One of the things I’ve noticed on MFO Premium and Morningstar results is anything with technology held up well in 2020 and has skewed volatility rankings when searching for something less volatile lately. It’s probably skewed things for 10 years, but doesn’t look like it will work going forward if this trend continues.

I charted three approaches:
100% VWINX (larryB Portfolio)
90% / 10% VFINX / VFSTX (Bufffet Portfolio)
100% PRWCX (Moderate Allocation Fund)
If we are at high valuations VWINX would provide the best downside protection, but over the long term not the best choice for capital appreciation.
I tend to like the historical performance of a fund like PRWCX. Historical performance doesn't repeat , but I tend to think it rhymes.
1988 -2022 (starting with $100K and a 4% WD rate):

200-2022 (from Tech High) (starting with $100K and a 4% WD rate):

@david - tks
Here is the two part exercise I did
(1)Screened for international funds older than 5 years, Sortino > 2 and APR > 10. PRWCX Sortino and APR for past 5 years are 2.33 and 15.2 respectively
(2)Run a correlation matrix on the result set with PRWCX
The highest correlated are
WCM Focused International Growth Inst (0.87)
Brown Capital Management International Small Company Inst and WCM International Small Cap Growth Inst both tied at 0.85

I scanned for funds with high five-year correlations to PRCWX and high international exposure. I'm not arguing for or against them, but I'll note the Pax Sustainable Allocation (PAXWX, formerly Pax World) and Fidelity Advisor Multi-Asset Income (FAYZX) have correlations in the 90s with TRP and double-digit exposure to international equities. Both are lower vol / lower return (12% APR vs 15% for TRP) over the past five years but the correlation implies the possibility of some comparable thinking.
The oddball is Prospector Capital Appreciation, which was launched by TRP Cap App's long-time manager (Richard Howard, who left after 7 years) to be a more nimble version of the fund. Fairly high correlation (93) and slightly more international, but distinctly weaker performance (50% greater volatility, 50% lower Sharpe, trailing by 350 bps).
And yes, I am supposed to be writing two lectures for tomorrow's first-day-of-term classes. (sigh)

If an investor does a tax-free conversion of one share class of a fund into another share class, e.g. investor class to admiral class, there are no tax consequences.
But if an investor sells one fund and buys another, even if the second fund is a clone of the first, two taxable things happen:
1) If this is a taxable account, the investor may recognize gain on the sale, and
2) The old fund may have to sell assets to satisfy the redemption, and in the process generate cap gains that may be distributed to the remaining (old) fund shareholders.
That's what happened here. The employer plans were not exchanging share classes in the same fund, but were literally selling shares of one fund and buying shares in a virtually identical but separate fund.
---
The simple response to your second observation is yes, that's generally correct. The complete answer is a bit more complicated.
Any fund, whether active or passive, ETF or open ended, can alter its portfolio holdings in a couple of ways:
1. Sell the old holdings, buy new ones. This could generate cap gains if the old holdings have appreciated.
2. (a) When investors want to redeem shares, instead of handing them money, hand them back the old holdings that the fund wants to get rid of. Yes, even OEFs in theory (but rarely in practice) can do redemptions in kind (see link below). For an ETF, the bundle of holdings that the investor receives is called a "redemption basket".
https://www.dodgeandcox.com/redemption_disclosure.asp (D&C redemption baskets)
(b) When investors want to buy shares, rather than using cash the fund (ETF) requires the investor to hand over a bunch of new holdings. This bundle of holdings is called a "creation basket".
Usually the creation basket and the redemption basket are the same, but they don't have to be. This gives the funds the ability to tweak their holdings, handing off old holdings it doesn't want and taking in new holdings that it does want.
I doubt this is how a passive ETF would deal with a full index reconstitution, but I could envision it being used to replace a single security. So just because an ETF wants/needs to change its portfolio, it doesn't have to recognize gain on the old holding(s).
(From iShare IG Corp Bond ETF LQD's prospectus: "Creation and redemption baskets may differ ...")

The best solution for MFO members would be if Giroux would start up TRP International Capital Appreciation, but alas I don't think that's happening !

unusually high capital gains ... has ... drawn scrutiny from regulators
debate over whether target-date funds are suitable for taxable accounts
The high Vanguard distributions were the result of a technical change Vanguard made. It lowered the min for institutional funds, thus triggering a mass selloff by small company plans as they migrated from retail clones into the institutional funds.
Once one realizes this, the two statements above come off as a nonsequitor.
Suppose that instead of target date funds, Vanguard had lowered the min of VITPX from $100M to $5M. (For the sake of argument, assume VITNX, VSMPX, and VITSX did not exist.) One would expect to see a similar migration of small employer plans from the retail fund VTSAX to the institutional clone VITPX.
This in turn could trigger a large cap gain distribution to the remaining retail investors. VTSAX has unrealized cap gains amounting to about half of the fund assets, according to M*.
Surely one would not suggest that a total stock market fund was an inappropriate choice for a taxable account, just because a poorly planned change could could trigger a torrent of recognized cap gains.
This is a completely different question from whether target date funds are suitable for a taxable account.

And thanks to all of the folks who made it happen.
Quick intros to Devesh, msf and The Shadow in the publisher's letter, plus bits of ARKK Snark and perspective on January.
Snowball profiles Intrepid Income and updates the bang-for-the-buck capture ratio essay from February 2020
Devesh begins what promises to be a long conversation on managing inflation risk and msf takes on risk ... uhh, risk. Charles's look at funds that didn't draw down last year (remarkably few) and did have a positive return; David Sherman's name keeps coming up.
The Shadow casts his eye on industry developments and Lynn Bolin echoes the "don't let volatility scatter your wits" theme in his piece of analysis paralysis and portfolios.
Some old features are - manager changes, funds in reg, launch alerts - are either on hiatus or wrapped into other features. If you'd like to change that or revive them, you're more than welcome to join the crew!
Cheer the guys on, poke them as appropriate, and join the conversation if you can.
As ever,
David

Several past posts:
1) "MSF describes it—blend—a blue chip stock with its heady growth days in the past.
"Agree with msf and Lewis assessment. The fast growing business (iPhones, computers, music, and AppleTV) since Steve Jobs's returned has plateaued. In some area Apple is trailing."
2) "Growth is about revenues, cash flow and earnings versus the benchmark and industry peers and it’s forward looking, not from five or ten years ago."
FD: reality check. After another year. Apple proved it's not just another blue chip stock. It's even more amazing to do it when it's so big already.
Apple 2021 annual EPS was $5.61, a 71.04% increase from 2020. The price followed.

At 1.25% (from the current 0.25%) is still a way below the 2% when the pandemic started in March 2020. In combination with tapering, perhaps it may contain the 6% inflation.

With the Q's down 10+% for the month AND ARKK arguably invested in the most speculative issues within them is anyone really surprised that her fund is being crushed as it is? Do you give her credit for sticking with her investment thesis like you do for Hussman and Grantham who have been wobbly wrong for how long again? Arguably she does stick her views and opinions right out there nearly begging for it but so do many others.
BTW - her fund pulled in some additional $168 million in January to date.
Matt Murray, WSJ: "Over the past week, with prices in Cathie Woods’ ARK Innovation ETF back at mid-2020 levels, investors have put about $168 million into the fund, boosting its net assets to $11.8 billion—a noteworthy vote of confidence for a fund that has dropped 27% this month and lost half its value over the past year, as its brand of investing in largely unprofitable, untested firms has fallen out of favor. "

I bought ENIC using my TRP brokerage account. On Friday, they PAID a very small "interim" dividend. It's still not recorded in my sweep account.
[...]
.....But it's not there....... yet. ORK!

Are you sure that the ADR div has been paid?
Here's a div announcement sheet from Citi saying that ordinary shares were to pay on Jan 28th, but the US ADR payment date was TBA (as of Nov 29th).
Looking at the last time there was a small Jan div (record date Jan 24, 2020), the pay date was two weeks later (Feb 7). Assuming that pattern holds, given that the record date now is Jan 21, 2022, one would expect to see the div paid about a week from now.
Here are sites giving the ADR div's historical ex-, record-, and pay-dates:
Citi, M*, and Dividend Investor, the pay date for the ADR has not been determined.
Ordinary shares underlie ADR shares: https://www.sec.gov/investor/alerts/adr-bulletin.pdf

Hope not too OT. Interesting article in recent WSJ (probably Friday’s) about how the Robinhood / Reddit crowd devastated hedge fund Melvin Capital. (I realize it’s hard to feel sorry for Melvin.)
Melvin had shorted a bunch of meme stocks (like Gamestop, AMC) ) because all their sophisticated analysis indicated these stocks were ripe for picking (overpriced). I got the impression literally millions of small investors banded together via internet forums to drive these stocks sky high. Melvin nearly folded. Didn’t understand at first what had hit them as the numbers seemed so out-of-whack. Clawing their way back now. Still in the red. But the power of irrationality compounded by internet forums is truly amazing - albeit a bit frightening.
Old news? Yes. But the degree of organization / coordination was really highlighted in the referenced article.
* Came across the membership of “Wall Street Bets” (website) where a lot of the coordinated effort originated: 11 million members Jan.1, 2021 according to the WSJ. That was up from 2 million the prior year.

Maybe it is just me but still don’t see the fear associated with past declines of this magnitude. It is all about buying dips and potential buys. Although not into analogous year investing, this reminds me a bit of 1973. There we had weak January performance after a double digit gain in 1972. Like now the weakness was due to rising oil and commodity prices and inflation fears with a Fed that was about to aggressively raise rates. We then embarked on the longest and deepest bear market since the Depression.
@BaluBalu. As you saw another bad day for the junk bond OEFs a bit surprising in light of the strength in the major equity indexes. Many of the bank loan funds were lower too. The latter began acting suspiciously earlier this week so I said goodbye. That leaves me at 70% with the usual suspect of IOFIX which at least so far has survived the carnage elsewhere and up YTD. The play there though seems pretty much over. Wish I could buy its younger albeit less stellar performing sister which has yet to have a down month since its October 2020 inception, but not available to me at TD Ameritrade. Kind of following in the footsteps of IOFIX which has been positive every month but five over the past 6.67 years. Of course one of those five was a doozy for those that stayed the course.

High yield effective yield has popped over 5%. Per FRED, last time it was at that level was November 2020. Could be looking at a spike that'll eventually be a good reentry point.

Quick peek . Appears around Sept 20,2020 the fund took off ! Will it continue, is now the question ?

For those waiting on better valuations to buy Equities, at what point would you be a serious Buyer? Do you have a specific plan in place?
What about Bonds (yeah, what about Bonds) - are any type/class of bonds worth holding in 2022?
Current S&P 500 PE Ratio: 25.85
Mean: 15.96
Median: 14.88

If you are on the sidelines congrats. Don’t see much fear in this market just everyone wanting to buy the dips. A lot of complacency. I guess that is what the past twelve years have conditioned investors to do. Should we actually get something more than a garden variety correction ala late 2018 and February/March 2020 would use a Zweig momentum buy signal to get back in. Worked like a charm after those two brief sell offs as well as the longer bear of 2008.
As for bonds the scary consensus is buy floating rate/bank loan funds as they are the place to be during periods of rising short term rates. Can’t argue with that ( and I have an allocation there) other than it seems a bit too pat and overwhelmingly embraced. If you get a really bad bear market in stocks/junk bonds, the floating rate/bank loan category will not protect you,

Without drilling deeper for month end distribution dates, month end NAV movements are always tricky to make sense of for fixed income OEFs but I see across the board both high yield and floating rate / bank loan funds are down on Thursday. It has been a long time since I have seen that happen. I hope this is not the start of something.

With what Lewis said, also check out this radio interview. The manager of BIVIX, Ali Mottamed, seems to know his stuff.
http://www.strategicinvestorradio.com/e/longshort-strategy-investing-invenomic-capital-management-wali-motamed-cfa/

Correction is 10% loss;20%loss is bear market;50% loss is a crash. 2020 qualified as a short-lived bear market-perhaps computerized trading will lessen the length of bear markets going forward.