Interesting development here: https://businesswire.com/news/home/20220419006059/en/Osterweis-Expands-Fixed-Income-Suite-With-Sustainability-Focused-Zeo-Capital-Advisors

So this battle I think has been brewing for a while. Things have escalated. Michael Hasenstab is the manager of the fund along with Calvin Ho. Morningstar recently downgraded Templeton Global Bond A (TPINX) to neutral. TPINX has $7.7 billions in assets; it used to have a lot more. I have owned GIM for a long time. Not sure what to say.
from the Proxy:
AN ACTIVIST HEDGE FUND, SABA CAPITAL MANAGEMENT, L.P. (“SABA”), IS TRYING TO TAKE OVER YOUR FUND, POTENTIALLY DEPRIVING YOU OF AN INVESTMENT VEHICLE. SABA HAS TAKEN A LARGE POSITION IN YOUR FUND AND IS ATTEMPTING TO TAKE COMPLETE CONTROL OF THE BOARD OF TRUSTEES OF THE FUND (THE “BOARD”) FOR ITS OWN BENEFIT
WITHOUT REGARD FOR OTHER SHAREHOLDERS. SABA ALSO ANNOUNCED ITS INTENTION TO PRESENT A
PROPOSAL TO FIRE THE FUND’S MANAGER AT THE MEETING, WHICH WE BELIEVE MAY LEAD TO SABA
NAMING ITSELF AS THE MANAGER, ADDING TO SABA’S GROWING LIST OF CONFLICTS.
I am sorry but I am not able to attach a link to the proxy.

This formerly stellar conservative ETF was off 8.61% YTD before today. With a slight .11% gain today, it’s still down 8.5% YTD. I’ve long watched it; owned it briefly earlier this year before discarding it. The fund allocates 30% to equities and 70% to fixed income. For comparison, after today the Dow Jones is down only about 3.5% YTD and the S&P about 6.4%.
What’s the point here? Only to demonstrate the remarkable degree of carnage the bond avalanche has wrought upon previously fine funds with a reputation for “preserving capital”. - Yeah.
Question? What does the future hold for AOK and a whole legion of formerly considered “safe” funds with similarly heavy fixed income / bond holdings? Do you ever expect them to recover their former safe haven status? Get back to “break-even”? When might that be? I haven’t looked at target date funds, but must assume that those structured for capital preservation (late in life investors) have probably lost more this year than their more aggressive brethren.

Caught the interview of Brian on the "entertainment" Mad Money show. Found a few interesting comments from the CEO of BOA that have broader market implications:
Cramer: Americans have a lot of dry powder and that can keep us out of a recession.
Moynihan:
*March 2022 vs. 2021. Consumers spent 13% more and 8% more transactions.
*April 2022 vs. 2022 Consumers are spending more than 18% in April and this exceeds inflation. Faster spending.
*Consumer accounts with 1-2K now have $3,500 in their checking account.
*Consumer accounts with 2-5K in their accounts now have $13,000 in their checking account
*Card spending is up 33% in early April vs. 2019 for those earning >50K
*People are earning more and being paid more
*Travel and restaurant spend has been constrained and people have been saving!
*"Investors say don't fight the Fed, I always say, don't fight the US consumer"... "loan balances are down and they have plenty of spending capacity".
The US economy has been constrained due to COVID... despite inflation and Ukraine, the US is much better positioned to have a strong economy this year. Makes you wonder why there's so much financial commentary on the positive outlook of International stocks and funds. I remain unconvinced and think the best values still lie in domestic funds.
Cramer: "America has the edge on the rest of the world... that's the secret sauce that explains a great deal of todays' gains."

Situation is worse than that of Wuhan back in 2020. Several large industrial cities are being affected and production for Tesla and Foxconn have stopped as OJ posted above.
The worst is the Chinese vaccines are barely passing the WHO benchmark with low 50% effective against COVID versus Pfizer/Moderna vaccines (90+% effective). It is nearly impossible now to buy the large number of western vaccine dosages. China’s GDP number will be considerable lowered this year.

https://www.sec.gov/Archives/edgar/data/313212/000174177322001131/c497.htm
497 1 c497.htm
T. Rowe Price Emerging Europe Fund
Supplement to Prospectus and Summary Prospectus dated March 1, 2022, as supplemented
Effective Monday, May 9, 2022, the T. Rowe Price Emerging Europe Fund will close to new investors. Accordingly, the summary and statutory prospectus are supplemented as follows:
In the Summary Prospectus and Section 1 of the Prospectus, the disclosure under “Purchase and Sale of Fund Shares” is supplemented as follows:
Effective at the close of the New York Stock Exchange on Monday, May 9, 2022, the fund will close to new investors and new accounts, subject to certain exceptions. Investors who already hold shares of the fund at the close of business on Monday, May 9, 2022, may continue to purchase additional shares. -End of Supplement Text----
Section 2 of the Prospectus is supplemented as follows:
CLOSED TO NEW INVESTORS
The fund is currently closed to new accounts other than investors whose accounts meet any of the following criteria:
· Participants in an employer-sponsored retirement plan where the fund already serves as an investment option;
· Direct rollovers from an employer-sponsored retirement plan to a new T. Rowe Price IRA;
· Accounts held directly with T. Rowe Price that qualify through participation in certain T. Rowe Price programs;
· T. Rowe Price multi-asset products (such as funds-of-funds);
· Discretionary accounts managed by T. Rowe Price or one of its affiliates; or
· Wrap, asset allocation, and other advisory programs, if permitted by T. Rowe Price.
Shareholders with existing accounts may make additional investments and reinvest dividends and capital gains so long as they own shares of the fund in their account. Shareholders who own the fund through an intermediary should check with the financial intermediary to confirm eligibility to continue purchasing shares of the fund.
The fund’s closed status does not restrict existing shareholders from redeeming shares of the fund. However, any shareholders who redeem all fund shares in their account would generally not be permitted to re-establish the account and purchase shares unless they meet one of the above criteria. Transferring ownership to another party or changing an account registration may restrict the ability to purchase additional shares. In addition, the fund’s closed status does not restrict an existing investor’s ability to convert from one share class of the fund to another, provided the shareholder meets the eligibility criteria for the other share class.
The fund reserves the right, when T. Rowe Price determines that it is not adverse to the fund’s interests, to permit certain investors to open new accounts in the fund, to impose further restrictions, or to close the fund to any additional investments, all without prior notice.
The date of this supplement is April 18, 2022.
F131-042 4/18/22

In emerging markets category, TRAMX - T Rowe Price Africa & Middle East Fund up 12% YTD. Top Quintile for 1-10 yrs.
https://www.wsj.com/market-data/quotes/mutualfund/TRAMX

I got in on 31 January. Pretty happy. Already missed about HALF of the YTD gains... 8% of portf. right now.

@msf said “Divs are a mix of return of capital (ROC), regular income, and UBTI. So UBTI is only a part.”.
That’s very encouraging. It the very high income distribution from some MLPs that led to my initial concern / question. From your comment it sounds like the UBTI would likely represent only a portion of the total dividend payout - so I can’t see where a modest investment in one of these would lead to tax issues in my case.
The point re non-profits is understood.
Wow! The discussion and knowledge gleaned here far exceed my original part A and B question. Thank you for the replies.

@Graust, I think we’re on the same page. Some of these MLPs crank out double-digit interest (through dividends). Seems to be a big part of their appeal. That’s the part Some of that that may get passed through and not taxed at the corporate level. Capital appreciation, if any, is a separate matter and not affected by the regulation as far as I can tell. Whether income from dividends = UBTI I’m uncertain - but likely the case.
Thanks

- Re “I'm not clear about what you find special regarding pass throughs in IRAs. Mutual funds are pass throughs. REITs are pass throughs.”
My (evolving) understanding is … with a traditional corporation the entity has already been subject to / paid taxes at the corporate level. With MLP’s they have not. (See citation below.) You are, in effect, legally part of the corporation, and hence, responsible for paying tax.

That's an explanation of why pass throughs, such as sole proprietorships, partnerships (including MLPs), S corps, and mutual funds are taxed at the owner level. But it doesn't say why pass throughs are special in IRAs.
Unrelated business income tax was created so that non-profits did not compete unfairly with for-profit businesses. Think of colleges. They may run their own businesses on the side, businesses that have nothing to do with their non-profit mission of educating students. If those side businesses fell under the school's non-profit umbrella, then they'd have an unfair advantage over their for-profit competitors. Thus, UBTI is identified and taxed when run by non-profits.
Put these two concepts together - passing income taxation through to the investor and taxing non-profits for running businesses on the side. What you come up with is non-profits and other tax-favored owners (such as IRAs) getting taxed on UBTI of the pass through entities (e.g. MLPs) they own.
See, e.g. https://www.wec.cpa/media-hub/does-your-organization-have-unrelated-business-income

Fortunately, I think, the investment would be small enough that I’m quite confident the dividends paid out over one year would not reach $1,000 based on the MLP’s history. Dividends are paid quarterly so there would be ample opportunity to monitor and adjust.

Divs are a mix of return of capital (ROC), regular income, and UBTI. So UBTI is only a part.

- Interesting article (linked by @msf) re mutual funds. I suspect most managers avoid MLPs not wanting to add tax complexity.

What I was trying to convey was just that mutual funds are themselves pass through entities. So what you were describing (about how pass throughs' income had to be taxed at the owner level) applied equally to mutual funds as o MLPs.

But, if I understand correctly, exceeding the $1,000 limit by even $1 would lead to taxes being owed on all $1001 of the UBTI. (Doesn’t seem fair)

Somewhat like a bank not reporting $9.99 of interest but reporting $10. Though you're supposed to pay tax on that either way. Another analogy: Medicare premiums - increase your income by $1 over the threseholds and you'll have to pay a sizeable IRMAA surcharge.

Many foreign funds have the PFIC issues and IDV is no exception, https://www.ishares.com/us/literature/tax-information/pfic-2021.pdf
Basically, rules for the US funds to hold physical assets (real estate/property, bullion, etc) are different from those for foreign funds. So, to make things even, there are US PFIC regulations. These require that unrealized gains related to physical assets flow through earnings/income and some related realized losses also be distributed. THAT makes distributions variable for the US investors.

Thanks, Yogi. I just learned another lesson in how incredibly crazy, arcane, complicated and stoopid the US Tax Code is. ;)

Many foreign funds have the PFIC issues and IDV is no exception, https://www.ishares.com/us/literature/tax-information/pfic-2021.pdf
Basically, rules for the US funds to hold physical assets (real estate/property, bullion, etc) are different from those for foreign funds. So, to make things even, there are US PFIC regulations. These require that unrealized gains related to physical assets flow through earnings/income and some related realized losses also be distributed. THAT makes distributions variable for the US investors.

We live in a fascinating world where fixed income is treated as a source of capital gains!

While technically correct, Fido shows monthly distributions for FIPDX at $0.000000001-0.000000002/shr and M* just calls it $0/shr (it tracks dividends to 4 decimal places only). There is a noticeable yearend distribution (from tiny coupon and inflation-adjustment) that gives it 4.91% TTM.

Thanks for looking into this. It seems that Fidelity has muddied things a bit.
To three decimal places, the fund paid $0.531 "distributions from net investment income" for 2021, and $0.000 in "distributions from net realized gain" (per the annual statement). Fidelity's web page shows this distribution under neither dividend history nor under cap gains history.
Contrast that with T. Rowe Price (PRIPX), which also declares daily. Price reports a large dividend payment in December, as you described. At least this makes a little more sense.

Respectfully I disagree. Hindsight is always 20:20 of course but here are some stats on VWINX and a few others over the last 3 year period. I have not looked at the 5 and 10Y stats but pretty sure that other funds have done better than VWINX in terms of higher APR, lower max DD and higher Sortino ratio
- VWINX: Max DD=8.6, APR=11, Sortino=2.33
- SFHYX: Max DD=3.1, APR=17.5, Sortino=6.29
- JHEQX: Max DD=5.1, APR=13.6, Sortino=3.37
- MAFIX: Max DD=7.5, APR=20.3, Sortino=3.38

Hi @stayClam, Are those monthly stats, rather than daily stats? Cause i see for the March 2020 draw down, using daily stats, JHEQX and VWINX had the worse DD (-19%) while SFHYX was the best. MAFIX was second best (-9%).
During the 2018 Q4 DD, MAFIX (-13%), JHEQX (-7%), SFHYX & VWINX (-5%).
Seems like SFHYX protected better over several DDs. My comparison of these funds may not be fair to the managers as these funds provide different strategies - may be SFHYX and MAFIX have comparable strategies.
Edit: upon re-reading, I noticed the underlined word (fair) was missing and is now added.

$1.5 billion in assets X 1% expense ratio = $15 million annually.

And in bad years, like 2020, when his fund dropped (47%)...Bruce still collected 1% in fees...$7.5 million-ish. But that's true with every fund manager. They get paid in both up and down markets.

https://smartasset.com/investing/charles-schwab-says-now-is-the-time-to-add-this-asset-to-your-retirement-portfolio
Why Will Bonds Recover Now?
"There are a couple indications that Schwab analysts say point to a buying opportunity.
The bond yield curve jumped and has maintained a high level, which means that the market is already discounting a fast pace of Fed rate hikes. Even though the Fed has only raised interest rates once thus far, the yield curve signals a lot of future rate hikes being priced in–so many, in fact, that the number of hikes would have to extend into 2024 to make sense.
Another indicator is the real level of inflation affecting the economy. Due to rising commodity prices, Schwab analysts expect inflation to remain high through the end of the year, when levels should ease again in response to changed Federal Reserve policy. The economy already appears to be cooling, as rising interest rates moderate housing demand and capital goods expenditures."
Anybody else buying this argument?

The only munis I follow are the short-intermediate high yield ones. IMHO they are bottoming right now. PRIHX will be off nearly 7% YTD after today’s small drop. Depends on what muni(s) you own. But, generally speaking, states are flush with cash. Pension funds are in the best shape they’ve been in for years. I’d not be selling their bonds at this point. But that 5-7% on I-Bonds sounds nice if you want to lock up a sum for a year. (I knocked a couple % off the advertised rate because there’s a penalty for unloading within 5 years.)
Thanks for adding to the thread @BaluBalu. :)

Not sure if we've hit bottom on the munis, their dip seems to be lagging the taxable space...but definitely moving into excellent buying opportunity. The best market moves I've made in my entire investing life was going big into Vanguard HY corporate on its lows and same with Vanguard HY Tax exempt mainly when people thought that market was going to implode. Just keep buying more and either you will get capital appreciation, higher yield or both. Yes, I know, rates could just keep rising to the sky...but if that happens then all our plans will be laid to waste, not an investing strategy IMO. Just need to be patient, and collect the income while you wait.

With a lot of discussion about folks building up cash %age, note that fund flows into equities have not slowed this year, while flows into bond funds are negative (redemptions, no surprise there!) and to my amazement, flows into money market funds are also negative this year. The latest 3 mo flows out of MM funds is twice as much as the outflows from bond funds. This data is from Fidelity.
(I also wanted to bump up this thread lest folks forget about it when rates start going down for a few days.)
Outflows from MM funds is an interesting phenomenon when total outflows from MM plus bond funds together constitute 50% more than the inflows into equity funds. And working folks are constantly earning new money and so, I expect MM funds to continuously have inflows. Are folks starting to draw down MM funds to fill their online savings accounts + buy (treasury?) bonds directly? or is there a bigger phenomenon such as private equity + venture investing + multiple home / rental real estate + alternate assets investing?
In the last 4+ years, the only time MM funds saw this much (or bigger) outflows is during the last six months of 2020 when folks were buying first bond funds and then equity funds with both hands, drawing down the trillions of $$ of MM funds built up during the first six months of 2020.

These used to be FPA funds. 3 managers from FPA split in November 2020 from FPA and took their funds to a new partnership/joint-venture called Phaeacian Partners with the UK's Polar Capital (55% owner). I am surprised about the liquidations so soon.
https://www.barrons.com/articles/why-a-top-international-value-fund-has-a-new-name-but-same-strategy-51605715976
https://www.phaeacianpartners.com/