against equivalent passively managed Index products.
The Monte Carlo analyses were completed for 3-fund, 5-fund, and 10-fund portfolios. Different timeframe data were also explored.
The actual numbers changed for each simulation, and are nicely summarized in the referenced paper. Especially meaningful performance summarizes can be found in Figure 1 and in Table 6. You should check these out. Specific numbers change as the number of funds dimension and the timeframe dimension changes.
In these various cases, Index portfolios outdistanced actively managed portfolios in 82% to 90% on the instances. In those cases when the active funds outperformed the Index portfolios, the excess positive returns where one-third to one-half the negative excess returns in the failed instances.
As a very general summary, a portfolio constructed with actively managed funds will deliver approximately 1% less return than its Index equivalent. That’s the sad news.
The good news is that the active managers do recover some of their operating costs with perhaps a mix of superior stock selection and/or effective market timing of entry/exit points. Although persistent performance is an issue, a small cohort of active managers do deliver positive excess returns (Alpha) over complete market cycles. That’s the real acid test.
I wish you success in identifying this small cohort. Low cost is one indicator even endorsed by Vanguard. Michael Mauboussin has also stated that fund managers seem to generate peak outcomes in their early 40s. Perhaps an age criteria, like centered on 43 years old, would aid the search process.
Good Luck and Best Wishes.

Robert, it's their volatility as well as having to deal with bid/ask spreads which can be wide in something as thinly traded as HYMB. In the mini selloff in junk munis in early July, HYD sold off over 4% early that month (closing highs to intraday lows) while HYMB sold of over 3%. Yet the open end barely sold off over 1% while EIHYX didn't even sell off 3/4 of a %. Not including today, HYD is up only 12.20 YTD while the big three in the open end are up between 14.22% to 15.01%. HYMB is up 13.74% but again, wide spreads on a thinly traded product.

@rjb112: "The Fed just revealed yesterday that the Fed Funds rate, currently 0% to 0.25%, is expected by the Fed to be at 3.75% at the end of 2017. If the corresponding rates of the bonds that the DoubleLine Long Duration Bond Fund will invest in also increase 3.75%, the NAV of the fund would be expected to drop close to 37.5%."
why do you think that the overnight fed rate has anything to do with the long term interest rates?

There has to be at least some connection. That doesn't mean that the 10-yr or 30-yr has to go up by 3.75%, but there has to be a connection.
Current Fed Fund rate: 0% to .25%
Expected Fed Funds rate end of 2017: 3.75%
If there was no connection at all, then by the end of 2017 we would have an inverted yield curve, with the overnight rate higher than the 30-yr and 10-year rates.
If there was no connection, we wouldn't have all this talk about bond fund Duration, and the typical statements about "if rates go up 1%, the NAV will go down by the amount of the Duration", etc. Yeah, they could do a much better job specifying exactly which rates they are talking about, but the implication is that as the Fed raises rates, so generally will rates rise.....
I would like to read a "Whitepaper" or good article on the relationship between the Fed Funds rate and the 10-year and 30-year Treasury yield.
Do you know of any articles on the subject?

VTSMX 5yr. avg returns= 16%, 10 year avg. = 8.66%
MY question is How does you portfolio(MUTUAL FUNDS) compare? NOW IS GONE TOMORROW...

http://www.sec.gov/Archives/edgar/data/1309187/000089418914004577/wyfunds_497e.htm
THE CORE FUND
a series of WY Funds
Class I shares: SGBFX Class Y shares: SGBYX
Supplement dated September 19, 2014 (effective at the close of business) to the Prospectus dated May 1, 2014
The Board of Trustees of The Core Fund (the “Fund”), a separate series of the WY Funds, has concluded that it is in the best interests of the Fund and its shareholders that the Fund cease operations. On August 25, 2014 the Board authorized the liquidation of the Fund and redemption of all outstanding shares on September 30, 2014, 2014.
Effective September 19, 2014, the Fund will not accept any new investments and will no longer pursue its stated investment objective. The Fund will begin liquidating its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Shares of the Fund are not available for purchase.
Prior to September 30, 2014, you may redeem your shares in accordance with the “How to Redeem Shares” section in the Prospectus. The Board of Trustees has adopted procedures that permit in-kind redemptions (permit you to receive proceeds of a redemption in securities instead of cash) Please contact the transfer agent at 1-866-329-2673 to request an in-kind redemption. The Fund may, at its discretion, redeem your shares by giving you the amount that exceeds the lesser of $250,000 or 1% of the Fund’s net asset value in securities instead of cash. In-kind redemptions, will be processed through your broker or other financial intermediary. Unless your investment in the Fund is through a tax-deferred retirement account, a redemption is subject to tax on any taxable gains. Please refer to the “Tax Status, Dividends and Distributions” section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO SEPTEMBER 30, 2014 WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE. CASH REDEMPTION PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. IF YOU HAVE QUESTIONS OR NEED ASSISTANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR DIRECTLY OR THE FUND AT 1-866-329-CORE (2673).
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of a redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement and the existing Prospectus and Statement of Additional Information dated May 1, 2014, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated May 1, 2014, have been filed with the Securities and Exchange Commission, are incorporated by reference and can be obtained without charge by calling the Fund at 1-866-329-CORE (2673).

Hi Guys,
Active mutual fund management is certainly not dead, and will never die.
Why? Active managers are experiencing some tough years, investors are abandoning them in droves, and academic/industry research paints a dismal picture. The simple answer is human hubris. Nobody readily accepts average performance; almost all of us reside in Lake Wobegon. Or at least we want to believe that’s true.
Outcomes are the sum of skill and luck components. That’s not my model. Michael Mauboussin advocates this model and writes extensively about it. He uses numerous sports analyses to illustrate his findings. His overarching conclusion is that overall skill levels are increasing to a point where performance differences are small. That means that outcomes are more dependent upon luck factors since skill neutralizes itself.
Mauboussin uses ballplayer and superstar Ted Williams as a prime example. Williams was the last player to hit 400 for an entire season. He believes that record will stand forever because the skill normal distribution has become very spike-like in character; its standard deviation has decreased substantially over the past decades.
Whereas, in Williams’ playing days a plus 4-sigma performance was needed to reach a 400 batting average level, with today’s crunched higher skills, an unlikely 6-sigma performance is required to achieve that lofty 400 hitting zone.
Similarly, the professional investors today would likely outperform those from yesteryear. Now professionals are better trained, better informed, have huge staffs, and super computers. All professionals benefit from these pluses about equally, and any resultant perceived advantage tends to cancel each other out.
Seeking Alpha is a more challenging task given the competency of the players. It’s a tough game, but animal spirits keep many players in it. “Average” is just not the American way. Note that today 70% of the trading is done by professionals. Where does that place us individual investors within the skill-luck spectrum tradeoff in a relative sense? We know more, but so do these pros.
I mention Mauboussin because he has written many books that touch on this subject. His “The Success Equation” is devoted to this topic. I have not read it. But I have read a lengthy report that Mauboussin composed that formed the basis for his book. The title of the article is “Untangling Skill and Luck”. Here is a Link to that work:
http://vserver1.cscs.lsa.umich.edu/~spage/ONLINECOURSE/R15SkillandLuck.pdf
It’s a very nicely written report. It contains many investment lessons that could benefit you guys. I recommend you download and absorb it.
Best Regards.

Well, as usual, I just shot my mouth off without worrying too much about the actual numbers, so when I looked into it, I was happy to see that I was correct.
Quality means different things to different people of course. To me, the paramount data point would be earnings predictability. The etf QUAL uses 3 factors: high return on equity, low debt to equity, and low earnings variability. Its YTD return is 7.98%. Vanguard Dividend Appreciation VIG uses a rising dividend stream as a proxy for "quality". Its YTD return is 5.76%.
Both of these etfs falls short of the total index etf (VTI) which is currently up 9.54%

@rjb112: "The Fed just revealed yesterday that the Fed Funds rate, currently 0% to 0.25%, is expected by the Fed to be at 3.75% at the end of 2017. If the corresponding rates of the bonds that the DoubleLine Long Duration Bond Fund will invest in also increase 3.75%, the NAV of the fund would be expected to drop close to 37.5%."
why do you think that the overnight fed rate has anything to do with the long term interest rates?
in terms of timing of the launch, it is curious. however, if he thinks that the long rates are to go up in the short term due to the improving economy and exit of the large buyer (the fed), and then will stabilize for many years at around 4.5%, then he might get a good entry point during the next 6-8 months as the fed purchases subside and the first overnight rate hikes get implemented. also, the rising equity markets caused many previously underfunded pension schemes to get close to the fully funded status. most of them went to their respective boards and investment committees to ask for the 'de-risking' mandate. as more of them get this approved, there will be a huge demand for the long-term treasuries and IG corporates. so, may be, just may be, he has a vision and perspective that some on the retail side simply lack?

Another viewpoint on the active versus passive argument.
http://m.barrons.com/articles/BL-FUNDSB-16551?ref=/focusonfunds

FYI: European stocks have taken it on the chin.
This year going into Thursday, iShares Europe (ARCA:IEV) was up a scant 0.39% vs. 9.70% for SPDR S&P 500 (ARCA:SPY). In the past three months, IEV plunged 4.77% while SPY rose 3.53%. European stock mutual funds tracked by Morningstar were down.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg0Nzg3ODE=
Enlarged Graphic: http://news.investors.com/photopopup.aspx?path=WebMut2c091914.gif&docId=718040&xmpSource=&width=1000&height=562&caption=&id=718057

FYI: Nobel Prize winner cites lower costs and questions about active manager skill as reasons to stick with index funds. Let's all have another pitcher of Kool Aid !
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=665712

The Dow 30 is oddly, a price weighted index, not a capitalization weighted index like the S&P 500 and most (but not all) other indexes.
Here's a look at the weightings of the top 25:

OK MFOers, what am I missing here?
"Source ETFs Unveils Euro Stoxx 50 Fund as Initial U.S. Offering"
But I already see 2 SPDR etfs that seem to have that ground covered:
SPDR STOXX Europe 50 ETF (FEU)
SPDR EURO STOXX 50 ETF (FEZ)
Did we need a third one?
Yes, there are some differences between FEU and FEZ.....one covers the UK, one does not.
What will this third one do that the others didn't?

I took Social Security at 62 and don't regret it one iota! By the time it all equals out, something like around 78, it won't make any difference as I assume my nest egg will be that much larger. I just learned today that one of my lady friends in one of my hiking groups woke up the other morning and found her boyfriend dead beside here. He was 65! No matter how great we may feel, we just never know. In old age methinks it is better to start enjoying those budding fruits of our long time financial labor than to just keep over-obsessing and over-planning till the day we drop.
Edit: I should also add that I turned 62 in April of 2009. Since then the market has been super. Taking early SS is just that much less of my capital I would have had to use for living/lifestyle expenses.

>>>>>@Junkster, is the reason you would salivate at a Fed Funds of 3.75% because you would want to invest in those money market funds or Certificates of Deposit, at the decent yields that we used to see in the past?<<<<<<
Yes! Unlike most here, I have no pension/employer retirement or a large monthly Social Security check. So what I earn on my nest egg is critical. At 2% (actually 1.50% to 1.75%) and more that would be more than enough to cover my lifestyle/expenses and even continue growing my capital. I am even beginning to watch the 5 year T-Bill rate like never before albeit not sure I would ever want to tie up my funds like that.

Is Gundlach looking for an eventual inverted yield curve? He has been outspoken about how he thinks the economy is not all that strong and an inverted yield curve would imply a recession. I can't see the Fed allowing an inverted yield curve though. I also think the economy may surprise to the upside in a big way. But then I never was much of a forecaster. I would salivate at a Fed funds of 3.75% in 2017 and the ensuing yields on money market funds.

The Fed released their "Dot Plot" yesterday, showing the expectations of where the Fed Funds rate will be, according to each of the committee members, at the end of 2015, end of 2016, end of 2017, one "dot" for each member, for each data point. They expect 3.75% by the end of 2017.
@Junkster, is the reason you would salivate at a Fed Funds of 3.75% because you would want to invest in those money market funds or Certificates of Deposit, at the decent yields that we used to see in the past?

Why is the Fed still paying .25% on excess reserves held by some banks???

Because banks have good lobbyists?