@VintageFreak,
A correlation that seems to have changed recently is the performance of EM funds verses PM funds. Prior to 2011, there seems to be a fairly high correlation between Emerging Market and PM equity funds. Not sure what changed since 2011. My understanding of this correlation was based on the fact that many of the PM equity companies (their mines) are located geographically in the EM areas of the world.

@MFO Board Members: Here's what a long-term sea of red looks like in regards to precious metals. Enough said !
Regards,
Ted
1Mo. YTD 3MO. 1Yr. 3YR. 5Yr.
Equity Precious Metals -16.99 -14.28 -31.24 -26.02 -29.70 -12.95

FYI: Fund managers, flush with $4.7 billion in fresh cash, are running out of options to catch up with the Standard & Poor’s 500 Index (SPX) after trailing the measure’s record rally.
Regards,
Ted
http://www.bloomberg.com/news/print/2014-11-03/record-s-p-500-runs-away-from-mutual-funds-trailing-index.html

There are lots of gotchas with closed end funds. For example, the "spread" may be due to the fund being a managed payout fund that is eating away at your principal.

Managed distribution funds attempt to pay the same amount in dividends monthly (or quarterly or whatever). If they are making at least that much money, wonderful. But if not, they're paying that high dividend rate out of principal - you're getting your own money back, not earnings.
ETY is an example of this. According to its latest semi-annual report, "the Fund makes monthly cash distributions to common shareholders, stated in terms of a fixed amount per common share. The Fund currently distributes monthly cash distributions equal to $0.0843 per share."
That's regardless of whether the fund is even making money at all. M* reports that YTD, out of $0.843/share in total dividends (i.e. 10 months worth), $0.5281/share was your own money back (returned capital), not earnings. That comes out to be around 5% per year of dividend not being income. The true "spread" is thus closer to 3% than to 8%.
M* writes of this fund: "This fund, among others in the series, has used destructive return of capital extensively in the past to meet its distribution targets. ... data for calendar-year 2013 thus far indicates the fund may again use destructive return of capital to a limited degree. That's one reason the fund earns a Morningstar Analyst Rating of Neutral."
Leverage is another factor in a lot of closed end funds. Not this one, and I'll leave that for another post, or for others to comment on.
Make sure you understand how CEFs work - how they're traded, what affects their price, how their dividends work, how they raise money if leveraged, etc.

Bill Bernstein M* interview talks breifly about adding precious metals equities to your help lower overall portfolio volatility and help long term returns. Most PM equity funds are now offering a free gift of Band aids and iodine with each set of falling knives that you purchase.
From their M* interview:
"Benz: On the flip side or in a similar vein, one deeply unloved asset class right now is precious metals, which was very much in vogue a few years ago. You think it's also a pretty interesting time to be looking at that asset class, too.
Bernstein: I do. It's a market that I've always been interested in. I've been following precious-metals equities for the past 25 or 30 years, and it's important to understand how this asset class behaves in the long term. It has very low long-term returns. If you look at Ken French's series, which goes back more than a half century, the return if you count the most recent declines probably comes out to be less than 5% per year nominal, which is 1% more than inflation over that period, which was 4%. So, it has gotten very low returns. It has bone-crushing volatility. Now, three times in the past 50 years, it's fallen in price by approximately 70%.
"Benz: So, why do we even want to own this asset class?
Bernstein:Well, it occasionally zigs. When the overall market sags, it does particularly well. When there is high inflation--and one of the reasons why it has done so poorly recently is that inflation hasn't turned up--it turns out that even with its high volatility and its crummy returns, adding several percent of it to your portfolio does improve its behavior. It improves its return and it improves its volatility as well; it lowers its volatility."
I must admit from a price stand point, these funds are grabbing my attention.
morningstar.com/cover/videocenter.aspx?id=670230

@VintageFreak: Excellent point ! Top Managed Futures Funds from U.S. New & World Report, but boy are they expensive.
Regards,
Ted
http://money.usnews.com/funds/mutual-funds/rankings/managed-futures
M* Managed Futures Fund Returns:
http://news.morningstar.com/fund-category-returns/managed-futures/$FOCA$13.aspx
M* Top Performing Managed Futures Funds 3mo.
http://finance.yahoo.com/funds/lists/?mod_id=mediaquotesmutualfunds&cat=$FOCA$13$$&rcnt=50

It seems, good corporate earnings and improvements in the economy are keeping the little train going ...
Are you on board?
http://www.bloomberg.com/news/2014-11-03/u-s-index-futures-little-changed-after-s-p-500-record.html

@heezsafe, Thanks for posting this. One paragraph of the Sept. speech caught my eye.
"Although alternative mutual funds only accounted for 2.3% of the mutual fund market as of December 2013, the inflows into these funds in 2013 represented 32.4% of the inflows for the entire mutual fund industry, with almost $95 billion of inflows into alternative mutual funds in 2013. That is over five times more than the amount of inflows into alternative mutual funds in 2012.[19]"
That shows just how much demand there is for these funds.

In his commentary (recent news section), David mentioned remarks given in a speech by Norm Champ, director of the SEC's Division of Investment Management, to the Securities Industry and Financial Markets Association, as briefly reported here:
http://www.investmentnews.com/article/20141029/FREE/141029914
Presumably, this speech will be posted soon on the SEC website. In the meantime, I suspect it will have covered many of the same points that Mr. Champ made in speeches to other professional organizations earlier in the year. By coincidence, I just happened to have the June speech in my MFO Working File already, and so I found and read the September speech this afternoon as well. I have pulled out some things from each to give you a flavor of what's inside, but there is much more, including pricing issues, conflicts of interest, expectations and additional fiduciary duties of BDs who decide to oversee these new contraptions, and some adumbration about compliance challenges that advisers may face re. liquidity, leverage, and risk management (and the transparent and timely reporting of such).
June Speech to Private Equity Forum
http://www.sec.gov/News/Speech/Detail/Speech/1370542253660#.VFK_j4dYVVU
"Recently, investment strategies that have historically operated in the private fund space have started to appear in the mutual fund area. This morning I will discuss the growing use of alternative investment strategies by open-end mutual funds; a burgeoning industry that had over $300 billion in assets as of the end of May 2014, according to Enforcement’s Risk Analysis and Surveillance Team. [...] I will discuss three broad topics: (1) alternative mutual funds, (2) the potential benefits and risks associated with these funds, and (3) some new developments within the Commission and the Division regarding alternative mutual funds. [...] I would like to highlight today a few key ’40 Act issues that are raised .... I will offer some observations on how to approach the regulatory issues associated with valuation, liquidity, leverage and disclosure."
September Speech to Hedge Fund Management Forum
http://www.sec.gov/News/Speech/Detail/Speech/1370542916156
"In contrast to private funds, mutual funds are subject to registration and regulation under the Investment Company Act and (in most cases) their shares are registered under the Securities Act of 1933, which means that they can be offered to retail investors. [...] many hedge fund advisers are becoming involved with alternative mutual funds, either as sub-advisers to funds launched by traditional registered investment company managers, or by launching their own registered investment companies. [...} alternative mutual funds present heightened risks in all of the areas that I just mentioned – compliance programs, conflicts of interest, valuation, portfolio management, and marketing."
"While fiduciary duties and disclosure are also key elements of the Investment Company Act, the Investment Company Act regime imposes many additional, substantive restrictions. For example, Section 206 of the Advisers Act [new laws governing private/hedge fund behaviors] permits an adviser (or an affiliate of an adviser) to engage in a principal transaction with a fund or other client, provided that the client consents to the specific transaction after receiving full disclosure of all material facts. By contrast, Section 17(a) of the Investment Company Act generally prohibits such transactions for a fund, not only with its adviser, but with any affiliate of the fund, or with any affiliate of an affiliate of a fund. Furthermore, Section 17(d) and Rule 17d-1 under the Investment Company Act generally prohibit an adviser to a registered fund, or any other affiliate or affiliate of an affiliate of a registered fund, from engaging as principal in any “joint enterprise or other joint arrangement or profit-sharing plan” in which the registered fund is a participant, without first obtaining an exemptive order from the Commission. The breadth of these provisions can capture many types of transactions and arrangements, and may present concerns for advisers who manage registered and private funds alongside each other."
"I encourage private fund advisers to proceed thoughtfully and cautiously before becoming advisers to registered funds. [...] a private fund adviser may need to make significant changes to its compliance program in order to take on a registered fund client. Merely “tacking on” new policies and procedures to the adviser’s existing program, without considering the overall impact to the adviser’s business model, may increase the risk of compliance weaknesses, deficiencies or violations."

The pain-to-gain threshold is very interesting. The health care funds seem to be a recurring theme. Seems like a 5-10% stake continues to be prudent.

I should have mentioned it would be in an IRA. No K-1 that I'm aware of.

CTF is trading at a nearly 20% discount to NAV.
Some have suggested it should be restructured:
http://seekingalpha.com/article/2569765-nuveen-long-short-commodity-total-return-fund-should-be-restructured
However, that's a commodity futures CEF that's trading at a nearly 20% discount to NAV. There is the potential for capital appreciation is commodities bounce back and, if something happens (restructuring, etc) narrowing of the discount, although there is certainly no guarantee on a restructuring happening.

FYI: (Click On Article Title At Top Of Google Search)
Commodities are an outlier at a time when most asset classes—stocks, bonds, real estate—are at or near record levels. Oil, the most important global commodity, is down 18% this year, to $80 a barrel, and many others, including natural gas, copper, and corn, are also in the red. Corn is down more than 50% from its 2012 high, to $3.75 a bushel. On Friday, gold hit a new 2014 low of $1,171 an ounce and is 38% below its peak of $1,900 in 2011.
The sector has few fans, a far cry from the situation in 2008 when oil hit $140 a barrel amid talk of structural shortages and a commodity supercycle. The current disfavor ought to pique the interest of contrarians. This could be a good time to allocate money to commodities, especially for investors with little or no exposure to the group
Regards,
Ted
https://www.google.com/search?newwindow=1&site=&source=hp&q=commodities+buy+when+the+world++baron's&oq=commodities+buy+when+the+world++baron's&gs_l=hp.3...1350.15835.0.16157.39.38.0.1.1.0.76.2135.38.38.0....0...1c.1.58.hp..17.22.1264.wUfyd1rpzU4

Hi Charles and others,
It was in my thinking that the recent October pull back was a set up for the fall stock market rally by big money. By doing some selling big money forced some margin calls on other investors which in turn forced prices even lower as some failed to meet their calls and pony up more collateral … and, with this, they were sold out of their positions. I felt third quarter earnings would be strong and thus far they have been and stocks would run. Thus far, they have. In addition, some fearful investors sold and those investors with a stronger mind set bought.
Old_Skeet got on the coaster and averaged in with five buys which averaged about 1905 when all was done. Currently, I am a happy camper with a gain of about six percent on this spiff as of the 31st. Should the S&P 500 Index reach a target of 2100 by year end then this spiff will have returned a little better than ten percent.
Within my portfolio's asset allocation I reduced cash by about five percent and raised my allocation to equities by about five percent. I figure a good number of mutual fund's capital gain distributions will be heavy this year and with this I will automatically rebalance as these distributions are paid as I take all fund distributions in cash.
Some may say, I got lucky … Perhaps so, perhaps not. Thus far, it was the correct read.
Should equities continue thier upward price march into and through the first quarter of 2015 then I may sell some more off into this strength. I'd like to be five to ten percent light from my neutral allocation to equities come summer. After all, we have a blue moon coming on July 31st.
Old_Skeet

Once again, I am totally with Ted. To date, I have never been presented with any objective evidence that any investor needs a L/S fund as part of a diversified portfolio.
Of course I have been presented with sales pitches like this one from Altegris, but they lack any objective evidence for their promotion. Please look at the track records of the Altegris funds which have had underwhelming returns but overwhelming expense ratios: ELSIX (actual ER: 3.55%) , FXDIX (ER 2.06%), MCRIX (ER: 2.02%), MFTIX (ER: 1.65%), MULIX (ER: 3.09%). Two of their funds have had decent returns -- RAAIX (ER: 2.05%) and EVOIX (ER: 1.69%) -- but they are not conventional L/S funds.
Clearly L/S is a troubled investment space as there have been very few LT winners to date -- limited to BPLSX and HHCZX -- and far more losers which have only enriched the managers of the funds with their pricey expense ratios.
Kevin

OK, here's the S&P 500 included.

Maybe this bodes well for AKREX, since M* is showing that 2 of the analysts are now portfolio managers along with Chuck Akre

Here's a performance comparison of the 2 funds:

Seems like his former analysts have not done too badly. I should have included the S&P 500 with this. Maybe I can add it

Typically, I hate equity markets in October. This time, however, the volatility paid off.
Back above 10, 50, and 200-day moving averages.
Conditions blue =).

US Aggregate bonds loosing a bit of steam, but still up healthy for year...