@davidrmoran Yes. For this new "portfolio at the margin" of my overall portfolio, AOM probably provides a decent benchmark. For my overall portfolio, I am using the following this year:
FSTVX 30%
VXUS 20%
VBTLX 22%
PTIAX 22%
RPHYX 6%
The RPHYX accounts for a near cash set-aside maintained to assure the availability of cash for the 3.5% annual withdrawals drawn from the portfolio (withdrawn in quarterly segments based on the prior year-end portfolio balance). It really takes a full market cycle to evaluate things, but I like to check in with a reference benchmark along the way.

Quick responses:
RSIVX - this will undoubtedly sound like 20/20 hindsight, since I'm not on the record with my impressions when the fund was announced. Nevertheless, I was skeptical because it sounded like it was being promoted as an extension (in bond maturity) of the RPHYX strategy. That didn't (and doesn't) make too much sense to me.
RPHYX buys bonds that are somewhat like pre-refunded bonds - the money is there and all you're waiting for is for the clock to run out. With RSIVX you're saying that the bonds are "money good" because the company is worth enough (book value?) to cover the bonds. But with a longer time frame, stuff happens. The type of research would seem to be different. For RPHYX the difficulty is in finding and acquiring lots of little pieces. For RSIVX you have to dig more deeply into the companies.
Either I misunderstood (and continue to misunderstand) the fund, or the marketing was based on reputation. Either way, I wasn't inclined to look more closely at this fund, especially since it wasn't a good match for the type of fund I was most interested in. Doesn't mean it isn't good, just means I haven't looked enough.
WCPNX - I listed it because it had shown up in some recent screening, though I couldn't tell you exactly what parameters I used. The cursory check I did you already read - management that I recognized, cost, performance. I may have been going by the name. I agree that those low numbers are not suggestive of a core plus bond fund. But I'd like to look more closely at its portfolio history before saying more one way or the other.

@msf Thanks for these careful thoughts and list, very much appreciated. FWIW, right now I look to bonds for ballast, so I'm only in RPHYX and SUBFX. In the past I invested is LSBDX and did okay, but since it was in a taxable account, it felt more sensible to have that money in equities for that kind of risk/reward curve.
If you like RPHYX, what do you think of RSIVX? It hasn't gotten a lot of love on this board since David's initial write-up, but it seems to be doing what it promised: providing a little less return than standard high yield bond fund with quite a bit less risk.
I'm tempted to put some money in it that I expect to need for a down payment in 2 years or so.

Much of what the fund does is buy "remnants", bonds with a few weeks of life left. It's something like picking up coins on the sidewalk - it's free money, but there's just so much and it's time consuming to fetch.
That makes this, as Prof. Snowball wrote, a niche market. You don't get large competitors moving in because it isn't worth their while. But you also aren't seeing boutique competitors entering the market.
With a supply that small, one expects increasing demand (even if it comes just from RiverPark) to diminish the value of what it can find. To continue my analogy, it's like having a few nickels and pennies lying around. After picking up the nickels, there's still free money, but the effort to fetch additional coins now gets you less than before.
If you run around faster (more investors) trying to pick up the nickels, you'll just exhaust the nickels. The process doesn't scale - at any moment there are just so many nickels (bonds) to go around.
The problem here is not that a specific fund will get too large, but that the market demand as a whole will get too large and returns will suffer. It may still be positive (pennies to fetch), but perhaps no longer worth the risk.

@msf: Thanks for your write on bonds. One question when you get time to reply.
RPHYX. " I still don't think it scales, so it is good that this is closed."
I'm missing your point. Would you draw me a picture, so to say.
Thanks, Derf

Short lists and explanations in 2nd half below.
I invest for total return, not income. That leads to the question I keep asking myself, so why invest in bonds at all, when equity does better over the long term?
One reason is diversification - one never knows what will do better from one year to the next. Using bonds for this purpose is a bit like buying insurance. It costs you money (bonds won't do as well long term), but it provides protection against short term drops in the worst case.
I buy that, but only to a limited degree. So I'll use more aggressively managed bond funds that include areas like high yield that are more equity-like. (That is, I favor core plus and multisector over vanilla core funds.) I'm not giving up quite as much in return, but I'm also not getting quite the diversification benefit that a vanilla fund would provide. It's how I choose to position myself on the risk/reward curve. Each person has his or her own comfort level.
With that same nod to aggressiveness, I also use bond funds as cash alternatives. Obviously this is a different type of bond fund from those used for total return.
General attributes I would like the funds to have :
- Low costs. Really important in bond funds, where correlation between performance and cost is high.
- Convenience, but I'll only pay a little for that. I've no problem paying $5 to Fidelity to buy more of a TF fund. On a $5K purchase, that comes out to 0.1%, often less than the cost of owning a different fund that's NTF, especially over longer periods of time.
Personal dislikes:
- Leverage. I'm fine with 100% exposure to risk with my investment. Don't give me 150% risk exposure.
- MBS. The fact that there are several pricing models shows that these are hard to value. More important is that with their built in call options (early payoffs), they behave badly when yields shift quickly. A rise in rates causes borrowers to hold on to their mortgages, thus increasing duration and amplifying the drop in bond price. (Negative convexity.) A side effect is that duration numbers for these securities can be deceptive. They're good diversifiers in a broad bond fund; I just don't want a fund hooked on them.
Macro observation: I almost never time markets. But one must pay attention to the fact that we've had a 35-40 year decline in interest rates that has begun to reverse. IMHO the question is how fast and how far that will go, but not if. This makes it important to watch how interest rate risk is handled.
=============
Core plus funds (nothing without some blemishes):
- BCOIX - good performance, low cost. Flexible with credit risk (i.e. it's core plus), it can't do much about duration. "The Advisor attempts to keep the duration of the Fund’s portfolio substantially equal to that of its benchmark."
- MWTRX - you used to be able to get MWTIX with a $25K min at Schwab. Now it's $100K. Retail class is slightly pricey. Years ago, managers contrasted their fund with Pimco Total Return by saying that they had the luxury of focusing on issue selection, while Gross was limited to macro calls due to the size of his fund. Now MWTRX is bloated and performance has declined over the past three years. Still fine management.
- DODIX - cheap, good performance, flexible on credit risk, defensive on interest rate risk. All positive. Not a fund I would have thought of as core plus (my impression was more vanilla), but upon closer look has a nice mix of securities. Main concern is its increasing popularity and girth.
- WCPNX - just started looking at this (see MFO thread for others' thoughts). Slightly pricey (0.61%), but FWIW, NTF. More importantly, I was impressed a few years ago (last time I looked) with Weitz Short-Intermediate (now Weitz Short Duration) fund WEFIX. Same managers here. I also like that this fund has a somewhat short duration. Needs more research.
- EIBAX - Gaffney's been there for 2.5 years. She didn't do well at her first EV charge EVBIX. Perhaps she was trying too hard to prove herself, but she got overly aggressive, loading up with equities and commodities. This is a tamer fund, though still wild. Hard to even call it a core plus, given that it's allowed 35% in junk and 35% in foreign. That describes a multi-sector fund, leading us to ...
Multi-sector funds (the usual suspects) - used for manager-allocated exposure to junk and foreign bonds.
- PIMIX - sharp manager, great past performance, but with qualifications I've already noted, like leverage and a fondness for MBS. Also, what happened to all the voices who seem to cry out "mean reversion"? (Here though, there are specific market conditions that one can point to that suggest lower returns going forward.)
- LSBDX - a manager who claims experience in investing the last time interest rates rose; that raises succession as a concern. Ridiculously volatile, but acceptable to me for something this far out on the portfolio risk curve (aggressive multisector). I like that it has shortened its duration. A quirk in its prospectus allows unlimited Canadian investment, perhaps a way to increase non-dollar exposure without going overseas.
- FSICX - an easy buy if you use Fidelity, else costly. Generally solid fund.
"Enhanced cash"-ish bond funds - used as buffer for equity investments (to draw from when funds have dropped in value)
Muni funds - you need to go out at least a couple of years in duration to get yields high enough to justify skipping the bank account.
- BTMIX - a young fund, but with a solid management team that's been around a long time
- VMLTX - Vanguard = low cost, conservative management
Taxable funds
- RPHYX - pricey, but with a unique strategy that keeps it sufficiently ahead of banks to justify the risk. I still don't think it scales, so it is good that this is closed.
- FPNIX - I've followed this since the Rodriguez days, when you couldn't get it without a load. Now you can, but Atteberry may have tamed the fund a bit too much. Where else do you find interest only derivatives used so extensively for defensive purposes? That dates back to Rodriguez.

No money in any of the funds mentioned; but curious as to total returns.
The time frame is from May 31, 2011 to current date.
http://stockcharts.com/freecharts/perf.php?ZEOIX,LALDX,RPHYX&n=1627&O=011000

I'm still haunted by what happened to many money-market plus / ultra-short bond funds in 2008. By pure luck, I didn't lose anything then (I sold my Schwab ultra-short bond, just before it cratered, because I needed the cash) but these all make me nervous. I do own RPHYX since David's write-up convinced me it is truly different from other ultra-short junk funds. ZEOIX looks more typical. I'd feel better if it had a record that extended back through 2008.

I was looking at the MultiSearch and Dashboard results for ZEOIX. After consulting their website (ZEO now has a real website) ZEOIX looks like a superior mattress to me. (that's a compliment). What puzzled me on the Premium toosl was the characterization of David's take on this fund as "mixed". It was actually Chip's take but that's fine. I just can't find anything mixed in the 2014 description of this fund. It look entirely positive. Have I missed a subtly stated reservation? (other than saying this fund is not for everyone. But neither is RPHYX, with a "positive take". )

I was looking at the MultiSearch results for ZEOIX. After consulting their website (ZEO now has a real website) ZEOIX looks like a superior mattress to me. (that's a compliment). What puzzled me on the MultiSearch tool was the characterization of David's take on this fund as "mixed". It was actually Chip's take but that's fine. I just can't find anything mixed in the 2014 description of this fund. It look entirely positive. Have I missed a subtly stated reservation? (other than saying this fund is not for everyone. But neither is RPHYX, with a "positive take". )

There's a subtle implication made when stating that a fund is miscategorized. It suggests (however slightly) that the fund was put into the wrong category, as opposed to there not being a category for the fund. This is reinforced by the use of "peer group", implying that every fund does in fact have a group of "peers".
For example, ISTM that BCHYX is miscategorized. It is grouped with California long term munis. While BCHYX certainly holds Calif. long term munis, I respectfully suggest that its salient feature is that it holds long term muni junk. That would make its peer group (long term) HY munis.
Contrast that with the situation that RPHYX is in. Given the existing category systems (Lipper, M*), into which category does it best fit? If the answer is "none of the above", then would you create a singleton category for it? What purpose would that serve? Note that M* already has a category for nontraditional bonds. That's a clear marker for funds that don't fit anywhere else and are not comparable among themselves (though M* still insists on giving these funds star ratings).
If BMVIX is miscategorized, then it would seem so is its sibling BSVIX, with the same manager and about 2/3 overlap between their portfolios.
Any classification system has limitations. And no two funds are strictly comparable (well, except for funds like BMVIX and BSVIX :-) ). Ultimately, one should look at each fund based on its distinctive attributes.
Identifying funds that are "miscategorized" does aid in informing people that some funds are "more unique" (ack) than others. In short, thanks for the informative list.

We thought we’d start catching up with the 130 U.S. equity funds which have passed their second anniversary but have not yet reached their third, which is when conventional trackers such as Morningstar and Lipper pick them up. As Charles has repeatedly demonstrated, the screener at MFO Premium allows you to answer odd and interesting questions. I’ll try to look at several questions over the next week, starting with “which of these new funds might be badly miscategorized?”
That’s an important question, since investors tend to buy the (Morning)stars. In general, that’s an okay decision: five star funds rarely become stinkers, one star funds rarely become gems. Except when a fund has gotten dropped in an inappropriate peer group, so that Morningstar is looking at a banana and trying to judge it as an apple. Our two favorite examples are RiverPark Short Term High Yield (RPHYX) and Zeo Strategic Income (ZEOIX). Both are outstanding at what they do: generate low single-digit returns (say, 2-4%) with negligible volatility. And both get one star from Morningstar because they’re being benchmarked against funds with very different characteristics.
How did we check for miscategorized funds? Simple, we get our screener to identify all U.S. equity funds that had been around for under three years. We downloaded that to Excel, eliminated funds with under two years of history then sorted them by their correlation to their peers. We found that over half of the funds were indexes or closet indexes (correlations over 95, with some “active” funds at 98). Just six funds, three active and three index, had correlations under 75.
Cambria Value and Momentum ETF (VAMO, as in Vamoose?) has the lowest correlation (0.43) with peers of any of the two-year-olds; Lipper thinks it's a large cap value fund. Why should you care? Because a low correlation with the peer group raises the prospect that a fund has been miscategorized and it makes it very likely that any rating it receives – positive or negative – will be unreliable. One illustration of that possibility: 5 of 6 six low correlation funds trail their peer group with VAMO lagging by 14% annually. Does that mean they’re bad funds? No, it means that its strengths and weakness can’t be predicted from its peer group.
The other two-year-olds with peer group correlations under 0.75 so far:
HTDIX Hanlon Tactical Dividend and Momentum Fund (Lipper: Equity Income)
PTMC Pacer Trendpilot 450 ETF (Mid-Cap Core)
BMVIX* Baird Small/Mid Cap Value Fund (Small-Cap Core)
PTLC Pacer Trendpilot 750 ETF (Large-Cap Core)
FSUVX Fidelity SAI US Minimum Volatility Index Fund (Multi-Cap Core)
Note: BMVIX is actually just shy of 2 years through October, but I want to touch on it for December commentary.
Next up: two-year-olds leading their packs.
David

The 3Q commentary for RPHYX is now available here: http://www.riverparkfunds.com/Funds/ShortTermHighYield/Commentary.aspx
Somebody else can explain this more clearly, but my quick takeaway is that the manager is concerned about the Fed's stated goal of raising interest rates, and is thus choosing to significantly shorten the duration of the portfolio at the expense of higher yield.

I agree with nearly everything hank wrote. The one exception is the juxtaposition of these two bullet items:
- Short term rates have risen since 2011, albeit not by much. But compared to a half-percent back in 2011, the near 1.5% available in money market funds today looks better than it did by comparison in 2011. And rates are expected to rise further.
- Recent SEC mandated rules on money market funds have arguably made them safer in comparison with RPHYX than they might have appeared back in 2011.
What the SEC did was bifurcate MMFs into safer ones (government MMFs) and ones with higher, or at least different, risks (prime MMFs). The risks are different because they may now slow redemptions or impose redemption fees in times of stress.
I've talked with Fidelity about this, and as near as we can figure out (didn't get a clear answer), it's possible to be charged a redemption fee for merely writing a check. This can happen if you're using a prime MMF (position fund) as a backup for your core account, and that check draws from the prime MMF at a time it's imposing redemption fees.
The safer funds (second bullet item) are government funds. These pay less than prime MMFs, and none is currently above 1% (first bullet item). Very close though (0.99%), and worth considering for their added convenience if the one you want is available NTF at your usual brokerage.
Current top MMF rates:
http://www.barrons.com/public/page/9_0204-trmfy.html

I searched the fund and found volumes of discussions dating way back to July, 2011.
Hear’s one of the earliest - Riverpark Short-Term High Yield Fund Looks Like A Great Place to Park Money: https://mutualfundobserver.com/discuss/discussion/748/riverpark-short-term-high-yield-fund-rphyx-looks-like-a-great-place-to-park-money
Another early discussion - Riverpark Short-Term High Yield Fund - What Role in Your Portfolio?: https://mutualfundobserver.com/discuss/discussion/3384/rphyx-riverpark-short-term-high-yield-what-role-in-your-portfolio
With the proviso that I’ve never owned this fund and have only a limited understanding of the methodology employed, I’ll nonetheless venture a few thoughts:
- Short term rates have risen since 2011 - albeit not by much. Compared to a half-percent back in 2011, the near 1%* available in money market funds today makes them appear better in comparison than in 2011. (*near 1.5% corrected to near 1%)
- New SEC rules governing money market funds have made them safer in comparison with RPHYX than they might have appeared back in 2011.
- Both equities and high yield bonds have appreciated greatly since than. I haven’t heard a knowledgeable observer dispute for months that spreads between investment grade debt and high yield are about as narrow today as they’ve ever been.
Re #3 above - A manager in a distressed debt fund likely has been confronted with two choices since 2011: (1) reach for yield and compromise portfolio quality, or (2) settle for lower (relative) returns while maintaining portfolio quality. Some of the comments regarding “underperformance” of RPHYX suggest to me, anyway, that the fund’s managers have elected the second choice in order to preserve investor capital.
While I don’t follow RPHYX closely, I periodically compare returns against TRBUX (investment grade ultra short) which I own. RPHYX has consistently outperformed my fund (though with a higher risk profile).
Is RPHYX still a good investment? As @msf and others have noted, it all depends on your overall investment aporoach and time horizon. How much additional risk are you willing to take on in your cash / cash alternative sleeve in pursuit of incrementally higher yield on that portion of your investments? Personally, I could construct a portfolio in which RPHYX would meet a need. Presently it doesn’t fit.

You can also read my responses in that thread. RPHYX has not had a single losing year, and only one losing quarter. Theoretically it should be impossible to outperform cash (under your mattress) 100% of the time while maintaining the same liquidity.
Put money at risk, any risk, and sooner or later a bad thing will happen (though perhaps not in your lifetime, let alone within your investment horizon). That includes putting money in banks (which can and do fail, freezing funds for short periods of time) and MMFs (which can break a buck and/or put a hold on your cash).
It's not a question of whether it is "worth taking risk" to outperform cash - if you want to generate any income from cash you have to take on risk. It's a question of characterizing the risks (lower return/loss of principal, volatility, liquidity), quantifying them, and then seeing if you're satisfied with the returns given the estimated levels of risk.
Actual performance of RPHYX does not appear to have been declining over the past three years. Its three year performance (as of Sept. 30th) was 2.20%, its one year performance was 2.32%, and its nine month YTD performance is 1.72% (which annualizes to 2.30%, though based on its October month-to-date performance is a figure that likely won't be achieved).

I wrote this post on RPHYX / RPHIX not too long ago: https://mutualfundobserver.com/discuss/discussion/35593/target-return-of-riverpark-short-term-high-yield-rphyx-rphix
Basically, RPHYX / RPHIX was originally billed as targeting a return of 3.5% - 4.5% a year, but the actual performance has been closer to 2.5% and declining. I still have a bit of money there but questioning whether it is worth taking risk for this level of return (and they do have risk, as 2015 showed).

I'm bumping up this thread, because there's great info in it, and I'm not the only one looking for cash alternatives right now.
Here's a new question: anyone know cash-alternative funds which have a track record that extends back through the 2008 global financial crisis? A whole lot of ultra-short bond funds crashed and burned then. I'd feel better parking my money with a manager who successfully navigated that crisis.
Of course PIMIX/PONDX did well, and Ivascyn is maybe the best bond manager around, but I don't really consider that a cash alternative. It takes lots of risks, and even if so far it has managed them brilliantly, I want something more conservative for this bucket.
Right now I am using RPHYX and SUBFX, and I'm happy with both, but neither has a record back to 2008.

Finally found a copy of the iMoneyNet taxonomy of enhanced cash vehicles:

• Cash plus funds - mark to market, seek $1 NAV, up to 180 day maturities
  
• Enhanced cash funds - floating NAV (like RPHYX), durations up to a year
  
• Ultrashort bond funds - floating NAV, durations 1-3 years

I'm still reading through the 10 page presentation. The list above came from graphic on p. 3.
http://www.imoneynet.net/mkt/pdf/2016-cpiwg.pdf

ISTM that enhanced cash is a poorly understood or appreciated type of investment, both generally and especially in light of poor execution and implosion in 2008. See, e.g. Schwab Yield Plus).
As the old (2006) Northern Trust paper linked to above points out, you should have at least a one year time frame in mind, otherwise stick with cash equivalents. Enhanced cash investments do come with risks. Personally, I do feel that that risk is worthwhile, if one understands the nature and magnitude of the risk. Especially in a taxable account where one has the option of writing off a (small) loss should that occur. Though in taxable accounts there are some good ultrashort muni bond funds that can come close to RPHYX in after tax returns.
I'm not sure how STB65 has managed to lose parked (as opposed to traded) money in RPHYX.
Monthly 2017 return figures from M* (Jan, Feb, ..., Sept): 0.29%, 0.18%, 0.23%, 0.19%, 0.20%, 0.13%, 0.14%, 0.12%, 0.24%.
Quarterly 2015-2016 figures (1Q2015, 2Q2015, ...): 0.64%, 0.48%, -0.36%, 0.10%, 0.92%, 0.86%, 0.91%, 0.59%.
Annual returns since inception (starting 2011): 3.86%, 4.20%, 3.39%, 2.65%, 0.86%, 3.31% (2016). 2017YTD 1.72%.
Repeating: you should have at least a one year time frame in mind.