Things have been very volatile, very recently. When stocks zoom, bonds suffer, or at least go nowhere. Your PTTRX and DODIX are great choices. But if you want to stay ahead of inflation, you need to own some stocks.
I'm retired (too early,) and will be 59 in the summer. Wife works, and with my too-small pension, we're ok. I'm about 50/50 stocks/bonds. I have no need to draw on the investments yet. They say the 'buy and hold' strategy is dead, but I make changes rarely. My bonds are in DLFNX and PREMX. And I own one "balanced" fund with both equities and bonds: MAPOX. Generally, stocks are more volatile than bonds, but over 5, 6 or 10 years, stocks always win, hands-down. I seriously want to alert you to the fact that to pile all your stuff in just 2 specific funds is quite risky.
I'm extremely happy with two of my newer holdings (bought-in in 2012:) MAPOX and MSCFX, both Mairs and Power funds. My others include SFGIX, MACSX, MAINX, MAPIX, TRAMX. The way things happened was not the way the textbooks would have you do this stuff. I'm "barbelling" PREMX and MAPIX. The other holdings are much smaller in proportion to those two.
"Break a leg."

Reply to @scott: Very interesting and informative thoughts - thank you for sharing!
I've not been actively monitoring MFO for a while, so hope my follow-up questions are not redundant ones. Would you mind sharing more specifics on the type of investments you would be favoring at this time beyond the Yacktman reference?
I concur with the notion of owning real assets but didn't know if you have any specific fund examples you might be comfortable mentioning?
Lastly, at a macro level for a more moderate type investor, is there an approximate percentage of a portfolio you'd be comfortable holding in multisector bond funds like PIGIX, PIMIX, etc.? I've been favoring what I call aggressive fixed income type funds (e.g., FNMIX, TGEIX, DBLEX, TTRZX, MAINX, etc.), though some have been lagging recently. I'm not giving up on them though I do want to monitor how things go. I've also been dabbling in some FI oriented CEFs, as I don't foresee Mr. B. raising short-term rates for a while yet. Please feel free to comment on this FI approach.
TIA,
- Scooterj

Reply to @scott: Cool stuff Scott. Thanks for finding...

I too learned when doing the Matthews Asia MAINX piece last month that when it comes to funds that invest in Asia, houses like Aberdeen may have different offerings for investors in say London or Hong Kong than those available to US investors stateside.
On the recent MFO Seafarer teleconference with fund manager Andrew Foster, he alluded to Seafarer "the business" growing outside the pure fund. Perhaps private accounts or trusts, like your Witan Pacific Investment announcement above.

Thanks Scott. I see GAP up 5% today on heavy volume. I did not realize it has a $15B market value! Down day for Fairholme family though...and my house with it. All holdings down today but MAINX and RNSIX.

I hope we'll be able to access an audio file afterwards, as was done with MAINX? Thanks a million.

Mixed bag today. But this is not just about today. Over time, I'm quite pleased with MAPOX and MSCFX, and I'm finding that despite the recent downgrade by Morningstar, TRAMX today reached a new 52-week high. And I'm sure glad that when I began investing 10 years ago, I decided to buy shares in MACSX. Since then, MAPIX, too. PREMX is bucking headwinds these days, but I'm not dumping it---yet. It may be that I got into DLFNX at just the wrong time, rather recently, but it "covers a base" I did not have "covered" before: supposedly super-safe domestic USA gov't debt. It's just 2.6% of my holdings. ..... I'm still bar-belling with PREMX and MAPIX at the ends. In between the two: SFGIX, MAPOX, MSCFX, TRAMX, MACSX, DLFNX and MAINX.

Reply to @prinx: Howdy!
I work with Scottrade, I don't really trade much and I add new funds rarely. Over the long term, that means one fund swap a year or so (selling Artisan Small Cap to buy Artisan Small Cap Value, for instance). That's how Northern Global Tactical came into the portfolio; I liquidated my Leuthold Global holding to buy it. I'd held Leuthold pretty much since launch. In the last 18 months or so, there have been a number of particularly interesting new possibilities, so I've been a bit more acquisitive than usual. I sold much of MASCX to add MAINX and SFGIX, for instance, for didn't entirely liquidate MACSX. Closed out a money market to add RPHYX. Generally, that's a slow enough process that I don't annoy the custodians.
My normal expenses go through my bank, of course. My cash management accounts primarily hold vacation and emergency money: I make a single largish transfer from the account into a linked bank account once in a great while, then handle the day-to-day stuff out of the bank. RPSIX comes with a checkbook, which helps. Most short-term alarms are triggered when you hold shares for fewer than 90 days but the great bulk of my investment is in place for more than that, so it also seems amenable to the custodians.
That feels incredibly rambly. If so, sorry: grading Propaganda exams all morning.
And now, off to help Will with his National History Day project on the Beatles.
David

I think that is because of the assets gathered so far. Any fund in its incipient stage will change a very high fee unless the mgr is like Andre Foster of SFGIX, who reduced its expense ratio to a very competent level considering the economy of scale.
I think MAINX would reduce its cost as they accumulate assets. I hope it succeeds and consequently gather enough assets to reduce the exp ratio.

I have both of them. I sold a portion of my MAPIX and directed the proceeds to buy SFGIX.
Much earlier, I sold MACSX to buy MAINX and proprotionately increase my allocation to MAIPX to keep the stock/bond ratio as it is.
By the way, MAPIX is not the right fund to compare with SFGIX as it is 100% stock, whereas SFGIX is balanced fund (Growth and Income kind). It is more closely matches with MACSX, though investment geography is different by mandate.

It is good to see Vanguard is improving their target dated funds. On a different note, I look forward that Vanguard will introduce the emerging-markets government-bond index fund in the near future.
Matthews Asia Strategic Income, MAINX, which is quite compelling. However, its ER is higher than their equity funds.

Friends,
Hope folks find this interesting. I did and I don't know if it has been noted here before. A search of the site didn't produce any hits.
Me personally, I am a 47yo pre-retiree and have been increasing my EM bonds, High Dividen Yield equity and already have a 5% allocation to HY bonds. I look at these as equity replacement as opposed to bond alternatives which is how the author plugs them in to the portfolio. I also have a greater than 25% sleeve of Agg to add ballast but am worried about interest rates going up in 12-24mo. Am also looking to add MAINX and Matthews G&I for more EM equity/bond exposure.
Warm regards to MFOs.

Thanks, David, for your response. Thanks also to the MFO, I hold MAINX, SFGIX, and RPHYX from your portfolio.
Mohan

It's been vexing me for a long while now, which is why I haven't said much.
In general, I think a long-term holding needs to minimize manager risk and to accord a fair degree of flexibility to the manager. That is, I'd be reluctant to box someone tightly in. Beyond that, it needs to be as inexpensive as possible.
Beyond that, I think that the fund would have a fair and opportunistic exposure to growth drivers; that is, the ability to expertly harness things that demographic changes favoring the emerging markets or the prospect of tens of trillions in infrastructure spending. It's tough to have broad enough expertise, though, to do more than dabble dangerously in some of those niches.
So probably a tactical allocation sort of fund (mostly stocks with the opportunity to invest elsewhere), a strategic income fund (mostly fixed-income with the opportunity to invest elsewhere) and an emerging markets balanced fund (mostly e.m. equities with the opportunity to invest elsewhere, increasingly called "multi-asset" funds).
For what interest it holds, here's what I actually own:
Northern Global Tactical Asset Allocation (BBALX) - a very low-cost fund of index funds with a tactical overlay.
FPA Crescent (FPACX) - a reasonably low-cost fund whose manager famously roams over the world's capital markets, investing (successfully) here and there, in equity, debt and alternatives.
Matthews Asia Strategic Income (MAINX) - a reasonably low-cost package of Asian fixed-income with a dash of equities, managed by one of the bright younger stars in the best Asian manager.
T. Rowe Price Spectrum Income (RPSIX) - a low-cost fund of actively managed, income-oriented funds which offers a broad basket of global fixed-income funds with a dash (up to 20%) in dividend-paying equities.
Seafarer Overseas Growth & Income (SFGIX) - an Asia-centric, equity-centric emerging markets fund that diversifies outside of Asia, outside of equities and even outside of the emerging markets.
Matthews Asian Growth & Income (MACSX) - the Asia-only version of Seafarer.
I also have owned two Artisan funds from about the day they opened (Artisan Small Cap Value, Artisan International Value) and one cash-management fund (RiverPark Short-Term High Yield).
The collection is currently about 60% stocks, 15% cash, 15% bonds, 10% other. That's my non-retirement portfolio. The allocation is a bit risky for something with an indeterminate time horizon, but the managers are - on whole - really quite risk conscious so I've been happy.
For what interest it holds,
David

Hi, guys.
We've got a new gunslinger writing for us! Charles agreed to extend his already-striking analysis of Matthews Asia Strategic Income and it's now a striking part of our February cover essay. It's really good work.
Lesser highlights: profiles of the post-Dargan Artisan Global (ARTHX), Matthews Asia Strategic Income (MAINX) in light of our call and recent developments in the market and PIMCO Short Asset Investment (PAIUX), Bill Gross's cash management guy.
Some poking at Morningstar for the vagaries of their Analyst Rating system and the scariness of their small-fund choices, but also a celebration of their "buy the unloved" feature and some fascinating research on whether funds, ETFs or CEFs perform better in any given asset class.
A longish discussion of the Matthews call, with announcements of calls upcoming by or with RiverNorth (they're on their own), Seafarer (I'll be asking for your help soon) and Cook & Bynum.
And, well, other stuff.
For what it's worth,
David

David thank you for your summary of the phone call with Teresa. I have owned MAINX since last year and also added to my position today after reading your summary (It really is a great "diversifier" against my other bond holdings). Thanks again for your all of your great work here.
Dave C.

I want to add my Thank You to David and everyone else involved with the conference call. Teresa Kong's comments added to the list of reasons that resulted in my investment in MAINX a few months ago. Basically, the foreign bond segment of my taxable "retirement" portfolio (I am "retired" and withdraw a measured amount from that account each quarter) appeared to be under weighting Asia. MAINX appeared to provide a balanced way to increase my bond exposure to that dynamic region of the world. After the call, it continues to appear that way. The mix in that account will keep its equal parts of FNMIX, MAINX, DIBRX, and TTRCX for now.
Thanks again.
davfor

sligo, great observation. I suspect you are right, if M* were hosting the call, likely to get much more management oversight and rehearsed answers...one of things I really love about the MFO forum.
David, superb call. Ms. Kong is a class act. Really enjoyed her perspective on "index bias" that promotes investment in countries with highest debt versus countries that are more credit worthy, like Asia. Matthews has made a great enhancement to their fund line-up with MAINX.
Can't thank you enough.

David,
Great, great conference call; it really illuminated what they're doing at MAINX, very much to my satisfaction anyway.
I'd add to your #6 that TK said explicitly that they have no neutral position or target bands of allocation for anything, i.e., currency exposure, sovereign vs. corporate, or geography. They try to get the biggest bang for the level of risk across the portfolio as a whole, with as much "price stability" (she said that a couple of times) as they can muster.
The "Blackrock moment" was a hoot. I thought I noticed a little pause there where she was really, really trying not to say "an inch deep."
Cheers, AJ

Dear friends,
We spent an hour on Tuesday, January 22, talking with Teresa Kong of Matthews Asia Strategic Income. The fund is about 14 months old, has about $40 million in assets, returned 13.6% in 2012 and 11.95% since launch (through Dec. 31, 2012).
Here's the offsite link to an .mp3 of the whole call: 78449.choruscall.com/dataconf/productusers/mfo/media/mfo130122.mp3
I'd be delighted to hear what other folks consider some of the highlights. My list includes:
1. this is designed to offer the highest risk-adjusted returns of any of the Matthews funds. In this case "risk-adjusted" is measured by the fund's Sharpe ratio. Since launch, its Sharpe ratio has been around 2.0 which would be hard for any fixed-income fund to maintain indefinitely. They've pretty comfortable that they can maintain a Sharpe of 1.0 or so.
2. the manager describes the US bond market, and most especially Treasuries, as offering "asymmetric risk" over the intermediate term. Translation: more downside risk than upside opportunity. She does not embrace the term "bubble" because that implies an explosive risk (i.e., "popping") where she imagines more like the slow leak of air out of a balloon. (Thanks for Joe N for raising the issue.)
3. given some value in having a fixed income component of one's portfolio, Asian fixed-income offers two unique advantages in uncertain times. First, the fundamentals of the Asian fixed-income market - measures of underlying economic growth, market evolution, ability to pay and so on - are very strong. Second, Asian markets have a low beta relative to US intermediate-term Treasuries. If, for example, the 5-year Treasury declines 1% in value, U.S. investment grade debt will decline 0.7%, the global aggregate index 0.5% and Asia fixed-income around 0.25%.
4. MAINX is one of the few funds to have positions in both dollar-denominated and local currency Asian debt (and, of course, equities as well). She argues that the dollar-denominated debt offers downside protection in the case of a market disruption since the panicked "flight to quality" tends to benefit Treasuries and linked instruments while local currency debt might have more upside in "normal" markets. (Jeff Wang's question, I believe.)
5. in equities, Matthews looks for stocks with "bond-like characteristics." They target markets where the dividend yield in the stock market exceeds the yield on local 10-year bonds. Taiwan is an example. Within such markets, they look for high yielding, low beta stocks and tend to initiate stock positions about one-third the size of their initial bond positions. A new bond might come in at 200 basis points while a new stock might be 75. (Thanks to Dean for raising the equities question and Charles for noticing the lack of countries such as Taiwan in the portfolio.)
6. most competitors don't have the depth of expertise necessary to maximize their returns in Asia. Returns are driven by three factors: currency, credit and interest rates. Each country has separate financial regimes. There is, as a result, a daunting lot to learn. That will lead most firms to simply focus on the largest markets and issuers. Matthews has a depth of expertise that allows them to do a better job of dissecting markets and of allocating resources to the most profitable part of the capital structure (for example, they're open to buying Taiwanese equity but find its debt market to be fundamentally unattractive). There was an interesting moment when Teresa, former head of BlackRock's emerging markets fixed-income operations, mused, "even a BlackRock, big as we were, I often felt we were a mile wide and [pause] ... not as deep as I would have preferred." The classic end of the phrase, of course, is "and an inch deep." That's significant since BlackRock has over 10,000 professionals and about $1.4 trillion in assets under management.
We'll work on an updated profile (written and audio) for February.
If other folks could offer either amendments or additions, I'd be grateful for your impressions.
As ever,
David

Howdy folks,
I've been a fan of the House of Matthews for going on 20 years. I still feel they're the best way to play Asia. They've got very conservative pan-Asian funds that include Japan MAINX Strategic Income, MACSX Growth & Income (bought some in wifeys Roth several months back.). MAPIX is Asian Dividend and for higher risk, MPACX Asian Growth or MATFX Asian Tech. All of these funds cover all of Asia so you get Japan and China, but also Korea, Indonesia, etc. You're playing the pacific basin and it looks like a good long term play.
peace,
rono