FYI:
Regards,
Ted
http://news.investors.com/print/investing-mutual-funds/040214-695709-vanguard-founder-john-bogle-speaks-out.aspx

Bruce Fund
Mannkind Cv 5.75% Portfolio Weight % 5.42
http://portfolios.morningstar.com/fund/holdings?t=BRUFX&region=usa&culture=en-US
I hold BRUFX as a core holding.Late to the party ,but I recently opened a small position in ETNHX for a pure BioTech play. Holds smaller companies than FBTCX and more readily available.

Not many managers claim to be selling protection. But, a nice straw-man for a reporter with time on his hands one supposes.
Hussman will sell you some. But it's costly. His flagship HSGFX is still negative over 1, 3, 5, and 10 year periods.
Can't help offering here that one can't have it all. If we're gonna dump funds after a year or so's under-performance and take our $$ elsewhere, than we're laying ourselves (and our managers too) a nice trap for when things suddenly turn and go south.

Hi Guys,
Not withstanding Ecclesiastes 9:11, in some instances the race often does go to the swiftest. Timely decision making and committed execution are primary assets in the investment universe.
Over the last week nothing much has changed in that investment world except that Michael Lewis’ book “Flash Boys” is now receiving wide publicity. The book is new; High Frequency Trading (HFT) is not. We have just been made more aware of its pervasiveness.
Being early into the marketplace is surely not a novel concept. The Rothschilds used carrier pigeons to secure a time advantage in the 17th century. Jesse Livermore practiced it all the time, and after he gained renown as a heavyweight stock plunger, he needed methods and ploys to disguise his intentions. Copycats have always existed. Today, the mutual fund houses (like Fidelity) deploy more sophisticate tactics to the same end.
The issue of HFT was ushered into the investing community with the development and introduction of computers into the financial marketplace in the 1970s. Decision making and execution speed have always been a powerful weapon in the professional investor’s weapon arsenal.
Algorithmic trading and HFT have been part of the investing environment since the 1980s. Like it or not, a tested and verified algorithm doesn’t take long to evaluate a dynamic evolving situation, and doesn’t make errors in execution. So it consistently generates superior outcomes than when a human being is in the loop. HFT became common in the late 1990s, and dominated the trading volume by the mid-2000s. In 2009, it is reported that HFT constituted roughly 70% of the daily trading volume.
I’m sure you guys remember the stories a few years ago that touted these HFT houses who located a few miles closer to the North New Jersey market computer facilities to benefit from a reduced hard-wire access physical distance. Now that’s really working hard to establish a microsecond trading advantage.
Recall the 1987 stock market crash. The most likely causes for that dire event were the popular use of the Black-Scholes Option Pricing model and the overused Portfolio Insurance concept. The primary causes for this fiasco are still debated however. Another example is that, after much detailed study, the May, 2010 Flash Crash was finally attributed to the HFT cadre. Recovery was all within a one day timeframe in that instance.
So far, recoveries seem to have been rapid, and the impact of HFT on a private investor’s end wealth seems limited; my zeal for the equity marketplace is not quenched by this disclosure.
One indisputable benefit from all this computer technology is that trading costs have been substantially lowered. I remember the excessive costs I begrudgingly accepted in the mid-1950s when I bought my first stock. Wow, the price to play was huge.
Are these HFT outfits gaming the system? Yes, but historically there have been financial adventurers who have always played in that dark arena. The SEC rules committee diligently tries to minimize their impact, but clever stock operators find and exploit loopholes. However, from a personal perspective, I suspect the money drains from these operations have little impact for my buy-and-hold style of mutual fund market participation.
So, I don’t get too exercised over Lewis’ new book. The book reviews suggest that the presentation is very asymmetrical; it is not a balanced research project. It has an agenda. At some point I will read it, but I feel that I need not rush.
Based on an aroused public, I’m sure one outcome from its release will be that various government agencies will expedite investigative efforts which have been under way for several years now. That’s goodness. Some rules loopholes will be closed, but just as night follows day, new loopholes will be discovered. As a group, investment professionals are forever searching for an exploitable edge, and they find it.
None of this dampens my enthusiasm for the US marketplace. It remains basically a fair game for small time investors. It is one of the few investment opportunities that offer a high likelihood of outdistancing the erosive effects of inflation. I’m more or less sanguine over the Lewis revelation.
I want to congratulate all the MFO contributors to this excellent exchange. Your diverse and carefully documented positions on this matter really added needed depth to the continuing HFT discussion. Thank you all.
Best Regards.

FYI:
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=641775

cman's comment on the likelihood of a misinformed public is very common today. I'll add "Climate Change" and "Autism" to that list. Most of these opinions are based on misinformation and emotion. I think it's human nature to form opinions quickly even if they are initially incorrect. The challenge is digging deeper (educate yourself) and reveal the true nature of the problem and hopefully design actionable solutions.
When it comes to the GMO debate I like to remind people how much starvation existed in the world due to a host of problems associated with growing food. To better understand the science (the facts) and engineering (the problem solving) that brought about GMOs I would suggest reader familiarize themselves the "The Man Who Fed the World", Norm Borlaug.
online.wsj.com/news/articles/SB10001424052970203917304574410701828211352

(On the other hand, Gundlach's DLFNX is in top 12% YTD, top 12% for the month of March, top 31% over the past year, and top 5%, looking 3 years back.)
M* has DLFNX in the "Interm. -Term Bond" category with DODIX and many others. DLTNX is ......... ALSO in that same category......?????!!!!! "Total Return" is a different animal, I had thought. Go figure...
ACTUAL performance between them:
YTD 1 month 1 year 3 years
DLTNX +2.24 -0.25 +0.79 +5.84
DLFNX +2.57 +0.14 +0.59 +5.85
I chose not to follow the crowd into DLTNX and went to the much smaller DLFNX. I couldn't tell you what the difference in strategy might be..........

Me too Hank.
Hey, how about this...most actively managed funds charge too much versus say VWELX or DODBX.
But, they charge what they think they can get away with...from their shareholders and boards.
Is it that simple?
Now, I do believe the industry has come a long way in reducing fees. Glancing over a list of 50 Large, Common Stock Mutual Funds from the mid 70s, I see most of them had front loads of 8.5%. Yes, in addition to the 1% management fee Ed mentions, plus admin fees.
And, for what it is worth, I believe transaction fees are lower, certainly for stocks and I suspect for MFs too.
But at the end of the day, the fees of most actively managed funds remain too high given their below average performance.

FYI: Follow-up Article.
Regards,
Ted
http://www.etf.com/sections/monthly-etf-flows/21695-vanguard-utterly-dominates-q1-etf-flows.html

@mman: I watched the most recent Wealthtrack interview last night, as an interested day one investor, having been very happily invested with David Winters in Mutual Beacon.
I was pleasantly surprised when Consuelo Mack asked him about the expense ratio, and very disappointed with the answer. If I recall correctly, he said something like 'when you go to the doctor or the money doctor, you don't want to hire the cheapest you can find, but the best you can find.' I thought that lacked humility and even accuracy, considering his 1, 3 and 5 year performance as listed on Morningstar.
He continued by saying that the vast majority of mutual funds are just closet indexers, hewing very closely to an index.......and that he doesn't do that at all; he manages very actively and, and something to the effect of 'this sort of thing is very expensive.'
I scratched my head in wonderment. What on earth is he talking about? I agree with you 100%. If he had a team the size of Dodge & Cox, I could understand it. If he had stock analysts with offices in Asia, Europe, far and wide, scouring the globe for undervalued investments, I could see it. What does he do that costs so much money?
The icing on the cake.....I did not appreciate his next statement at all.......he said something to the effect that he felt that the fact that they offer lower expense Institutional shares made up for the higher expense ratios. First of all, the institutional shares charge a 1.63% expense ratio, still expensive, and require a $100,000 minimum investment. And second, that is not showing a lot of regard for those of us not in the institutional shares. He did not win any points on that answer.
So your point is very well taken: if he only has 8 employees total, and 4 investment professionals, I think the $30MM in fees you stated (I calculated $25.5 MM) is not acceptable, and they should lower the 1.85% (per M) expense ratio. How about something like 1.00% to 1.25%? That should be quite sufficient.

Great job as always. Those 4 featured funds should send u a little something for the free pub and funds that come their way!
I love the idea of the model portfolio of the best funds.
Maybe one for Age 35, Age 55, Age 75..........

FYI:
Regards,
Ted
http://www.nanex.net/aqck2/4456.html

FYI:
Regards,
Ted
http://www.bespokeinvest.com/thinkbig/2014/4/1/sp-500-back-at-all-time-highs.html?printerFriendly=true

FYI:
Regards,
Ted
http://www.marketwatch.com/story/doubleline-total-return-lags-53-of-peers-in-march-2014-04-01
http://www.marketwatch.com/story/pimco-total-return-lagged-95-of-peers-in-march-2014-04-01-13912112/print?guid=5B28F55B-C518-4521-9C4F-C93F140CADCE

SPY continues to climb, despite "dips" along the way. Volume seems to be falling off a bit on up days. At this rate, 8% for year? =).

AGG too, now up above 10, 50, 200 day averages, although it seems to be looking for direction:

Looks like @ $160MM in assets will be going over to MJFOX. That's about 1/3 of MJFOX's current size. I assume there is overlap between the funds, so turnover might be limited.
Kind of meh from a Matthews' investor point of view, but great news for those who hold Namura's turkey with its 1.85% ER and 5.75% front load.

Pretty good article...

What went wrong for risk-parity funds in 2013, and how concerned should investors be going forward? For one thing, a long-expressed concern about risk-parity funds--that their leveraged exposure to bonds is exactly the wrong stance in the face of a potential secular rise in interest rates--reared its head when the bond market slumped at midyear on fears of early tightening by the Fed. While bond exposure remains a longer-term issue, it wasn't the only problem. Indeed, risk-parity strategies are designed on the assumption that not every asset class will be cruising at the same time, and stocks certainly held up their end of the bargain.
Commodities were another story. Many of the models likely assume that rising inflation usually accompanies falling bond prices, a positive for commodities. But that wasn't the case last year. Not only did inflation remain tame, but demand in key markets such as China continued to slacken. In contrast to the merely de minimis returns of the Barclays Aggregate Bond Index last year, commodity indexes generally lost money (the Dow Jones-UBS Commodity Index lost 9.5%, for example), and the active strategies used by certain risk-parity managers in some cases lost even more than the indexes.

But I think it concludes a bit too politically correct, based on my (poor) experience with AQR Funds...

More broadly speaking, the recent difficulties of risk-parity funds point to the challenges that advisors and investors face integrating outcome-oriented investments (such as many alternative strategies) into traditional, benchmark-oriented portfolios. As much as investors in theory may favor the notion of curbing downside risk and improving diversification, when they see the S&P 500 rocketing skyward they are likely to wonder, "Where's my beta?" Thus, it's incumbent on fund companies and advisors to properly educate investors on the purpose of vehicles like risk-parity funds, and to point investors to a wider array of benchmarks and risk-adjusted metrics (such as Sharpe ratio and beta) than the standard stock-only comparisons.

Basically, I found that when AQRIX was doing well, the firm was quick "to properly educate investors on the purpose of vehicles like risk-parity funds..." But when things headed south, the classroom door shut and communication about strategy shortfalls, lessons-learned, and needed improvements stopped completely. The emperor appeared to have no clothes after all...the strategy was just a black box!
Honestly, I remain intrigued by risk parity and other alternative strategies. Just need to ensure more shareholder friendly fund houses/managers, which I find in WBMIX, ALSIX, and RGHIX...to name a few.
It is when strategies are not doing well (and that will happen to all funds at one time or another) that its managers need to "educate investors" the most. So, with that foot-stomp (and venting), I believe Josh Charlson is spot-on.

Here are a couple of other choices to look at in this area:
Lazard Global Listed Infrastructure GLFOX - 5 Star Fund with strong results so far and only 15% US stocks. A bit cheaper than TOLLX and a better yield.
Northern Multi-Mgr Global Listed Infrastructure NMFIX - Management is split between Brookfield and Lazard as sub-advisors along with a couple of managers from Northern. Expense is .99%

FYI: How about forgetting forever !
Regards,
Ted
http://news.morningstar.com/articlenet/article.aspx?id=641507
Barron's Slant: http://blogs.barrons.com/focusonfunds/2014/04/01/risk-parity-funds-have-risks-too/tab/print/