Reply to @NickF: I'm in agreement with your categorization of this fund, based upon David's commentary of last July. Below are excerpts from that review:
"In general, bond fund managers won’t buy such short-lived remnants and money market managers can’t buy them: these are still nominally “junk” and forbidden to them. According to RiverPark’s president, Morty Schaja, these are “orphaned credit opportunities with no logical or active buyers.” The buyers are a handful of hedge funds and this fund. If Cohanzick’s research convinces them that the entity making the call will be able to survive for another 30 days, they can afford to negotiate purchase of the bond, hold it for a month, redeem it, and buy another. The effect is that the fund has junk bond like yields (better than 4% currently) with negligible share price volatility."
"This strikes me as a fascinating fund. It is, in the mutual fund world, utterly unique. It has competitive advantages (including “first mover” status) that later entrants won’t easily match. And it makes sense. That’s a rare and wonderful combination. Conservative investors – folks saving up for a house or girding for upcoming tuition payments – need to put this on their short list of best cash management options."
⇒ David's Review, July 2011

Howdy Claimui,
You noted: "I parked some money in RPHYX a few months ago, and now I am trying to understand how I should use this fund in the long term: as an alternative to cash, or as part of my bond allocation, or in some other way. If U have a 70/30 split between stocks and bonds, is RPHYX a suitable replacement for the "bond" portion of the portfolio? Or should I stick to a typical "core" bond fund such as VBMFX, PTTDX, DLFNX, etc."
>>>>> We don't hold this fund; but it is indeed a speciality bond fund, and would be a complementary bond fund holding for us; among our other bond funds. VBMFX and PTTDX are more broad based, while DLFNX does and will probably continue to tilt towards mortgage bonds, unless Mr. Gundlach finds problems with this area going forward.
"In the other thread about the role of fixed income in a portfolio, BobC noted that he advises clients to expect 2-4% from bonds over the next 10 years. According to Morningstar, RPHYX's 1 yr trailing performance is 3.61%, and its SEC yield is 3.65%. In this context, RPHYX's performance as a bond fund seems very respectable. It has returned (and is currently yielding) at the upper end of BobC's target range with very little change in NAV."
>>>>> I have to presume BobC's reference is an annualized, total return from a broad based bond fund holding(s). I don't know what to expect that far out into the bond/financial world and will attempt to adjust going forward, as needed.
"On the other hand, Vanguard's Total Bond Market VBMFX has returned 6.49% over the same period but with much more volatility. In isolation, I would think that if my bond target is 2-4%, and RPHYX is already returning 3.61%, then VBMFX is not worth the risk. However, I don't know how this plays out in the context of a portfolio. Maybe VBMFX is a better diversifier and thus a better choice a hedge against equity risks."
>>>>> As to risk of RPHYX versus VBMFX; one would have to consider risk in the HY bond sector in general and what affect this might have upon RPHYX and how it deals with a special area of the HY bond area. VBMFX is definitely more diverse. Another consideration is that although RPHYX has a current yield of about 3.75%, it also has an ER of 1.25% (temporary, and could be adjusted to 2.2% range); while VBMFX has a yield of about 2.75%, but an ER of .25%. Not as much yield obviously, but one is saving 1% in ER, too. Additionally, at least for me; I would continue to measure RPHYX against SPHIX. Not the same critters in function; but they are cousins. I note SPHIX, as it has a very long record of returns, is well managed and ranks 47 of 563 HY funds over the past 5 years, which of course, includes the market melt period. Since its inception, has shown RPHYX to have a slow and steady upward path when measured against swings in the traditional HY bond funds, but with about 1/2 of the total return.
"I noted in David's June commentary that he was planning to update his profile of RPHYX, so maybe this is one of the things that he could comment on. The original profile highlighted RPHYX as an alternative to money market funds but did not really discuss whether it could be a "core" bond fund in the context of a portfolio."
>>>>> For our house, for most aspects; we currently use TIPs funds for our "cash" holdings, while any of our other bond funds serve a similar purpose and could be sold for equity positions. The TIPs funds are very liquid; thus part of their usage desire. The ultimate test for RPHYX would be enough of a market scare (lasting at least 3-6 months) that also would affect the traditional HY bond sectors to find the fund's reaction to buyers and/or sellers in this area. For our purposes, we would maintain a total type bond fund for a core holding in this area.
My 2 cents worth............
Take care,
Catch

Claimui, I decided recently to put some cash into RPHYX as a money market equivalent after doing my due diligence. For those of you who may consult Yahoo charts, the price swoon on 2-24-12 is an error. I called the fund and they are contacting Yahoo to fix it. So far in its history RPHYX has been very stable price-wise, but it has yet to be tested by a 2008-type financial debacle (not that I'm wishing for one). As for my core bond holdings I lean towards the Doubleline funds, DBLTX and DBLFX, and PIMIX. At the end of the day RPHYX is still a bond fund, so I will be monitoring it as closely as I monitor any other bond fund holding.

I parked some money in RPHYX a few months ago, and now I am trying to understand how I should use this fund in the long term: as an alternative to cash, or as part of my bond allocation, or in some other way. If U have a 70/30 split between stocks and bonds, is RPHYX a suitable replacement for the "bond" portion of the portfolio? Or should I stick to a typical "core" bond fund such as VBMFX, PTTDX, DLFNX, etc.
In the other thread about the role of fixed income in a portfolio, BobC noted that he advises clients to expect 2-4% from bonds over the next 10 years. According to Morningstar, RPHYX's 1 yr trailing performance is 3.61%, and its SEC yield is 3.65%. In this context, RPHYX's performance as a bond fund seems very respectable. It has returned (and is currently yielding) at the upper end of BobC's target range with very little change in NAV.
On the other hand, Vanguard's Total Bond Market VBMFX has returned 6.49% over the same period but with much more volatility. In isolation, I would think that if my bond target is 2-4%, and RPHYX is already returning 3.61%, then VBMFX is not worth the risk. However, I don't know how this plays out in the context of a portfolio. Maybe VBMFX is a better diversifier and thus a better choice a hedge against equity risks.
I noted in David's June commentary that he was planning to update his profile of RPHYX, so maybe this is one of the things that he could comment on. The original profile highlighted RPHYX as an alternative to money market funds but did not really discuss whether it could be a "core" bond fund in the context of a portfolio.

Reply to @catch22: My AGG, RPHYX and ARIVX posted positive returns and soften the blow.

Reply to @scott: Thanks, Scott... it's so nice to be able to join in again. I've never been comfortable with the Arbitrage-type funds... my short term THOPX, and even more conservative WEFIX seems to regularly outperform (or at least keep up) with those funds with less volatility.
I like SIRIX, but it holds too high percentage of DBLTX, which I already own. I've been very happy with BERIX - and even not afraid of my YACKX, which has ups and downs within my comfort zone and has gained well over my goals.
My "closest to cash" fund is RPHYX - YTD and 12 month returns low, but so much better than cd's, and nice and steady.
I am concerned about my PRIIX, seems too longer-term to be in Treasuries now. What do you think about this?

Reply to @Investor: I was sitting today at the James Advantage funds website, studying their long/short fund (it's interesting and I've probably had six requests to look at various long/short strategies in the past month), and trying to come up with an excuse to profile James Balanced Golden Rainbow (GLRBX). At $1.5 billion, it's about $1.4 billion above our usual coverage universe.
That said, it remains on the due diligence list for Chip's second mutual fund. Last month, she settled on RiverPark Short-Term High Yield (RPHYX) as her first. It will play the sort of cash-equivalent anchor role in her newborn portfolio.
David

I tend to move really slowly in realigning my portfolio. Among the things I could imagine doing:
1. noticeably increasing my allocation to River Park Short-Term High Yield (RPHYX). The rationale is that I'm way low on "cash" in my non-retirement portfolio because I used a chunk (returning 0%) to eliminate debt (3.5%) and cover an unexpected household expense.
2. liquidating my Matthews Asian Growth & Income (MACSX) position and reallocating to Matthews Asia Strategic Income (MAINX) and Seafarer Overseas Growth & Income (SIGIX). That would be hard for me, given my happy history with MACSX but it would open two new opportunity sets and still keep me in my comfort zone (Matthews + Foster).
3. liquidating Leuthold Global (GLBLX) and moving the money into Vanguard STAR (VGSTX) or Northern Global Tactical Asset Allocation (BBALX). Since inception, Leuthold has substantially beaten Morningstar's "world allocation" peer group but has trailed both of the two alternatives. It's a little more volatile and a lot more expensive but it also has theoretically greater flexibility than either of the other two. Much of the lag occurred in the six months after launch (in the midst of the meltdown) when the other two had a structural stake in Treasury bonds. I could move the money into another core holding, FPA Crescent (FPACX), though that does increase my exposure to manager risk. Romick has been excellent for me.
Just pondering,
David

Share price decline of 4.50% today. Have never seen price fluctuate more than .30% in the 9 months I've owned it. What's that about?

VGENX VGPMX FFRHX FSTFX RPHYX SCPZF.PK Also some gold and silver miners in mining friendly jurisdictions (Quebec, China.) I do the grocery shopping and bill paying like utilities, insurances etc. With online bill paying and personal finance software it is easy to reference the previous 12 months' payments for various services and derive the percentage increase due to the latest hike. Regardless of government figures, what is counted and how it is counted, this household's routine recurring expenses are increasing at an annualized mid to upper single digit percentage rate.
http://mjperry.blogspot.com/2012/02/higgs-on-immiseration-of-personal.html
http://econompicdata.blogspot.com/2012/02/some-more-ugly-bond-math.html
An additional trillion borrowed last year, the year before, this year, next year.
Someone pays. A thank you would be preferable to demonization but don't hold your breath.

Over the last 6 months, RPHYX made 2.3%, which is even better than in the previous 6 months. One can easily check it using M*, or you may just call the fund. Kudos to David Snowball for discovering this amazing fund!!!
You may also check whether there was some mistake at TD Ameritrade: If they do not reinvest it, then you may get some cash instead of shares of RPHYX. Note that the price of a share of this fund does not move much.

Has anyone out there made money in RPHYX over the past 6 months? My TD Ameritrade total with reinvested interest/dividends remains stubbornly a few dollars negative.

Hi, Derf.
The other term for "following its benchmark" is "hugging an index."
Perhaps the question is "is the fund manager doing what I hired him or her to do?" Several of my income-oriented funds (HSTRX, RPSIX, RPHYX) are supposed to generate mid-single-digits returns, consistently, with limited volatility. As long as they're doing that, I'm not so worried about their R-squared.
Just a thought,
David

Reply to @PatShuff:
Pat, I'm not really sure how to respond to your post. Remember, I asked this question re a young investor just starting out who will be averaging into the market over many years time. That said, I suspect trying to guess/time what interest rates will do worldwide, unless you are just talking U.S. Treasuries, is certainly difficult and its unclear to me whether we will see a sharp rise in rates a la late 70s early 80s or live in a prolonged low rate environment.
As for my own port, I haven't thrown in the towel on funds like PTTRX, DODIX, VFSTX, LSBRX, although I do have holdings in floating rate, muni, high yield, emerging, RPHYX and DBLTX.

(it's been in a 30 year bull cycle but interest rates can't go down from here and since prices move inversely to yield . . .)
I suspect all fixed-income investments have become a risky asset.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Worried minds think alike. Adhering to the quaint old guideline of stocks/bonds mix according to age would be 40/60 but feel more comfortable with 35/65 or even 30/70.
But dislike bond exposure at this juncture point for the reasons above. A rather sticky wicket allocating a majority of assets to a credit market that offers a negative real return
on most anything that addresses the interest rate risk (shorter term higher credit qualities.) I/we restructured the entire fixed income side over a year ago, in hindsight over a year early. Fidelity holdings are floating rate, short term muni, New Markets.
Also RPHYX, RNSIX which I was introduced to here and much thanks for that. The remainder of long-only bond funds were rolled over into a couple multi-asset strategies launched by Loomis Sayles and Doubleline employing complex long-short derivative strategies across currency, commodity, stock and bond markets. Apparently too complex. The Loomis Sayles fund
managed (...) to get wrong-footed whipsawed daily with a steadily dwindling NAV in both up and down markets plus no yield (MARYX, don't go there.) Bye-bye, rolled into RNSIX which continues on quite a roll in up, down or sideways markets, don't ask me how, now 20% of assets, its three separately managed subportfolios are a comfort factor for an outsized position. I'm aware of the overconfidence/hubris factor that afflicts fund managers who consistently find everything breaking their way until not, see Bill Miller,
Ken Heebner and the alphabeta bet, confusing one for the other, alpha and beta. The Doubleline Multi-Asset (DMLIX) continues to break even after a year, no more nor less with scant yield, basically a hedge fund for the 99% mom/pop retail investor with the same dismal performance as the pricier high net worth 1% varieties, commiseration knows no class.
The accumulation phase ended with retirement nearly a decade ago, capital preservation is the goal. Long term wind-at-back bond fund complacency will end with surpise and shock in the sort of interest rate rise exceeding all forecast guesstimations by hundreds of basis points the likes of which bankrupted Orange County in the mid-'Nineties. Amnesia is not a strategy. Seared both sides like a Texas-style steak by the '08 market crash the pain avoidance shift has been to the next burner to heat up. I'm not a shorter but it has its appeal regarding fixed income at present despite being dead wrong for over a year.
In a much higher interest rate environment laddering Bulletshares etfs hold vast appeal
for a buy-and-forget capital preservation minded individual with far better things to do (think beachwalk) than pay attention to financial markets having become a wall to wall mess, bumper to bumper, stem to stern, in my version because complexity favors the sinister.

I've been using RPHYX. It held up well during its one test so far (3Q 2011). No, not a cash substitute, but no bond mutual fund could be.
I've also mixed in some ARBFX, VWINX and VFIIX and I sleep just fine. Upside is very limited, but low volatility is key.

Short track record, but you can consider RPHYX for this. I also use USGNX for a portion of it.

Yes and yes. I have MACSX and FMLSX and EXTAX and RPHYX. I can't remember if they were all stars. I've been happy so far.

Reply to @chip: Well, there you go.... one of the reasons I love this site - THANK YOU! A wealth of information in the Commentary - including the exact answers I was looking for, by amazing coincidence. Re The Street... if I had known it was that loud, obnoxious guy on CNN that I always instantly switch channels away from, I would have discarded his opinion immediately (why does he have to yell?). And, with the low opinion of Zacks, looks like the US News site won't be as helpful as I was hoping. I love the idea of accumulating ratings from different sources (or just giving total ratings with breakdowns like the old MaxFunds did - but not if the ratings they include are not ones I would pay any attention to. This whole extensive section showing results from M*, Kiplinger, SmartMoney, etc.'s recommendations vs. results very interesting - I really love these type of analysis.
I also loved the update to stock/bond portfolio allocation percentage differences in returns. One of my favorite links recommended here is the Merriman chart - all these type reinforce my comfortableness with a very conservative portfolio since I don't need the extra gains to have to take the extra risks.
I always look at the 2-4 funds David briefly mentions worth taking a look at - and I especially like your full reviews (i.e., RNDLX, RPHYX, etc.) and would love to see more of those. THANK YOU SO MUCH, DAVID, for this great site!
P.S. I keep forgetting about the MFO Home Page and Commentaries. Couldn't tabs for these be placed at the top of these discussions? Would also maybe remind some viewers to donate when they can. Thank you, Anna, for such a nice design job on the Home page... very simple and easy to read! And THANK YOU ACCIPITER for Falcoln's Eye and the new Navigator, GREAT TOOLS! (Note: I tried entering ETF in Navigator, but nothing happened after enter)
P.P.S. There was a great picture yesterday on the Home page that isn't there now. Really cute child and appealing looking man. Who are they?

Dear David,
Thanks a lot for your in-depth comments, they are so helpful ! I am especially grateful for introducing us to RPHYX some time ago.
Concerning your comments on Tocqueville Select: I guess its new symbol is TSELX, right?
Do you have any new information about the just opened FPA International Fund FPIVX ? Also, there are two other interesting new funds which might be interesting: FMIJX (international) and POLIX (large cap growth). Too may interesting things go on....
Happy New Year and many thanks again!
Andrei