FYI: DoubleLine Capital and State Street Global Advisors rolled out a pair of new ETFs, one aimed at emerging-market credit and another at short-maturity bonds.
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2016/04/19/doubleline-capital-ssga-partner-for-two-more-bond-etfs/tab/print/

Yale is routinely the best-performing endowment in the world
Posted on April 15, 2016 by David Ott Acropolis Investment Management LLC
One of my favorite reads of the year is from the Yale Investments Office, which manages their $25.6 billion endowment. You can find the report by clicking here.http://investments.yale.edu/images/documents/Yale_Endowment_15.pdf
Yale is routinely the best-performing endowment in the world and has earned a remarkable 13.9 percent return over the last 30 years – well above the 10.7 percent return for US stocks, 8.7 percent return for foreign stocks and 7.1 percent return for bonds.
I’ve read both books by David Swenson, their pioneering investment manager, and pay close attention to their annual report. I haven’t finished this one yet, but I was surprised by their large increase to foreign stocks in recent years.
http://acrinv.com/yale-bets-big-overseas/
Asset Allocations
as of June 30, 2015
Yale University / Educational Institution Mean
Absolute Return 20.5% / 24.1%
Domestic Equity 3.9 / 19.4
Fixed Income 4.9 / 9.3
Foreign Equity 14.7 / 22.1
Leveraged Buyouts 16.2 / 5.9
Natural Resources 6.7 / 7.3
Real Estate 14.0 / 3.7
Venture Capital 16.3 / 4.6
Cash 2.8 / 3.7
In 1985, 80% of the Endowment
was committed to U.S. stocks and bonds. Today, target allocations call for
12.5% in domestic marketable securities, while the diversifying assets of
foreign equity, natural resources, leveraged buyouts, venture capital,
absolute return, and real estate dominate the Endowment, representing
87.5% of the target portfolio.
The heavy allocation to nontraditional asset classes stems from
their return potential and diversifying power.
Venture capital investments provide compelling option-like returns as
the University’s premier venture managers gain exposure to innovative
start-up companies from an early stage. Yale’s venture capital allocation
of 14.0% exceeds the 4.6% actual allocation of the average educational
institution. The venture capital portfolio is expected to generate real
returns of 16.0% with risk of 37.8%.
Yale’s venture capital program, one of the first of its kind, is
regarded as among the best in the institutional investment community,
and the University is frequently cited as a role model by other investors.
Yale’s venture capital managers are strong, cohesive, and hungry teams
with proven ability to identify opportunities early and support talented
entrepreneurs as they build early-stage businesses. The University’s vast
experience in venture capital provides an unparalleled set of manager
relationships, significant market knowledge, and an extensive network.
Over the past twenty years, the venture capital program has earned an
outstanding 92.7% per annum.
http://investments.yale.edu/images/documents/Yale_Endowment_15.pdf

Government, emerging markets, and long term bond funds up over 7%. World and corporate bond funds up over 4%. Junk corps up 3.62% with some of the larger ones up over 5%. Even some of the stodgy bank loan funds are up in the 3% to 4% range and some of the steady eddie funds in this category have had but one or two down days in the past two months. The junk munis are trailing at 2.62% albeit some of the better ones are near 4%. Munis in general seem to be overloved. Never a good thing from a contrarian point of view. Entering today I was 41% bank loans, 29% junk corp, 26% junk munis, and 4% emerging markets. That could be subject to change (as it is almost everyday) as may exchange more out of my Nuveen junk muni (NHMRX) into more of my Nuveen junk corporate (NCOIX) This scattered and diversified approach is normally not my thing but it sure has been less stressful. Hopefully can incorporate more of that strategy as I continue to age. Up around 4.35% YTD (edit: 4.99% through 4/22) and would be thrilled to get 10% for the year - or whatever the market has to offer. I am always more concerned with a smooth ride upward in my account with as least volatility as possible than I am hitting it out of the ballpark Harper style.

Interesting link, Ted, thanks for it. I'm curious what some of the many saavy bond investors here think about current junk valuations, @junkster and @dex maybe?

Not an investor but the "experts" are all over the ball park when it comes to the prospects of the junk bond market. In Ted's linked and bullish article we see this comment Payson Swaffield, chief income investment officer at Eaton Vance, thinks we are at the beginning of a new cycle of positive junk returns that could last a few years. Yet, in this week's Barrons we see an interview with Michael Weilheimer, head of Eaton Vance's Income Fund who is cautious and thinks we will be rangebound and are anywhere from the 6th to 9th inning of the credit cycle. Same firm yet two entirely different opinions on junk bonds. Marty Fridson the junk bond guru says ex oil we are an extreme valuations in the junk bond market. And of course we all know the Bond King's (Gundlach) constant and continual bearishness on the junk bond market.
The market though, who never listens to the experts has been very bullish and the average open end junk fund is up 3.62% YTD with many up over 5%. So unless oil goes back to $30 it is looking more and more like double digits gains for 2016 will be achieved.
Edit Ted's linked article was a good one as it highlighted the dampened volatility of junk bonds.

@kevindow, I want to ensure you that I am sincere. Over 10 years ago I was seeking an all-weather fund and seriously considered FPACX, but picked T. Rowe Price Capital Appreciation, PRWCX instead. Even though the smaller AUM, Steve Romick' track record, and flexible mandates were attractive attributes, Richard Howard, the former manager of PRWCX also have consistently good record despite having bigger AUM.
I understand that back-testing is not possible when the ETFs that don't exist in the period of question. Perhaps VWIAX in combination with VDIGX would work since both go back to 2000. With respect all active managed funds, the AUM is always an issue. Many tend to close to new investors too late in my opinion. That is one of the reason we are increasing our allocation to index funds.

I wonder if they are for sale again - this article reads like a 'promo' for a company that doesn't like publicity ......... if they sell out, hope it is to a good company. I will hate to sell out of POAGX.
"THE VANGUARD RELATIONSHIP was critical, because it gave Primecap patient, sticky capital from the get-go. In 1998, when Schow was 70, Primecap briefly put itself up for sale. The bids reportedly came in too low, and there was concern that Vanguard might pull its assets if Primecap were sold to a rival."

Also:
Gundlach: Swap Corporate Bonds for Mortgage
J. Gundlach, bond King, Doubline, is suggesting to blow out of your corporate bonds, especially junk, that were purchased at the height of panic when everyone thought the Fed was crazy enough to hike rates four times this year.
Wait, aren’t they still saying that?
Gundlach quote from Tuesday:
“The junk market was scared to death that the Fed was actually going to go forward with their suicide mission to raise rates four times this year, four times next year and four times the year after,” Gundlach said. “It’s not surprising that the same burst of enthusiasm for Treasury bonds, once the Fed seemed to abort their suicide mission, it also helped junk bonds. I don’t think that can continue any longer.”
Government-backed Ginnie Mae mortgage-related securities “are cheap relative to Treasuries,” the fund manager said. “That’s been a good buy point for the past six years.”
http://ibankcoin.com/flyblog/2016/04/12/gundlach-swap-corporate-bonds-for-mortgage/
From Ted's link
"The easy money has been made," Gundlach said.
Seemed to be his general theme not only with "junk" but oil and C E F's.Harder to get to $45 oil than from $30 to $40. Many C E F nav discounts have narrowed .Good way to
participate is RNDLX/RNSIX .Likes the Puerto Rico Municipals for high income individual/family taxpayers.Likes C M B S '( Principal Real Estate Income PGZ up near 2% today ). Continues to stick with his now 2 year old prediction of $1400 gold.Bond investors at least 25% defensive posture which of course would be comparable to his own managed (DFLEX/DLINX).
Also
Try this asset allocator
http://bluerockfunds.com/asset-allocator/
And questions or comments besides WHY?
TI+ is a fund for individual investors that seeks current income, low-volatility, capital preservation and long-term capital appreciation. In the three+ years since its inception through February 29, 2016, TI+ has delivered a total annualized return of 8.93%, including 12 consecutive quarterly distributions at an annualized rate of 5.25%. Significantly, the Fund has achieved risk-adjusted returns of five to seven times higher than leading stock, REIT, and bond market indexes, underscoring the Fund’s low volatility.
As of 4/14/2016 NAV
TIPRX $28.79
TIPPX $28.37
TIPWX $29.00
http://bluerockfunds.com/documents/

FYI: The U.S. government's lawsuit against ValueAct Capital targets one activist investor but could call into question routine practices across the $16 trillion mutual fund industry, according to attorneys and industry representatives.
The U.S. Department of Justice last week alleged the hedge fund improperly classified two company investments as passive -- and therefore exempt from disclosure requirements -- while taking an activist role with executives. ValueAct disputes the claim.
Regards,
Ted
http://www.fa-mag.com/news/lawsuit-against-valueact-puts-mutual-funds-on-alert-26301.html?print

Response from Sequoia's David Poppe:

For many years Sequoia Fund has clearly disclosed that we can and do pay large redemptions with securities rather than cash, and we have done so thousands of times before this year without incident. So we were puzzled by “Sequoia Clients Get Stock Shock” (Business & Finance, April 9) questioning the practice as a “shock” to investors and trying to tie recent in-kind redemptions to our Valeant stake. This policy isn’t new, is unrelated to the ups and downs of our fund and, specifically, is unrelated to our holding in Valeant.
We redeem with shares to benefit our continuing shareholders, who might otherwise pay capital-gains taxes on the sale of appreciated stock that might be required for redemptions. By redeeming in kind, our 20,000 continuing Sequoia shareholders will pay lower capital-gains taxes in the future. Our goal is always to be tax-efficient and to do what is right for continuing shareholders. For a departing shareholder, there is no tax or other consequence to receiving stock instead of cash, aside from the minor inconvenience of having to sell a security upon receipt. We take care to always deliver stocks that trade in sufficient volume so that the exiting shareholder can sell them immediately without depressing the market for a particular security.
David M. Poppe
President
Sequoia Fund
New York

http://www.wsj.com/articles/sequoias-redemption-with-securities-is-tax-efficient-1460583731

it is sad (or funny) that these investors look at their long term investment as trading games. If excitement is what are seeking, there is always Las Vegas. Unless these trading are done on tax deferred accounts, these trading will likely resulted in many short term capital gain.

FYI: Jeffrey Gundlach, the widely followed investor who runs DoubleLine Capital, said on a webcast on Tuesday that the Federal Reserve's rate hike cycle "increasingly likely" looks like a one and done scenario this year.
Regards,
Ted
http://wealthmanagement.com/print/fixed-income/gundlach-fed-rate-hike-increasingly-likely-one-and-done

I chose Seafarer (SFGIX), but in my 401(k), Capital Emerging Markets Growth Fund (EMRGX) chose me, as the plan swapped out American's (NEWFX), for Capital's (EMRGX), which has a lower (.80) ER.
On paper, the EMRGX managers look to have more experience than nearly any foreign/emerging markets operation - its partners have in the range of 15-to-40-years. Apparently, they were "chosen by the International Finance Corporation, a World Bank affiliate, to manage the world’s first global emerging-market fund."
But their long-term results (and the emerging markets category) are uninspiring. If those markets ever catch a sustained rally, I would expect EMRGX to be rewarded for the risk - a la GMO's forecast on a mean reversion for the category.
Right or wrong, I consider such exposure a diversifier, without getting crazy with more esoteric, alternative options.

By the way, it would be just my luck if BB rises from the ashes, since I unloaded before taking a capital gains hit last December.

Well, the Big Banks(ters) begin their walks to the confessional today, and it's not lookin' good.
http://www.reuters.com/article/us-banking-results-idUSKCN0X70VU

Analysts forecast a 20 percent decline on average in earnings from the six biggest U.S. banks, according to Thomson Reuters I/B/E/S data. Some banks, including Goldman Sachs Group Inc (GS.N), are expected to report the worst results in over ten years. [...] Investors will get some insight on Wednesday, when earnings season kicks off with JPMorgan Chase & Co (JPM.N), the country's largest bank. That will be followed by Bank of America Corp (BAC.N) and Wells Fargo & Co (WFC.N) on Thursday, Citigroup Inc (C.N) on Friday, and Morgan Stanley (MS.N) and Goldman Sachs Group Inc (GS.N) on Monday and Tuesday, respectively, in the following week.

Is it time for the adventurous to climb into the FAZmobile and burn some rubber? :)
http://howardlindzon.com/the-banks-are-crashing-everyone-to-the-fazmobile/
http://www.morningstar.com/etfs/ARCX/FAZ/quote.html
On a more serious note, in addition to possibly the worst bank reports since the Great Recession started, just what in the world is going on this week with the other bank-related intrigue? Emergency closed-door meetings, bail-in for European bank, Italy at edge of NPL cliff (is jig finally up?), etc.
http://thegreatrecession.info/blog/what-is-happening-to-banks/

Just about every major banker and finance minister in the world is meeting in Washington, DC, this week, following two rushed, secretive meetings of the Federal Reserve and another instantaneous and rare meeting between the Fed Chair and the president of the United States. These and other emergency bank meetings around the world cause one to wonder what is going down. Let’s start with a bullet list of the week’s big-bank events:
* The Federal Reserve Board of Governors just held an “expedited special meeting” on Monday in closed-door session.
* The White House made an immediate announcement that the president was going to meet with Fed Chair Janet Yellen right after Monday’s special meeting and that Vice President Biden would be joining them.
* The Federal Reserve very shortly posted an announcement of another expedited closed-door meeting for Tuesday for the specific purpose of “bank supervision.”
* A G-20 meeting of finance ministers and central-bank heads starts in Washington, DC, on Tuesday, too, and continues through Wednesday.
* Then on Thursday the World Bank and the International Monetary Fund meet in Washington.
* The Federal Reserve Bank of Atlanta just revised US GDP growth for the first quarter to the precipice of recession at 0.1%.
* US banks are widely expected this week to report their worst quarter financially since the start of the Great Recession.
* The European Union’s new “bail-in” procedures for failing banks were employed for the first time with Austrian bank Heta Asset Resolution AG.
* Italy’s minister of finance called an emergency meeting of Italian bankers to engage “last resort” measures for dealing with 360-billion euros of bad loans in banks that have only 50 billion in capital.

Hi, Mona.
Because risk moderation is generally tax-inefficient and for some of the asset classes that interest me (Asia income, for example) there aren't any tax-efficient vehicles. You could try to invest in low-beta stocks and a low-turnover fund, but that's sort of working at the edges of risk reduction.
So I keep good records, absorb the tax hit now and might book a taxable loss (as in the case of Artisan Small Cap Value) when I eventually sell.
Cheers,
David

Hi David,
Thanks for the explanation and I understand the choices.
I too have been hurt by the likes of Artisan (ARTMX) in the past few years with a poor returns and a big tax bill (on the way for the same in 2016), so I have mostly gravitated to Index and muni bond funds in my non-retirement account.
I certainly am not saying ARTMX offers any risk moderation (just the opposite high SD) like SFGIX and MACSX, but I have become very shy about putting any more actively managed funds in my non-retirement account. And the dilemma is, my non-retirement account is larger than my retirement account. I fill up my retirement account with other tax-inefficient funds (PIMIX, DBLTX, MACSX, PTIAX, VWEAX and one or two others), but the point is I have less room and have become conscious of asset location.
So now in some ways I let the tax tail wag the dog, but I sleep better if I continue to build my non-retirement account with funds that are tax-efficient, with a low ER and give me market returns.
I have owned ARTMX since 2006 in my non-retirement account, reinvested dividends each year (except last year), and like you did with ARTVX, I just need to bring myself to cutting the cord and before the November capital gain distribution.
Best Regards,
Mona

My answer Ted - I had a Capital One credit card previously but felt that their customer service was lousy. It's been awhile so maybe that's changed but you know once you go elsewhere you loathe to start elsewhere anew.

AndyJ: Investors in Annaly Capital Management didn't take too kindly at first to Monday's news that the real estate investment trust had struck its biggest deal yet: Shares of the company, which invests in mortgage debt, fell as much as 2.4 percent. By afternoon, shareholders were starting to come around and the stock had mostly recovered -- for good reason.
Regards,
Ted
http://www.bloomberg.com/gadfly/articles/2016-04-11/annaly-capital-deal-may-prompt-mortgage-reit-consolidation?cmpid=yhoo.headline

Ratings are updated monthly on our MFO Premium site. Its MultiSearch tool includes all share classes, 21 evaluation periods, and 50 screening criteria. The March update comprises ratings on 9,296 US mutual funds and ETFs (27,307 all share classes), based on Lipper's Data Feed Service.
Looking through some of our Pre-Defined Screens ...
Among the Best Performing Rookies: AQR Equity Market Neutral R6 (QMNRX, Alternative Equity Market Neutral), NWM Momentum (MOMOX, Flexible Portfolio), 361 Global Long/Short Equity Y (AGAWX, Alternative Long/Short Equity), Catalyst Macro Strategy I (MCXIX, Alternative Global Macro), and ProShares S&P MidCap 400 Dividend Aristocrats (REGL, Mid-Cap Core).
A little further down this list is LSV US Managed Volatility Inst (LSVMX, Multi-Cap Value). LSV is short for Josef Lakonishok, Andrei Shleifer, and Robert Vishny ... three professors that started Chicago-based LSV Asset Management in 1994. They now offer six mutual funds, including three rookies and one Great Owl:

Among short list of Dual Great Owl and Honor Roll Funds: T Rowe Price Capital Appreciation (PRWCX, Mixed-Asset Target Alloc Growth), John Hancock Capital Appreciation Value (Lipper ID B24T, Mixed-Asset Target Alloc Growth), Boston Trust Asset Management (BTBFX, Mixed-Asset Target Alloc Growth), Gavekal KL Allocation Inst (GAVIX, Flexible Portfolio), Vanguard Wellesley Income Inv (VWINX, Mixed-Asset Target Alloc Consv), and Vanguard/Wellington I (VWELX, Mixed-Asset Target Alloc Growth).

Chip posted our updated ratings on the Search Tools pages last night, thank you.
Quick look shows ...
All three CGM funds are on the Three Alarm list. As are both Fairholme's equity funds (FAIRX and FAAFX). Sequoia (SEQUX) is not yet ... it has two alarm bells.
bee's fav Bruce (BRUFX) is on the Honor Roll. As is Matthews Asia Dividend Inv (MAPIX), T Rowe Price's Capital Appreciation (PRWCX), and Vanguard's Balanced Index Inv (VBINX), Value Index Inv (VIVAX), Wellesley Income Inv (VWINX), and Vanguard/Wellington I (VWELX).
Remind me again why we should not just invest in VBINX and forget about it?
A little more here ... ignoring survivorship bias, there are 4,856 US funds and ETFs that have been around since the start of current full market cycle in November 2007. Across these 8 plus years, the absolute worst performer is iPath Exchange Traded Notes Bloomberg Natural Gas Subindex Total Return ETN Series A (GAZ) at -47.6% return annually ... down 99% or so from peak. Wretched! The best is Biotechnology UltraSector ProFund Inv (BIPIX) at +18.1% annually.
VBINX is at +5.6% annually, which is better than 80% of all other choices. Hmmm ... I'll offer shipwreckedandalone's post VBINX.
FWIW, Vanguard 500 Index Inv VFINX also returned +5.6% over this period. As has PIMCO Total Return III Inst (PTSAX), Voya Corporate Leaders Trust (LEXCX), and James Balanced: Golden Rainbow Retail (GLRBX).
The just over four year old Seafarer Overseas Growth and Income Inst (SIGIX) remains a Great Owl fund, besting its peers by 8.2% since inception. Also on the GO list are Gavekal KL Allocation Inst (GAVIX), Grandeur Peak Global Opportunities Inst (GPGIX), RiverPark Short Term High Yield Inst (RPHIX), FMI International (FMIJX), Pear Tree Polaris Foreign Value Small Cap Inst (QUSIX), Oberweis International Opportunities (OBIOX), Lifestyle Conservative Inst (TCSIX), TrimTabs Float Shrink ETF (TTFS), Akre Focus Inst (AKRIX), Zeo Strategic Income I (ZEOIX), Scout Low Duration Bond (SCLDX), Queens Road Small Cap Value (QRSVX), PIMCO Short Asset Investment Inst (PAIDX). All these funds have been profiled by David and can be found on the MFO Dashboard.

BRUFX vs OAKBX - lower expenses, smaller asset base, much more flexible mandate, able to own small market-cap holdings because of smaller size. Bigger loss in 2007-08, bigger gains 2009-10. Underperformed 2012-2013, outperformed 2014-2015. Just FYI for the board.