That is the argument of indexers. It is indeed hard to find active fund managers who can beat the index over long term. Those who take the most risk would have greater
standard deviations in their returns, which means they may appear to be much better than everyone in some years. Having said that I do own active funds, but keep a close eye. The only funds which I have owned for a long time (around 10 years) are FPACX, OAKBX and MACSX. More and more of my portfolio (started off with about 40%, but it has increased to about 50% because it did better than the rest) is in ETFs. There does seem to be some short term persistence in performance which I try to exploit.

David:
Thanks for comment and suggestions.
Portfolio Visualizer ("PV"): http://tinyurl.com/dg-vd-sp-wm-lex
I would not have thought of either MOAT or LEXCX in this context.
In the "don't try this at home" department, putting on my "factor investor" beanie...
Looking (FWIW) at the funds mentioned, plus what I had thought was my "go to" option for quality (VDIGX), and running them through the Portfolio Visualizer factor-analysis tool since SPHQ converted to current index (and using the WMW ETN in lieu of the MOAT ETF, since the ETN has longer history than ETF)....
After expanding PV link above to see the stats re: significance....
DGAGX has negative significant size load, along 3rd highest high quality factor.
VDIGX appears to be the strongest quality 'play'.
SPHQ closely follows VDIGX in its quality load.
MOAT (nee WMW) appears to be 'only' market play, with a pretty poor fitting regression and lots of alpha - must be a slug of 'moatness'.
LEXCX is 'mainly' a market & value play (as opposed to quality, FWIW), having beaten pants off of the others except WMW recently, with high alpha.
Now craning my neck to look (again) out back, I see:
SYMBOL.....DGAGX......VDIGX.......SPHQ.......WMW.......LEXCX
3Y TR *......14.51%......18.31%......19.73%....23.18%....20.49%
RANK.........5.................4................3..............1..............2
* Annualized, Source FT.com
Note: FT Fund comparison: http://funds.ft.com/us/Fund-Comparison
Full disclosure, I have dogs in this hunt, having bought some SPHQ earlier this year, liking the ETF efficiency, expense, diversity and 'story' of SPHQ, versus relatively concentrated WMW or other choices - but have owned VDIGX since forever.
PS: Falling for the fracking fairy tale, also figure that the high industrial weight of SPHQ should do just fine, as our energy gulping economy learns to sneer "Saudi Aray-be who"?
Finally, I wonder if turnover, when fishing in the large cap space, is somewhat over-rated as an attribute. Think (really guessing) that the ETF tax efficiency outweighs the market impact penalty, when comparing a fund to an ETF.

And so they tell us: The Legacy share class "is open specifically for existing Meridian shareholders. For example there are well over 25,000 direct retail, advisor, and institutional shareholders in Meridian Growth (Meade and Schaub's small/mid cap growth strategy), Meridian Contrarian and Meridian Equity Income funds that have access to the Small Cap Growth Legacy share class. Our intent was to encourage existing shareholders to stay within with Meridian family, especially during a time of investment advisor transition."
Hope that helps!
David

Something tells me this one headed to Supreme Court.

Charles I think those -50% one day losses we saw yesterday on Fannie and Freddie could just as easily be +50% and much more one day gains if the courts change their mind and rule in favor of shareholders. The stock prices on those seem to be 100% tied to court and government decisions about Fannie and Freddie. The stocks could really go thru the roof if the decision is made to return the companies to shareholders and allowed to funnel their profits to them.
I think both companies have already repaid the government what was borrowed, have they not? I think Bruce has a very strong argument, and having Ackman on your side always helps.
I just wouldn't be able to handle the volatility and uncertainty of FAIRX. FAIRX is like a hedge fund now. Certainly better to pay 1% versus 2%/20%

FYI: Below is our trading range screen of the 30 largest country ETFs traded on US exchanges. For each country, the dot represents where it's currently trading within its range, while the tail end represents where it was trading one week ago. The black vertical "N" line represents each ETF's 50-day moving average. Moves into the red zone are considered overbought, while moves into the green zone are considered oversold.
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/10/2/hello-oversold-world.html?printerFriendly=true

FAIRX year to date: -7.3%
I think it will go down a fraction more than 1% today, giving it a YTD of between -8% and -9%.
Sears had a big up day. Fannie and Freddie extended their sig. losses.

FYI: Global risk assets got pounded this morning, with gruesome price action in European equities putting big pressure on US equity futures as well as emerging market equities. Selling reached a crescendo at 11:30 AM ET as closing bells rang across Europe. Within 15 minutes, US risk markets bottomed and by 1:00 PM US small caps were positive
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/10/2/what-happens-at-1130-again.html?printerFriendly=true

Mike, PZA has been a dandy closed end muni fund, a picture perfect tight rising channel and its YTD return of 13.67% is far ahead of the other investment grade muni funds and not far behind the 15%+ return of the big three in the open end junk space - EIHYX, ABTYX, and NHMRX. PZA is ahead of HYD, the junk ETF and close to HYMB the other junk ETF. As far as getting out easier, someday should talk about the one day lag effect with the open end vs. the ETFs and closed end. 2% looks OK albeit at this stage in my life and nest egg I use smaller stops. But then I scamper back in pretty quickly if proven wrong. By the way, you know this as well as anyone, but the dynasty appears in shambles and the Bills have as much chance as anyone in that division.
As an aside, I got an email today from a friend who is almost as heavy as me in open end junk munis. He pretty much told me to STFU. His point, and a good one, is except for munis and maybe non residential MBS, much of Bondville from corporate junk to emerging market debt, to investment grade looks to have topped. The jury is still out on Treasuries. His point is munis and junk munis could well be next in line in this stealth top in bonds so lets enjoy the ride with as few on as possible. I think what he was trying to say is the more we talk about our winners and what is working, the more likely we are about to experience an immediate drawdown. I completely agree and that is a superstition I have discussed many times in the past. So will quit posting until 1/1/15. I won't be reading the forum until then so anyone can contact me at my email of
[email protected]

it wasn't... bond funds accrue daily dividends in their NAV, not like stock funds.

@fundalarm and other MFOers, in that case, the daily dividends increase the NAV?
Take a fund like the Vanguard Total Bond Market Index fund, what can change the NAV besides interest rates going up or down? [note: supply/demand will change bond prices, but that will raise or lower interest rates/yields on those bonds]

Taking the second question first, since it's easier to explain - defaults can change the NAV. Just think Reserve Fund. Its Lehman bonds defaulted, and the NAV of this MMF dropped immediately (broke a buck). That's because the bonds became worth pennies on the dollar, and the interest rate on the bonds fell (not rose) to zero - all money that the bond holders got was repayment of principal - no interest.
Regarding bond funds and accruing dividends - the NAV does not reflect the declared but unpaid dividends after the record date. Rather, once a record day passes, the dividend is set aside by the fund (or company, in the case of a corp) and distributed on the pay date. For example, MSFT has said that people who own shares on Nov 20th will receive $0.31/share on Dec 11th. They'll get that dividend even if they sell their shares on Dec 1st.
The shares of MSFT will drop $0.31 on the ex-date - the first day that the shares trade without the dividend. The $0.31/share is not carried as part of the price (NAV, if you wish). Same idea with mutual funds. They're also companies that declare dividends, have record dates, and pay dates.
Generally, a mutual fund's ex-date is one day after its record date. See, e.g. D&C schedule here. If you were the shareholder of record of DODGX on Sept 24th, you got a $0.50 dividend Sept 26th. It didn't matter if you sold your shares on Sept 25th. You still got that check in the mail (well, figuratively speaking). And that $0.50 div on the share that you sold on Sept 25th did not accrue in the NAV. That money was put aside for your check.
So to answer your question - the NAV did not go up on Sept 25th because of the dividend. The shareholder buying the share ex-dividend got the share without the dividend (even though it hadn't been paid to you yet). That's what ex-dividend means.
Funds can have daily record dates - they just set aside the money until the pay date (typically the end of the month). The NAV is adjusted down on a daily basis because each day the fund goes ex-dividend. But that adjustment is usually so small you never see it. MMFs adjust their NAV downward daily (they declare dividends daily), but they "never" break a buck. They just set aside the little bit of interest that they earn each day and declare that the daily dividend. So the NAV stays at a dollar even.
Bond funds can also have quarterly record dates. Loomis Sayles Inflation Protected Securities Fund (LIPRX) still declares and pays its dividends quarterly. (Link is to 5MB prospectus; wait for full doc to load - link is to specific section.)

Interesting development.
http://www.cnbc.com/id/102049504

@Junkster
Yeah, well, mind that channel. Last time I took a glance, it was narrowing (or is it? it's hard to tell). :)
Junk munis a fickle lover be.
The lack of attractive alternatives could dupe you into staying too long, ya know?

I am hoping I have to pay off my wager to you if Treasuries close at 2%. A narrowing channel? With new YTD highs on multiple occasions recently in EIHYX/ABTYX/NHMRX among others? As for "staying too long, ya know" you obviously haven't a clue how I trade/invest as I never ever overstay a position when the tide turns as dictated by price. I will be gone before these things react by 1.25% to 1.50% maybe even less. EIHYX hasn't so much had even a 1% decline YTD on its march higher. Big price declines begin by small price declines. I fall in love with nothing in this "fickle" game, least of all my opinions. At the beginning of the year I was looking for rising rates and thought the place to be was floating rate/ bank loan funds
ala HFRZX. Look where that bright opinion would have gotten me.
http://www.mutualfundobserver.com/discuss/discussion/comment/34371/#Comment_34371

I would love to have access to DFA funds. Would definitely invest in them. But I'm not willing to pay an advisor for access to them, even if that is the 50 basis points you mention. And the 200 dollars a month that you mention.....seems outrageous just to get access to DFA funds.

RJB,
You raise a good point. There are some ways to get in. Scott Burns at Asset builder is one way. I think he charges 50 basis pts for 50k accounts. Flat fees portfolio charges 200 dollars-ish/month for the smaller accounts. I guess part of taking the plunge is hiring an advisor with access.
Best, Mike

Fannie Mae.
http://news.morningstar.com/all/ViewNews.aspx?article=/MW/TDJNMW20141001152_univ.xml
edit: Derp. I should read more posts...

What am i missing. If investor lawsuits were dismissed, WTF should the price drop? Isn't that good news for the stock? Shouldn't it go up?

Ouch..that really hurts. About 10% of the holdings took a 50% haircut. All the other holdings were also down. That's what a concentrated portfolio can you for/to you.
Won't sell right away, but may certainly reduce on a (dead cat) bounce.

FAAFX down 10.8%.

Fairholme Focused Income Fund FOCIX
-6.72%

Fannie Mae.
http://news.morningstar.com/all/ViewNews.aspx?article=/MW/TDJNMW20141001152_univ.xml
edit: Derp. I should read more posts...

it wasn't... bond funds accrue daily dividends in their NAV, not like stock funds. the decline you saw was a market decline - movements in spreads -- see my previous explanation.

Update for PIMIX / PONDX
---PIMIX, dividend of 0.05550 per share, declared on 09/30/2014
---PONDX, dividend of 0.05266 per share, declared on 9/30/2014

Yeah, but what is the ex-dividend date?
When was the NAV lowered as a result of the income coming out of the fund?
"Declared"?
Typically there is a Date of Record, An Ex-Dividend Date/Re-investment date, and a Payable Date.

Update for PIMIX / PONDX
---PIMIX, dividend of 0.05550 per share, declared on 09/30/2014
---PONDX, dividend of 0.05266 per share, declared on 9/30/2014

Yeah, but what is the ex-dividend date?
When was the NAV lowered as a result of the income coming out of the fund?
"Declared"?
Typically there is a Date of Record, An Ex-Dividend Date/Re-investment date, and a Payable Date.

I use DFA for a 529 account, but mainly managed MF's for other accounts.