Reply to @00BY: I can't remember where, but I recall that the managers mentioned the limited capacity ($1 billion) in this space would deter larger fund managers. For example, I imagine PIMCO might not have much use for this strategy because there are not enough investments to allocate to even one of their larger institutional accounts.
I suppose smaller funds might see an opportunity, but maybe this is where the first mover has an advantage. Based on the MFO profile, these kinds of investment opportunities don't come up every day and they aren't readily accessible. If RPHYX is the biggest buyer on the market for now, then they would definitely have an advantage in terms of information and access.
I do think that RPHYX's expense ratio is kind of high -- that is one area where we could certainly benefit from some competition!
I remember hearing that BlackRock (?) was planning to build a bond trading platform that would allow more efficient trading of corporate bonds. I think this kind of platform might be more dangerous to RPHYX in the long run, or at least the RPHYX manager would have more competition for investment opportunities.

RPHYX,SJNK,SPHIX
SJNK is a newbie from March 14, 2012, and not unlike comparing RPHYX to SPHIX, is not a totally valid consideration; but is something else to view. I chose the traditional active managed SPHIX, as this fund has a very good record over many years (we do own SPHIX).
Okay, back to stimulating the northwest MI economy from the tourist side of life.
Regards,
Catch

Regarding RPHYX vs. junk, take a look at this chart. In particular the period from May to June this year where the S&P and Vanguard's high yield fund (just to take an example) both had declines, but RPHYX stayed stable. Of course this might not be comparable to Sept/Oct 2011, but I think it's a noteworthy data point.

Reply to @Hiyield007:
In a sense, many bonds in this fund are third cousins to (muni) pre-refunded bonds. If you read the linked description, you'll find many of the same attributes as claimed for the RiverPark fund, for similar though not identical reasons. Short duration, price stability, reduced credit risk, etc.
I think you mean the junk bond decline at the end of September (JNK declined from a price of 38+ in September to 36.19 at the end of the month, and maybe another percent or so into early October). Last Sept/Oct, RPHYX declined from 9.93-9.94 down to 9.86 in early October, before recovering through October. A whopping swing of 0.8% on a fund that yields 3-4%. I can live with that.
A question I have is with the use of cushion bonds (see current fund commentary). I like cushion bonds, I own them, I seek them out. But not for junk. They're good because they let you buy long term bonds (with commensurate higher yields) with the expectation that they'll get called early (since the coupons are high) - higher yields on shorter term bonds. A risk is that when the time comes for the bonds to get called, the issuer may not be able to refinance (bad credit risk) and thus the bonds really do become long term bonds. In a rising rate environment, the higher coupon protection only goes so far. IMHO it's more the likelihood of call that makes these attractive than the long term yield. And issuers of junk bonds strike me as less likely to be able to call bonds, even if it makes numeric sense for them to do so.

I don't think there is a problem moving money in and out of the fund. I note that the fund keeps quite a bit of cash on hand (17.10% according to Morningstar), which minimizes the impact of redemptions.
Do keep in mind that if you buy your fund NTF through a brokerage, they may impose a short-term trading fee. My brokerage charges a penalty if I buy and sell NTF funds within 6 months. So I only add money to RPHYX if I am certain that I won't need it for another 6 months.
I think the large cash position is a necessary part of this fund's strategy, but it is something that I would like to ask about if we have the opportunity.

I've had a substantial investment in RPHYX for the past year and have not been disappointed. The low volatility and small incremental changes have made this feel like a CD or what one would hope for from a money market. I've considered going all in with cash portion of portfolio but hesitate to do so. Would be interested to learn more from managers about potential risks.

Dear friends,
As I prepared for the August issue of the Observer and a planned September profile update for RPHYX, I asked David Sherman, RiverPark's manager, to read the recent discussions here about his fund. He agreed and thought that quality of analysis was generally high and occasionally excellent.
Following from that conversation, he offered to participate in a conference call with interested MFO members in the reasonably near future. The call would likely to taped and posted.
If you'd like to hear from, and ask questions of, Mr. Sherman (and likely Mr. Schaja, RiverPark's president), please do let me know. If a reasonable number of folks would like to pursue the opportunity, I'll begin working with RiverPark to set up a good time.
As ever,
David

Pat_Shuff
Thanks for your comments above. I have not seen a mutual fund that does a really good job of asset allocation across a range of assets.
I held DMLIX for about 1 year. It sounded great, and seemed to work OK at first. But I don't think that Doubleline has any particular expertise in either stocks or commodities, and that hurt them badly. I held PAUIX for a few years. I decided to sell it because I could not figure out what I really owned.
I rolled most of the DMLIX into RNSIX, and the rest into RPHYX. When Mr. Grantham says stocks are a good buy, or if the S&P 500 drops to the 1000 area, I will move some of the fixed income into RNCOX and MDISX.
Be well.

Reply to @Pat_F:
We're holding the same hands, rnsix, vwinx, rphyx. I was introduced to rnsix, rphyx here at this forum for which I'm grateful, professor Snowball is on somewhat of a roll. Rphyx to address interest rate risk, something of a keen and to date mistaken concern for years. I tried a couple of real return multiasset funds launched by Doubleline and Loomis Sayles, both dismally failed to achieve their complex trading strategy objective of Libor plus a couple percentage points and were rolled into rnsix which succeeds with a gentle upward bias in up, down or sideways markets instead of down, down and down. That's a chunk of risk in a single fund somewhat lessened by three differing subportfolios managed by two separate fund groups. I've mentally reclassified rnsix as an alternative investment class because it actually accomplishes what real return funds propose to.
http://finance.yahoo.com/q/bc?t=1y&s=RNSIX&l=on&z=l&q=l&c=MARYX+DMLIX&ql=1
Favorite buy and hold, VWINX FGBLX, consistent base hitters. Wellesley Income consolidates large cap blue chip dividend payers, a market sweet spot of late with intermediate term investment grade bonds. Fidelity Global Balanced congeals about four funds for diversification, 60/40 stocks/bonds, 50/50 domestic/int'l, dollar/nondollar, meeting or (scantly) exceeding its benchmark over trailing time frames ( MSCI World Index and the Citigroup World Govt. Bond Index using a weighting of 60% and 40%.)
Despite high turnover and the 1% expense ratio the team management somehow earns their keep. Also holding ffnox, Fidelity Four-in-One a cheap fund of index funds. These three funds, vwinx-fgblx-ffnox easily replace a dozen or more fund exposures in a world that is sadly ever more correlated anyway.
off-topic--watched all three parliamentary hearings of the grilling of the deposed Barclay's ceo,
chairman and the BOE contact and also the two Congressional inquiries of Mr. Dimon.
The English are so much better at english, packing a freightload of subtly and nuance into a single exquisitely crafted phrase with precision of meaning without hesitation.
The contrast, parliament/congress, was as a searing bbq to a marshmallow roast.
A differing view of the Libor mania--
http://brucekrasting.blogspot.com/2012/07/bloodletting.html
http://pragcap.com/why-is-no-one-freaking-out-about-the-libor-scandal
Interest rate manipulation, the real point--
http://www.cnbc.com/id/48167868
addendum--
The 4th parliamentary hearing, grilling the former Barclay's COO today.
As with any parliamentary or congressional hearing into past and present fiascos, whether an MF Global,
Lehman's, Moody's or JPM...Sgt. Schultz defense...saw nothing, knew nothing
when not pleading the 5th. I actually believe them, they didn't. Which is, if one
follows these show trial things going back to, say, the S&Ls..is the more condemning
but not most condemning. Most belongs to the inquirers who for decades revisit this Ground Hog Day of private gains/socialized losses and yet see nothing, know nothing.
http://www.parliamentlive.tv/Main/Player.aspx?meetingId=11255&wfs=true

My favorites are
RNSIX
EXDAX
VWINX
RPHYX

For what interest it holds, I offered Mr. Waggoner four funds for his consideration:
1. Wells Fargo Absolute Return (WARAX - great ticker symbol) - which is the retail version of GMO Benchmark Free Allocation. Downside: 5.5% load plus Wells doubled GMO's e.r.
2. Marketfield (MFLDX) - given its distinctiveness and coming sale.
3. Seafarer (SFGIX) and 4. RiverPark (RPHYX)- because there's something to be said for the "voting with your feet" criterion when it comes reflecting a sincere endorsement.
David

Of interest: Back in August 2011, I parked ~$10,000 in each of RPHYX and VCSH [Vanguard Corporate Short Term ETF] with dividends/interest reinvested in both. Since then, the balance in each has nominally been within ~$100 of the other with VCSH being the more volatile of the two.
I plan on using RPHYX in my (soon) retirement as a repository for my annual cash, with a fixed monthly transfer to my checking account for budgeted living expenses. [The monthly transfer out is a feature if you have an account directly with RiverPark.]
The pseudo 'steady income stream' will keep the better half happy :-)

Reply to @MarkM: I think many people look at RPHYX and think the same thing, but my question is, why? What do core bond funds offer that RPHYX does not? Better return? Better diversification? Lower risk?
I hold LSBDX/LSBRX, but I remember in 2008 it dropped over 20%. It eventually recovered (and maybe Fuss learned some lessons from it) but at least during that period, it was not very good for protecting against equity risk.

And thanks to FA and MFO for pointing out RPHYX. It has worked extremely well for me as a MM substitute. I figure the extra 2% plus that I have been earning is well worth the discernable risk.
MarkM

Thanks again for everybody's comments. I've done some more thinking so I'll rephrase my question as follows:
Let's say say you have a 60/40 or 70/30 split between stocks/bonds. In this scenario, I believe the bond portion should serve the following purposes:
1. Preserve capital: The bond fund should be relatively low risk (relative to the equity portion) in case of an emergency where you need more cash. Also in case of a crash in stocks, you can rebalance and buy on the lows.
2. Low or negative correlation to stocks: You don't get any benefits of diversification if the bonds and stocks go up and down at the same times.
3. Decent amount of return: You should expect the bonds (over time) to return more than cash (savings, CDs, etc).
My questions are: Do you agree with the above goals for the bond portion of a stock/bond portfolio? And if so, does RPHYX meet all of these criteria?
Ultimately what I'm getting at is, let's say you have a stock-tilted portfolio and you could only have one bond fund. Would RPHYX qualify or would you still choose one of the more typical core bond funds such as the offerings from Doubleline, Pimco, Vanguard, etc.

Reply to @David_Snowball: Many thanks David, my bad as I really didn't dig into RPHYX before posting. Indeed, *considerably* less volatile than STHBX. RPHYX also handled the decline in the traditional junk bond market last August-October with great aplomb. Will have to read up on RPHYX further as it does look like a nice place to park cash. Still, at least for me, because of the trendiness (combined with low volatility) in junk bond funds, I'll just stick with the traditional junk bond funds using some simple timing tools. Looks like a great forum and site you have here.

Reply to @Hiyield007: Hi, HY!
At the risk of repetitive redundancy, I'll note that RPHYX has essentially nothing in common with the portfolios or profiles of short-term high-yield bond funds. The manager's strategy is to invest a large fraction of the portfolio in called or soon-to-be called high yield bonds. That means that he might own an intermediate-term junk bond, but he owns it only for the 30-60 days between being formally called (or between being convinced that a call is imminent) and its final redemption by the bond issuers. While the strategy is not risk-free, he argues that the risks are different from what investors in either high-yield or short-term high-yield funds face. You get a sense of those differences if you chart RPHYX's NAV as STHBX or a high-yield index.
At the risk of putting words in his mouth (words which I'll try to confirm before incorporating them in an updated fund profile), the manager sees this as more nearly cash-like than bond-like in its profile.
For what it's worth,
David

I am not a fan of short term high yield junk bond funds. Parking cash or otherwise, you would be better off just buying a regular junk bond fund. There really isn't all that much difference in the volatility of the two breeds of junk bond funds, at least from my perspective. About the best open end junk bond fund around (and I wouldn't touch a junk bond ETF with a ten foot pole) is WHIYX and best of all they don't seem to mind frequent trades in and out. If you really must use a short term junk fund, STHBX is preferable to RPHYX.

Thanks to everybody for the comments. I need some more time to digest the thoughts in this thread, but for now just wanted to point out a couple of extra tidbits of info:
Regarding the fund's performance in a 2008-like scenario, here is a quote from David's commentary of August 2011, which contained an update on RPHYX:
"Unfortunately, the pure separate accounts using this strategy only began in 2009, so we have to look at investments in this strategy that were part of larger accounts (investing the excess cash). While we can’t predict how the fund may perform in the hypothetical next crisis, we take comfort that in 2008 the securities performed exceedingly well. As best as we can tell there were some short term negative marks as liquidity dried up, but no defaults. Therefore, for those investors that were not forced to sell, within weeks and months the securities matured at par. Therefore, under this hypothetical scenario, even if the Fund’s NAV fell substantially over a few days because markets became illiquid and pricing difficult, we would expect the Fund’s NAV would rebound quickly (over a few months) as securities matured. If we were lucky enough to receive positive flows into the Fund in such an environment, the Fund could take advantage of short term volatility to realize unusually and unsustainable significantly higher returns."
catch22: You mentioned the relative expense ratios of VBMFX vs. RPHYX. Just to clarify, the reported SEC yield is net of expenses. I think you know this but I am not sure how the ER factors into your discussion. The fee waiver is a concern but it looks like their actual expenses have been decreasing, and in any case we can cross that bridge when we get to it.

David's done a nice job explaining the fund's process in the past, but I don't recall much. Your question however is a good and logical one. Have often bought into funds I liked first & then looked for a way to fit them in. If it's a great enough fund in your view, you'll find a way. Am inclined to say there's nothing new under the sun - though the managers obviously think they've found a dandy niche. I'd say cash is cash - about as dependable as you can get in just about any financial crisis (but don't yield anything). Next in my mind would be an "ultra-short" fund heavy in investment grade stuff. The old Strong Advantage I once owned could keep up to 25% upper tier junk. While I owned it she was as true as real cash - used it like a money market to pay household bills. But these funds suffered during the panic of '08. RPHYX I'd put further down the ladder, but like the Sears Die-Hard, it may have a very long & profitable run before put to the test. Two things to consider: (1) with funds designed for safety or stability it's really important to read and understand the prospectus. Study up on the various bond ratings & which they are allowed to hold. Unlike an equity fund, you DO NOT want your manager to have a lot of latitude. (2) Figure out what it is you want your cash to do for you. Since I hold a healthy dose of junk, want the cash position about as pure as can get it - as a counter balance. Also tend to trade quite a bit, so want the cash where it will incur the least restrictions on trading and where it's easy to move back & forth into my existing equity funds. Hope this helps a little.