Perhaps this is the difference between a fund selection approach vs a portfolio allocation approach. So, I will try to explain this a bit more in general detail because I think this is important for the correct use of the site tools.
First, I wasn't recommending HYD here which belongs to a relatively high volatility category. The fund itself just follows the category as an index fund. Particularly good for momentum players as the most liquid ETF in the category. As an index fund it follows the category unlike managed funds which might provide drawdown protection at the expense of upside like TSSAX for example in this category.
The premise of the calculations and ratings on this site favors the latter over the former to give better "numbers". But better risk adjusted numbers don't necessarily provide for a better total return at the end of an investment period. The longer the time period for investment, the greater the difference between the two where capital protection extracts its cost over the protection in bear markets in that category. This is why I prefer index funds over any highly rated funds here (as long as one is available) in long time horizons, with a glide slope to risk managed funds as the horizon gets shorter.
The point is that these numbers in the dashboard are good for comparing two funds that are otherwise similar in the same category but not to make absolute statements as to whether a fund should be used in a portfolio or not on its own which depends on the portfolio allocation strategy. It should never be used to decide between funds in two different categories ignoring the portfolio allocation strategy because one has a better risk group or return group ratings. It is a bit like treadwear numbers on a tire.
The case for the category of SHYD (and therefore this index in it) is in allocations where the volatility of HYD is too much to accommodate. Munis have been problematic in portfolios because the regular munis are priced for maximum tax benefits and so not great unless one can benefit fully from it at the highest tax brackets.
The high yield category has been an exception where the credit quality based returns lessen that tax-treatment spread. This is evident in things like HYD or TSSAX where the total returns were of interest even if one didn't get the full tax benefits.
The problem is that such HY munis have been too volatile for conservative portfolios and even some moderate portfolios. Same problem with HY corporate bonds as well.
The case for funds like RPHYX or STHBX is to tame that volatility by taking away the interest rate sensitivity especially given where we are in the rate cycle and some capital protection with active management. But the result is relatively anemic returns even if they come out good in risk-adjusted returns.
I see the category of S/T HY munis as bridging that gap and a good diversifier (not a replacement) for the short term bond buckets in conservative portfolios which typically have short term corporates and treasuries or active risk managed short term HY corporates whose total returns have been rather restrained.
Hence, the suggestion to take a look at this fund/category. It may or may not fit your portfolio allocation strategy, if you have one!
Hopefully, the long-winded explanation will encourage people to think a bit more about their portfolio allocation and fund selection relative to that than plugging it blindly into a dashboard and seeing what color pops up. :-)
Otherwise, it will be as bad as selecting based on M* ratings!

SHYD is a sister fund to the HYD I hold but lower in average duration. It is very low cost relative to the short term corporate HY such as RPHYX or STHBX, more volatile and higher return than those but less riskier than HYD or other high yield munis. There aren't many short-intermediate term muni alternatives. It is a very new fund.
Not for all portfolios but might fit those looking to diversify with shorter duration bond funds, or those overweighted in short term corporate or short term treasuries. Even in tax-deferred accounts.

Just noted: "RIVERPARK LOWERS MINIMUM INVESTMENT ON INSTITUTIONAL SHARES OF ITS MUTUAL FUND FAMILY TO $100,000 FROM $1 MILLION"
http://www.riverparkfunds.com/downloads/News/RiverPark_Lowers_Institutional_Share_Class_Investment_Minimums.pdf
For those who didn't want to pay the Schwab fee, it seems the RiverPark folks have made the Institutional shares somewhat easier to reach if you buy the shares directly from RiverPark.
RPXIX RiverPark Large Growth Fund Class Institutional
RPXFX RiverPark Large Growth Fund Class Retail
RLSIX RiverPark Long/Short Opportunity Instl
RLSFX RiverPark Long/Short Opportunity Retail
RPHIX RiverPark Short Term High Yield Fund Class Institutional
RPHYX RiverPark Short Term High Yield Fund Class Retail
RSIIX RiverPark Strategic Income Fund Institutional Class
RSIVX RiverPark Strategic Income Fund Retail Class
RSAIX RiverPark Structural Alpha Fund Institutional Class
RSAFX RiverPark Structural Alpha Fund Retail Class
RGHVX RiverPark/Gargoyle Hedged Value Fund Retail Class
RGHIX RiverPark/Gargoyle Hedged Value Instl
RWGIX RiverPark/Wedgewood Fund Class Institutional
RWGFX RiverPark/Wedgewood Fund Class Retail

First time poster, long time lurker. I was searching Morningstar for low rated high sharpe ratio funds (like rphyx) and came across this fund. Been around for several years and there is currently a load-waived class being sold through fidelity. It is unrated by Morningstar. It looks like it holds mortgage debt. Just surprised there is no commentary on it anywhere. Anyone have thoughts?

Consider RiverPark Strategic Income (RSIVX) - Same manager, slightly more 'adventurous', slightly better return :-) , and from what I've seen so far, not too badly subject bond volatility. The per/share price just goes up (due to Capital Gains?), with the exception of two mid-month penny dips and adjustments for its monthly dividend.
edit: I'd like to note that RSIIX, normally a $1Million minimum, is available at Schwab as a for-fee ($76/buy,$0/sell) fund with a $2,500 minimum ($1000 minimum in an IRA). And no short-term holding fees. The Institutional shares (RSIIX) have an expense ratio 0.25% less than RSIVX, making the one-year break even about $30,400.
For the MFO review, see http://www.mutualfundobserver.com/2014/01/riverpark-strategic-income-fund-rsivx-january-2014
And this months commentary ( http://www.mutualfundobserver.com/2014/03/march-1-2014 ) It's half-way down... Search (Ctl-F) for 'RSIVX'
For more info on David Snowball's take on it, see: http://www.mutualfundobserver.com/discuss/discussion/comment/36261/#Comment_36261
[ Long both RPHYX (for my monthly/annual needs) and RSIVX/RSIIX for my near-out years. ]

Reply to @mrdarcey:
Thanks for the reminder. There was a similar thread (alternatives to RPHYX) a year ago where I mentioned FPNIX.
http://www.mutualfundobserver.com/discuss/index.php?p=/discussion/5865/looking-for-another-fund-somewhat-like-rphyx-to-fill-a-conservative-part-of-portfolio/p1
I feel they serve different niches, though I would likely say the same of any of the funds mentioned here vis a vis RPHYX. (And I think you've characterized FPNIX well.) Here is the thread with those thoughts:
http://www.mutualfundobserver.com/discuss/index.php?p=/discussion/5680/fpa-funds-eliminate-front-end-sales-charges/p1

Reply to @MikeM: Was concerned not for myself, but for others who missed out on RPHYX, including the poster who was asking about RSIVX as a MM fund substitute (Ack!) Thanks for the nice add here.
Regards,
Mark

FWIW, was in the same boat as you looking for an alternative to RPHYX. Chose WDHYX after reading David's commentary a couple months ago.

In terms of the drawdown characteristics since the inception 6/1/12, PAIDX is compatible to RPHYX. Unfortunately, its return (2.13% since 6/1/12) is much worst than RPHYX (6.26% since 6/1/12).

Hi, Mark.
For March, I'll extend by a bit my post on the charms of one-star funds. If turns out that the combination of "short-term" and "high-yield" leads to some funds with interesting performance profiles. Below is the chart for RPHYX (blue), Intrepid Income (ICMYX, green) and Wells Fargo Short-Term High-Yield (STHBX, yellow) against the high-yield (orange) and short-term (magenta) peer groups.

I don't know that they're substitutes, but I am interested in learning a bit more.
For what that's worth,
David

Hi, guy!
Welcome.
And no.
That's the official answer, David's and mine. RSIVX has the potential for substantially more NAV volatility than does RPHYX. That's mostly a "mark to market" artifact. As you probably know, a fund's NAV is determined by answering the question, "what could I get for each security in the portfolio if I sold them today at 3:30 Eastern?" That's easy to determine with some securities; called "highly liquid," they're actively traded securities for which there are lots of buyers and lots of sellers and more-or-less reliable prices. It's a bit tougher for others ("illiquid securities," which might be rarely or never traded - imagine an entire apartment building owned by the REOC) and unreliable for still others ("distressed securities" or "special situations," where short term events distort the market for a particular security). Nonetheless, the rules say that a manager (i.e., a service hired by an advisor) must value every security every day.

It's also possible that one of the fund's securities might implode, but that worries me a bit less since David and his team are specialists in valuing this stuff and no individual position controls much of the portfolio.

There may well be periods where David could not sell some of his portfolio securities for - say - a tenth of their actual value. That doesn't bother him (or me) because he doesn't need to sell them (and I don't need to sell shares of the fund). It could, however, be a problem for someone with a very short time horizon; it's not inconceivable that some market gyration could trigger a mark-to-market drop in the fund's NAV, meaning that you might end up selling your shares at a loss.

You might want to listen to the conference call with David. Navigate using the top tabs to The Best, Featured Funds, RiverPark Short Term High Yield then check about two-thirds of the way down the page. David addresses his recommended holding period but I don't have my notes from the call here. He says something like, "if you're willing to wait a year (or some slightly longer period), we're comfortable that you'll be made whole. For shorter periods, there are no guarantees.

That's not highly probable but it's a serious distinction between this fund as RPHYX, much less a money market.
Okay: all of that having been said, my own "cash management" funds are T. Rowe Price Spectrum Income (which posted a drawdown of 15% during the '07-'09 meltdown) and the two RiverPark funds. Why? Because I'm really pretty frugal, I live well below my means and save a lot. My non-retirement portfolio (roughly half cash and bonds, half stocks) could drop by half and I'd still have the ability to cover six months of living expenses and medical bills from it. As a result, I'm more willing to absorb market risk than to book negative real returns.
Hope that doesn't muddy the waters too badly,
David

Hi Charles-
There's a discussion below pinging David asking whether RSIVX can be used as a money market substitute like the now closed RPHYX. Rather than wade into that before David has a chance to answer (poor form I think), I was wanting to know whether you had come across anything that you could fairly characterize as a somewhat viable alternative to RPHYX to suggest in this regard. Frankly, I am at a loss here.
Best,
Mark

I just started investing in RSIVX
Can this be used similar to RPHYX as a money market substitute? Performance seems better and only move .1 percent a day
Thoughts?

Dear David: Does the RPHYX manager have a long nose ?
Regards,
Ted
One Star:

I was having a nice back-channel conversation with a substantially frustrated fund manager this week. He read Charles's piece on fund categorization and wrote to express his own dismay with the process. He's running a small fund. It hit its three-year mark and earned five stars. People noticed. Then Morningstar decided to recategorize the fund (into something he thinks he isn't). And it promptly became one star. And, again, people - potential investors - noticed, but not in a good way.
Which got me to thinking about my own favorite one-star fund (RPHYX, which is closed) and Charles's favorite one-shot stat on a fund's risk-adjusted returns (its Sharpe ratio).
And so, here's the question: how many funds have a higher (i.e., better) Sharpe ratio than does RPHYX?
And, as a follow-up, how many have a Sharpe ratio even half as high as RiverPark's?
Hmmmm.
David

Since RPHYX is closed - is there another similar fund?

Reply to @NickF: At the time of the conference call, 28% of the fund overlapped with RPHYX. The duration of that fund was about 90 days I believe David said at the end of December. A lot of turnover at the short end.
David said his sweet spot was 4-5 years maturity as that was where he could get a real yield and benefit from the roll down of the curve. Not much turnover at that end.
The portfolio has a barbell shape.
Regards,
Mark

Reply to @Vert: Hi Vert- A "dynamic system" is a good way to think of it. Since the fund is intended to have a duration of three to four years, every month it is required to take cash from maturing positions and reinvest it into new high yielding instruments. A ton of turnover ($$$) at that duration structure and a ton of work. The cash is a byproduct and Mr. Sherman must reinvest it continually to get his desired returns for the investor of 6-8%. As the fund will have a significant overlap with RPHYX, I would expect that "true 0% cash" will be minimized when the fund is fully operational. Mr. Sherman does not impress me as a person who would tolerate such dead weight.

Good question, I've noticed the same. The yield on RPHYX is all over the map as well and I've had that for the past 2 years. I look at is as a little surprise every month.

My favorite discoveries on this board are RPHYX and RSIVX.
If your goal for a certain % of your portfolio was absolute returns with almost zero probability of loss, how would you construct that portfolio? Something like RPHYX will give u 2.5-4% in just about any market not named 2008 or 1929.