Hi @DavidV,
Thank you for your question.
I do care about portfolio allocation in each account that makes up the master portfolio that I have detailed above. Naturally, the asset allocation does varry from account-to-account along with the holdings. For example, in my health savings account about one third is currently invested in only one fund (American Balanced Fund) and the other two thirds is currently held in cash which is much more than I need from an annual health care perspective. It is one of the accounts that I throttle form time-to-time by adjusting it's allocation as how I am reading the markets. Currently, with high equity valuations and anticipated interest rate increases I have rolled back my exposure to both stocks & bonds not only in this account but in all of my accounts. All the accounts get throttled from time-to-time but not all get throttled at the same time as I make changes (rebalance) over time. For example, I have been raising my cash allocation and lowering my allocation to both stocks and bonds for the past couple of years due to higher than normal price to earnings ratios for stocks and anticipated rising interest rates which will effect most bond valuations.
Generally, when I make a buy, I buy with the intent to hold the asset for at least a year. When selling something, in my taxable account, I generally take profits form long term positions while letting the shorter term positions ride until their profits (or losses) will be taxed as long term capital gains (or losses). For me, investing centers more around time in the markets over timing the markets. Trading centers around timing the markets. Generally, I hold more equities (towards the high range of my allowable allocation) when they have become oversold and their valuations are reasonable ... and, I'll hold less when their valuations have increase with higher than normal price to earnings ratios thus becoming overbought.
Most of these accounts have been in place for a good number of years as I am now retired and began investing when I was a teenager in FKINX (which was my first mutual fund purchased and still remains my largest single position at about six percent of my portfolio). Interestingly, form my late fifties, up to my full retirement at age 67, I made more from my investing endeavors than I made from working.
Thanks again for the question. I hope the above provides you with some insight as how I govern my portfolio and answers your question.

He's filling space with this piece - nothing new unless you've just fallen off the turnip truck: "It is my belief that once you design and implement a portfolio to match your long-term investment goals and risk tolerance, you should preserve its structural integrity. And the best way to preserve your ideal asset allocation is to rebalance regularly, even when markets are volatile."
-
There's good arguments on both sides and many different ways to approach rebalancing. Some are repulsed at the thought of selling a winner and buying a loser. Others see regular rebalancing as a way to lock-in gains on a regular basis.
One approach I use is to set broad percentage ranges for different categories in advance, much as asset allocation funds do. Keep hands-off unless a range is breached either on the upside or downside. Another common way is to rebalance back to norm on a chosen date each year. Some people use their birthday. If you're already in the draw-down stage, taking distributions from your winners is a natural way to rebalance.
A few chosen funds I exclude from rebalancing for a variety of reasons - small speculative positions in OPGSX and PRLAX for example. These are long-term bets in highly volatile areas and I'm willing to let them run for now in hopes of outsized gains. Neither has disappointed since purchase.

Hi Shostokovich,
As President James A. Garfield noted: “Man cannot live by bread alone; he must have peanut butter”.
Similarly, an investor cannot survive on a simple one-dimensional model to capture stock market movements like CAPM is, but a fuller explanation demands a more eloquent model, perhaps like the Fama-French 3-factor formulation. The modeling became even more complex when a Momentum component was added, and still more complex when Fama-French contributed yet more elements.
The initial CAPM (Capital Asset Pricing Model) was developed by Bill Sharpe who received a Nobel award for his inspiration. Beta was his modeling parameter of choice. Later he ruefully said that he is fortunate that the Nobel community does not rescind their awards.
Fama and French expanded the pricing modeling to three parameters: Beta, Size differences, and Price-to-Book ratios. Momentum was added by Carhart to transform the three factor into a four factor model. Models are just simplifications and are never perfect. Neither was the four factor model, so Fama-French added more elements.
The goal was to develop a complete model that fully projected stock returns with a minimum of residual unexplained component. That residual (Alpha) can be interpreted as a fund manager’s skill or luck contribution when evaluating mutual fund performance. If the residual Alpha remains positive over an extended timeframe, then skill is the likely interpretation; if it does not persist, luck is the most probable interpretation.
The accumulated empirical mutual fund evidence is that luck is the predominant factor, but some limited cases of skill are identifiable. The Swedroe work finds skill within the American and Vanguard fund groups. The Vanguard finding is consistent with a claim reported in a recent MFO posting. Here is an Internal Link to that article:
http://www.mutualfundobserver.com/discuss/discussion/26202/finding-active-managers-to-beat-the-market
By way of full disclosure, I own a substantial number of Vanguard products, both passively and actively managed.
I agree with your basic observation that the research would be better served with some acknowledgement of standard deviations. That’s always a necessary element when reporting statistical work.
When generating an Alpha for a fund, the standard deviation of that Alpha for an extended time period is also needed to formulate a test of its significance. The Swedroe paper did not include that data. The Alpha standard deviations are needed to calculate a “t” test value which is a measure of how meaningful the statistical results really are.
A “t” test value of plus or minus 2 or greater is the usual criterion for a statistically meaningful finding. These were likewise missing in action from the Swedroe document. Still, I congratulate him for his project. I concluded that his work is useful. It tells us where to search if Alpha is a singular selection criterion. It is not so for me.
I hope this is helpful. Please understand that I’m not a statistician, just an investor with an interest in statistical data.
Best Wishes.

FYI: (It would be nice to know which ones ?)
Jeffrey Gundlach, the co-founder and chief executive officer of DoubleLine Capital, said on Friday that his firm purchased some U.S. stocks two weeks ago after their rocky start in January.
Regards,
Ted
http://www.reuters.com/article/doubleline-gundlach-idUSL2N1651GF

http://www.sec.gov/Archives/edgar/data/1217286/000119312516478119/d149787d497.htm
497 1 d149787d497.htm JPMORGAN TRUST I
J.P. MORGAN INTERNATIONAL EQUITY FUNDS
JPMorgan Asia Pacific Fund
(All Share Classes)
(a series of JPMorgan Trust I)
Supplement dated February 25, 2016
To the Prospectuses, Summary Prospectuses and Statement
of Additional Information dated March 1, 2015, as supplemented
NOTICE OF LIQUIDATION OF THE JPMORGAN ASIA PACIFIC FUND. The Board of Trustees of the JPMorgan Asia Pacific Fund (the “Fund”) has approved the liquidation and dissolution of the Fund on or about April 6, 2016 (the “Liquidation Date”). Effective immediately, the Fund may depart from its stated investment objective and strategies as it increases its cash holdings in preparation for its liquidation. Unless you have an individual retirement account (“IRA”) where the State Street Bank and Trust (“SSBT”) serves as the custodian, on the Liquidation Date, the Fund shall distribute pro rata to its shareholders of record all of the assets of the Fund in complete cancellation and redemption of all of the outstanding shares of beneficial interest, except for cash, bank deposits or cash equivalents in an estimated amount necessary to (i) discharge any unpaid liabilities and obligations of the Fund on the Fund’s books on the Liquidation Date, including, but not limited to, income dividends and capital gains distributions, if any, payable through the Liquidation Date, and (ii) pay such contingent liabilities as the officers of the Fund deem appropriate subject to ratification by the Board. Capital gain distributions, if any, may be paid on or prior to the Liquidation Date. If you have a Fund direct IRA account where SSBT serves as custodian, your shares will be exchanged for the corresponding class of shares of the JPMorgan Liquid Assets Money Market Fund as specified below, unless you provide alternative direction prior to the Liquidation Date. For all other IRA accounts, the proceeds will be invested based upon guidelines of the applicable Plan administrator.
Share Class of JPMorgan Asia Pacific Fund Share Class of JPMorgan Liquid AssetsMoney Market Fund
Class A Shares Morgan Shares
Class C Shares Morgan Shares
Select Class Morgan Shares
Upon liquidation, shareholders may purchase any class of another J.P. Morgan Fund for which they are eligible with the proceeds of the liquidating distribution. Shareholders holding Class A Shares or Select Class Shares will be permitted to use their proceeds from the liquidation to purchase Class A Shares of another J.P. Morgan Fund at net asset value within 90 days of the liquidating distribution. They may also purchase other share classes for which they are eligible. If Shareholders of Class C Shares purchase Class C Shares of another J.P. Morgan Fund within 90 days of the liquidating distribution, no contingent deferred sales charge will be imposed on those new Class C Shares.
FOR EXISTING SHAREHOLDERS OF RECORD OF THE FUND AS OF FEBRUARY 29, 2016, ADDITIONAL PURCHASES OF FUND SHARES WILL BE ACCEPTED UP TO AND INCLUDING MARCH 15, 2016 AFTER WHICH NO NEW PURCHASES WILL BE ACCEPTED. FOR ALL OTHER INVESTORS, PURCHASES OF FUND SHARES WILL NO LONGER BE ACCEPTED EFFECTIVE MARCH 1, 2016.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS, SUMMARY PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION FOR FUTURE REFERENCE

Andrew Foster dropped a note in my mailbox this afternoon to inform me that the 4th Qtr Portfolio review for SFGIX has been posted. As most know, Mr. Foster worked in Asia for some time before his days at Mathews and reacts (and doesn't react) to Asian events in uncharacteristic ways. Always worth a glance, IMO, even if one isn't prepared to have him work with your money just yet.
http://www.seafarerfunds.com/fund/portfolio-review
His current stance on Asia--- and on emerging market stocks in general--- has taken a turn, and I think it's worth a smoke in the pipe:

February 2016 – In his latest portfolio review, Andrew Foster discusses a shift in the Fund’s composition, away from the Asian region, and toward larger stocks at the expense of smaller ones. Next, he speculates as to the cause behind the collapse in China’s capital markets. While he does not offer a definitive explanation, he does suggest that circumstances may be serious enough to warrant attention from investors.

heezafe,
Thanks for the information.
It sounds like you know a bit about the Matthews Funds as well a Seafarer Overseas Growth and Income.
If my research is correct and current, MAPIX is about 30% Japan and 35% China/Hong Kong, MACSX is about 36% China/Hong Kong and 6% Japan, and the last I looked SFGIX was about 17% China/Hong Kong and 3% Japan, with a total of 52% in Asia, so it is more diverse in the Asia space than MACSX or MAPIX. Also, SFGIX had a 13% position in Emerging Europe, 21% in Latin America, and 5% in South Africa.
Currently I own MACSX (seems to be the least risky of the three) in a retirement account and I am trying to figure out if owning SFGIX and or MAPIX gives me added diversification, or I just would be collecting funds.
Any thoughts would be appreciated.
Mona

Interesting argument. There's always overvalued areas. However, for natural resource producers it's hard to make that claim. Gas is overpriced at $1.25 (excluding tax)?
Tech is nearly impossible to value anyway. If you're building 8-track decks you're overvalued. If your aeorspace division is about to receive a big contract from NASA to supply the space station or ferry payloads to the moon, you might be undervalued.
Central banks and lawmakers will do what they will do. But it would be rare indeed for a paper currency to maintain or increase in purchasing power over extended periods. This begs David's question a bit I suppose. But, even nominal gains in equities are preferable to little or no gain in cash.

Fortunately OSTFX had the smarts to dump Valeant, unlike Sequoia and some others (Vanguard was also very late to dump, BTW). Perhaps the most important thing to keep in mind is that Osterweis started as a firm that managed money for ultra-high net worth families. Capital preservation was and is a high priority. The funds came along as an offshoot of the private money management, sort of a "what can you do for out grandkids" response. As a result, OSTFX has never been flashy, never been a style-box fund (it is most definitely not a midcap blend fund, another M* mistake), and strives to provide good returns over the long haul. Everyone of us has owned at least one fund that stumbles once in a while. Prior to last year's crappy number, you have a 10-year average return of that is very close to the S&P 500 with less risk. We are willing to give the team a little slack here. There has been very little turnover on the team, with Berler and Kovriga there since 2006. Are there concerns? Yes, there are always concerns with actively-managed funds.
If OSTIX is compared to the Non-Traditional Bond category (which is where we believe it should be), it is a bracket buster. Are there concerns? Yes, but the YTD number is not because the team decided to take dumb pills. Like OSTFX, we are giving them some slack, but nothing suggests there is any flaw. Which reminds me again that I seldom read M* analyst commentary for a good reason.

Andrew Foster dropped a note in my mailbox this afternoon to inform me that the 4th Qtr Portfolio review for SFGIX has been posted. As most know, Mr. Foster worked in Asia for some time before his days at Mathews and reacts (and doesn't react) to Asian events in uncharacteristic ways. Always worth a glance, IMO, even if one isn't prepared to have him work with your money just yet.
http://www.seafarerfunds.com/fund/portfolio-review
His current stance on Asia--- and on emerging market stocks in general--- has taken a turn, and I think it's worth a smoke in the pipe:

February 2016 – In his latest portfolio review, Andrew Foster discusses a shift in the Fund’s composition, away from the Asian region, and toward larger stocks at the expense of smaller ones. Next, he speculates as to the cause behind the collapse in China’s capital markets. While he does not offer a definitive explanation, he does suggest that circumstances may be serious enough to warrant attention from investors.

Objective & Overview
The Hennessy Cornerstone Mid Cap 30 Fund seeks long-term growth of capital by investing in 30 Mid Cap companies, screening for undervalued stocks with above-average growth potential.
Investment Strategy
The Hennessy Cornerstone Mid Cap 30 Fund formula marries value with momentum, seeking growth at a reasonable price. Stocks for the portfolio are selected by strict adherence to the following time-tested, quantitative formula:
Market capitalization between $1 and $10 billion, excluding foreign stocks/ADR's
This market cap spread allows for inclusion of a broad range of mid-cap companies. Foreign stocks/American Depositary Receipts, or “ADR's” are excluded as they do not generate additional returns for the additional associated risk.
Price to sales ratio below 1.5
This value metric helps to uncover relative bargains. The formula chooses sales as its guide because sales figures are more difficult for companies to manipulate than earnings and frequently provide a clearer picture of a company's potential value.
Annual earnings higher than the previous year
While sales may be the best indicator of a company's value, the formula considers improvement in earnings as an indicator of a company's financial strength.
Positive stock price appreciation, or relative strength, over 3 and 6-month period
Historically, relative strength has been one of the most influential variables in predicting which stocks will outperform the market.
Select the 30 stocks with the highest 12-month price appreciation
Limiting the portfolio to 30 stocks allows just the top performers to be included, while providing ample diversification
The portfolio is rebalanced once annually, generally in the Fall
https://hennessyfunds.com/funds/equity/individual/f_3/sc_investor/cornerstone_mid_cap_30_fund/p_Quarterly/overview.fs

FYI: (Click On Article title At Top Of Google Search)
This year’s market has not been good for anyone’s health. After the rockiest start ever to a new year, the volatility has continued such that even the recent three-day rally still has stocks down more than 6% as of Thursday. Health-care stocks, after five years of market-beating gains, have been hit particularly hard, down 8.6% for the year so far. The only sector in worse shape is financials, down 12.3%.
In our Jan. 30 cover story, Barron’s told readers it was “Time to Buy Bank Stocks.” Investors would be wise to look at health-care funds as well.
Regards,
Ted
https://www.google.com/#q=Two+Top+Health-Care+Funds+Barron's

http://www.sec.gov/Archives/edgar/data/1141819/000089418916007712/collins-tpm_497e.htm
497 1 collins-tpm_497e.htm SUPPLEMENTARY MATERIALS (497E - STICKER)
Filed pursuant to Rule 497(e)
Registration Nos. 333-62298; 811-10401
Collins Alternative Solutions Fund
A series of Trust for Professional Managers (the “Trust”)
Supplement dated February 19, 2016
to the Prospectus and Statement of Additional Information dated June 28, 2015
The Board of Trustees (the “Board”) of Trust for Professional Managers (the “Trust”), based upon the recommendation of Collins Capital Investments, LLC (the “Adviser”), the investment adviser to the Collins Alternative Solutions Fund (the “Fund”), a series of the Trust, has determined to close and liquidate the Fund. The Board concluded that it would be in the best interests of the Fund and its shareholders that the Fund be closed and liquidated as a series of the Trust effective as of the close of business on February 19, 2016.
The Board approved a Plan of Liquidation (the “Plan”) that determines the manner in which the Fund will be liquidated. Pursuant to the Plan and in anticipation of the Fund’s liquidation, the Fund will be closed to new purchases effective as of the close of business on February 19, 2016. However, any distributions declared to shareholders of the Fund after February 19, 2016 and until the close of trading on the New York Stock Exchange on February 26, 2016 will be automatically reinvested in additional shares of the Fund unless a shareholder specifically requests that such distributions be paid in cash. Although the Fund will be closed to new purchases as of February 19, 2016, you may continue to redeem your shares of the Fund after February 19, 2016, as provided in the Prospectus. Please note, however, that the Fund will be liquidating its assets as of the close of business on February 26, 2016.
Pursuant to the Plan, if the Fund has not received your redemption request or other instruction prior to the close of business on February 26, 2016, the effective time of the liquidation, your shares will be redeemed, and you will receive proceeds representing your proportionate interest in the net assets of the Fund as of February 26, 2016, subject to any required withholdings. As is the case with any redemption of fund shares, these liquidation proceeds will generally be subject to federal and, as applicable, state and local income taxes if the redeemed shares are held in a taxable account and the liquidation proceeds exceed your adjusted basis in the shares redeemed. If the redeemed shares are held in a qualified retirement account such as an IRA, the liquidation proceeds may not be subject to current income taxation under certain conditions. You should consult with your tax adviser for further information regarding the federal, state and/or local income tax consequences of this liquidation that are relevant to your specific situation.
The Adviser will bear all of the expenses incurred in carrying out the Plan.
Shareholder inquiries should be directed to the Fund at 1-855-55-ALT-MF.
Please retain this Supplement with your Prospectus and
Statement of Additional Information for reference.

Fund now has $6B in assets, all classes. the A shares OSMAX is available load waived as NTF. I own OSMYX, institutional version. I called them and if fund is held with financial advisor, can still add. Nice fund.
January 29, 2016
OPPENHEIMER INTERNATIONAL SMALL-MID COMPANY FUND TO SOFT CLOSE ON APRIL 1, 2016
Dear Oppenheimer International Small-Mid Company Fund Shareholder:
In an effort to continue to provide our shareholders with a long-term strategy for success, we are placing limitations
on certain investor purchases into Oppenheimer International Small-Mid Company Fund. We believe
these new limitations will help position the Fund for continued sustainable long-term growth.
Effective as of the close of the New York Stock Exchange on April 1, 2016, the Fund will no longer accept
purchase orders from new investors and existing Fund shareholders will no longer be able to purchase new
shares or exchange shares of other funds into the Fund, subject to certain exceptions including:
• If you own shares in certain types of employer-sponsored retirement plans you can continue to purchase
shares and exchange into the Fund.
• If you own shares through an OppenheimerFunds Portfolio BuilderSM account you can continue to purchase
shares and exchange into the Fund.
• If you own shares in any 529 Plan that currently includes the Fund within one or more of their investment
options, those existing 529 portfolios are not affected.
Distribution and capital gains set to reinvest in Oppenheimer International Small-Mid Company Fund will continue
to reinvest after the close date. If you have automatic purchases established for this Fund and one of
the above exceptions does not apply, your auto purchase feature will be turned off before the effective
date. This will include purchases you make through Asset Builder, exchanges from another Oppenheimer fund
into this Fund (including dividend exchanges) and other automatic purchase methods. If you wish to continue
your automatic investments after the effective date, you will need to choose a different investment to receive
the purchases. Your financial advisor can help you make changes to your account.
We will continue to monitor the Fund to determine if we need to further modify these restrictions on investment
purchases. Please see the prospectus supplement, which is available on our website at oppenheimerfunds.com
for additional details on these and other changes to the purchase restrictions for the Fund.
If you have any questions, please speak with your financial advisor or contact us at 1 800 CALL OPP (225 5677)

My best guess on the very recent PTIAX loss is that it's munis to a small degree, but mainly the HY mortgages -- and if they've ramped up IG corporates since the Dec 31 report, that might be part of the mix too.
I'm basing that WAG on 1 wk return figures: PTIAX is -0.86%, versus only -0.2/-0.3% for the muni funds I follow. HY mortgages have been hit much harder; for two examples of pure HY mtg funds, look at DBSCX (Gundlach) at -0.95% and DMO (cef, 34% leverage) at -2.05% on its NAV. As for corporates, VFICX (73% IG corps) is -0.53%.
No change (yet) for me, Mona. It's not that significant yet compared to accumulated gains. But if HY mortgages stay weak for longer, I'd prob'ly shift some shares.
Edit: Forgot about the taxable munis that as of 12/31 were more than half the muni sleeve. Assuming they're on the order of BAB, that could be a significant loser for the fund the last week: BAB's NAV is down 1.19%. So it's probably HY mtg and taxable munis doing the damage.

Lipper puts VBINX in the Growth Allocation category. There are 113 such funds in its database ending January 2016, at least 10 years old, oldest share class only, open and closed.
VBINX stacks up pretty well. Here is list from top, sorted by 10 year annualized total return (APR), which includes expenses, reinvested dividends, and any max front load. (As always, no accounting for category drift or survivorship.)

It beat out Dodge & Cox Balanced DODBX, which has delivered 5% APR, placing it 41 out of 113.
Here is same list based a Martin Ratio, which is the risk return adjusted metric used to computed MFO Return Group ratings. Martin is excess total return over 90 day TBill divided by Ulcer Index, as described in the paper by Peter Martin, entitlded: An Alternative Approach to the Measurement of Investment Risk & Risk-Adjusted Performance.

If we look across all the asset allocation categories, VBINX ranks even better.
MFO groups the following categories as Asset Allocation (AA) type: Target Today, Target 2010, Target 2015, Target 2020, Target 2025, Target 2030, Target 2035, Target 2040, Target 2045, Target 2050, Target 2055+, Conservative Allocation, Moderate Allocation, Growth Allocation, Aggressive Growth Allocation, Absolute Return, Convertible Securities, Flexible Portfolio, Retirement Income.
There are 470 such funds ending January 2016, at least 10 years old, oldest share class only, open and closed.
Here's how VBINX stack up on that list, again, by APR:

Do you believe GLRBX, FPACX, OAKBX and BERIX will still be the best performing funds 20 years from now? If the answer is no, then can you give me the names of the 4 funds that will outperform so I can buy them today? VBINX outperforms 90% of everything else so do you want to risk your capital attempting to pick the best youngest managers you have never heard of today from 1000 balanced funds? How many start up balanced funds have come into existence since 1997? Double that? So you would have had to pick the best 4 out of 2000 in 1997 in order to get the returns you speak of.

@willmatt72 I agree that tax considerations are important for funds held in taxable accounts. But I also feel that the "magic number" tax cost (or after-tax return), while offering some insight, is not a particularly refined figure. The best it can do is tell you whether a fund is a stinker from a tax perspective.
Start with the basic fact that different people are in different tax brackets - I would never use a 20% cap gains tax rate, yet that is what is typically used. Quoting from M*'s tax cost ratio methodology: "Per the SEC’s guidance, after-tax returns are calculated with the highest tax rates prevailing at the time of the distribution, as if the investor were in the highest tax bracket."
(This is probably incorrect even for those in the top bracket, as I think it excludes the Medicare surtax of 3.8% on investments, and of course ignores state taxes.)
Then there is the problem that these calculations almost never (except in prospectuses) show the tax effect if one liquidates. That's important because if one is paying taxes on cap gains distributions now, one will pay less in taxes when one liquidates. So while cap gains distributions do have an effect on total returns long term, the effect is not as pronounced as one is led to believe from usual tax cost calculations.
Some of these factors increase the actual tax cost (such as state taxes, surtaxes including Medicare and phaseout of exemptions, etc.), while others decrease the actual tax cost (reduced cap gains on liquidation, not being in the top tax bracket, etc.). It's all very personal - each individual's situation is different.
That's why whatever after tax figures you get are at best crude approximations, and why I either do a much more detailed analysis or use the figures provided only as a filter (don't get a very tax inefficient fund), and not to compare funds.

I think some people use the *M tax adjusted returns feature as a guide, not as the last word on the subject. But it does serve an important purpose and does give investors a general overview of a fund's tax efficiency. The *M guide serves as an important feature to determine returns given tax considerations. Death, taxes and all that. Personally, I do compare tax adjusted returns because they can have a rather large effect on ultimate returns, especially with a high value portfolio such as mine. Having a "stinker" in terms of tax perspective can make a big difference in one's portfolio. Comparing 10-year returns without tax considerations is not an entirely accurate comparison, IMHO. It can become a rather large factor when comparing balanced funds.

@willmatt72 I agree that tax considerations are important for funds held in taxable accounts. But I also feel that the "magic number" tax cost (or after-tax return), while offering some insight, is not a particularly refined figure. The best it can do is tell you whether a fund is a stinker from a tax perspective.
Start with the basic fact that different people are in different tax brackets - I would never use a 20% cap gains tax rate, yet that is what is typically used. Quoting from M*'s tax cost ratio methodology: "Per the SEC’s guidance, after-tax returns are calculated with the highest tax rates prevailing at the time of the distribution, as if the investor were in the highest tax bracket."
(This is probably incorrect even for those in the top bracket, as I think it excludes the Medicare surtax of 3.8% on investments, and of course ignores state taxes.)
Then there is the problem that these calculations almost never (except in prospectuses) show the tax effect if one liquidates. That's important because if one is paying taxes on cap gains distributions now, one will pay less in taxes when one liquidates. So while cap gains distributions do have an effect on total returns long term, the effect is not as pronounced as one is led to believe from usual tax cost calculations.
Some of these factors increase the actual tax cost (such as state taxes, surtaxes including Medicare and phaseout of exemptions, etc.), while others decrease the actual tax cost (reduced cap gains on liquidation, not being in the top tax bracket, etc.). It's all very personal - each individual's situation is different.
That's why whatever after tax figures you get are at best crude approximations, and why I either do a much more detailed analysis or use the figures provided only as a filter (don't get a very tax inefficient fund), and not to compare funds.

VBINX (a simple 60/40 fund) is ranked #16 out of all 1194 Allocation (Balanced) funds based on Fidelity's Mutual Fund research site over the last 10 years. Therefore 98.6% of all the CFA's, MBA's, ChFA and PhD's portfolio managers cannot outperform a simple low cost index. Why do we even spend time discussing the best funds?
Over any 1, 3, 5 or 10 year timeframe compared to only Moderate Allocation OR all Allocation funds, VBINX is better than 89.5% of any actively managed fund. Amazing. The really great managers are rare.

It is not clear how you arrived at these precise numbers. Here's Fidelity's fund screener for

all the allocation funds (i.e. all share classes) it carries. I get 1,870 funds. But if I sort on 10 year returns (so that all the share classes that haven't been around drop to the bottom), I get "just" 865. And that includes multiple share classes per fund.
My best guess is that you may have used Fidelity's screener to pick all subcategories of Allocation funds with "Allocation" in their name: Conservative, Aggressive, Moderate, Tactical, and World. If one does this and excludes funds that are closed at Fidelity (the screener's default - good for shopping but less so for research), that results in 1195 share classes. Close enough since these figures can shift on a daily basis.
In this cohort, VBINX isn't even Vanguard's best fund, based on 10 year performance. That goes to Wellesley VWINX. (Actually the top two Vanguard share classes would both be Wellesley, except that Fidelity doesn't sell VWIAX).
Note that I haven't disagreed with your thesis, but with your numbers. From a scientific method perspective they are suspect because they're not easily reproducible. Also, extreme figures invite inspection, and a small deviation can cast doubt up the greater thesis, rightly or wrongly.
Had you suggested that 80% or so of actively managed allocation funds did not do as well over ten years, I likely wouldn't have even looked at the data. Fidelity's own page on VBINX says that over 10 years, it beat 88% of 500 other (501 total) moderate allocation funds. Which means that over 10 years, there were about 60 moderate allocation funds (let alone other types of allocation funds) that beat VBINX. Four times as many as the fifteen implied by a #16 ranking for VBINX.
Just so we don't confuse funds and share classes, out of those 1195 funds I could coax out of Fidelity's screener, the funds (not share classes) ranking above VBINX include:
(1) Columbia Balanced (CBLAX and CBCLX), (2) John Hancock Balanced (SVBIX),
(3) Wellesley (VWINX), (4) Janus Balanced (JABAX),
(5) AMG Chicago Equity Partners Balanced (MBESX and MBEAX)),
(6) Loomis Sayles Global E&I (LSWWX and LGMAX), (7) Berwyn Income (BERIX),
(8) Boston Trust Asset Mgmt (BTBFX), (9) First Eagle Global (SGIIX and SGENX),
(10) Intrepid Capital (ICMVX and ICMBX), (11) LKCM Balanced (LKBAX), (12) Ivy Balanced (IBNAX),
(13) Wells Fargo Index Asset Allocation (WFAIX and SFAAX), (14) Mairs & Power Balanced (MPAOX),
(15) Transamerica Multi-Managed Balanced (TBLIX and IBALX),
(16) American Funds American Balanced (ABALX), (17) Tributary Balanced (FBOPX & FOBAX),
(18) Hennesy E&I (HEIFX), (19) Westwood Inc. Opp (WHGIX and WWIAX),
(20) Thornburg Investment Inc. (TIBIX), (21) Puritan (FPURX), (22) FPA Crescent (FPACX),
(23) Eaton Vance Balanced (EIIFX), (24) Oakmark E&I (OAKBX), and (25) Ivy Asset Strategy (WASAX).
T. Rowe Price Cap Ap (PRWCX and PACLX) would be at the top of the list, except that it is a closed fund, and I had to exclude closed funds to come close to your 1194 fund count. Likewise, Vanguard's other "vanilla" actively managed allocation fund - Wellington - would have come out ahead of VBINX also, except that Fidelity thinks it is a closed fund. (It's not, but you can't open a new position at Fidelity.)
If we throw out the four world allocation funds (Loomis Sayles Global, First Eagle Global, Thornburg Investment Income, and Ivy Asset Strategy), we're still left with 21 distinct funds, let alone share classes outperforming VBINX over ten years. Well more than 15 funds, and all the remaining funds are conservative, moderate, or aggressive allocation funds - no offbeat stuff like convertibles.
If I had a better idea of how you're getting your figures (or to put it another way, what factors you're looking at), it would be easier to discuss. You started with a Vanguard (marketed) fund, so one could easily ask: at Vanguard, why even look at Vanguard-managed funds (VBINX, VGSTX), when the Wellington-managed funds (Wellesley, Wellington) have done better?

Interesting analysis. Since VBINX is considered a moderate allocation fund, did you compare it with other moderate allocation for tax-adjusted returns over 10 years? As we all know. taxes can play a large part in determining the ultimate returns. I plugged in a few of the funds compared to VBINX for a 10-year tax adjusted returns and they don't hold up. For example, BERIX, TIBIX and MAPOX were behind VBINX. I didn't even look at your entire list, just popped in a few for analysis. Some investors hold balanced funds in taxable accounts so tax-adjusted returns should be taken into consideration for those who do.

VBINX (a simple 60/40 fund) is ranked #16 out of all 1194 Allocation (Balanced) funds based on Fidelity's Mutual Fund research site over the last 10 years. Therefore 98.6% of all the CFA's, MBA's, ChFA and PhD's portfolio managers cannot outperform a simple low cost index. Why do we even spend time discussing the best funds?
Over any 1, 3, 5 or 10 year timeframe compared to only Moderate Allocation OR all Allocation funds, VBINX is better than 89.5% of any actively managed fund. Amazing. The really great managers are rare.

It is not clear how you arrived at these precise numbers. Here's Fidelity's fund screener for all the allocation funds (i.e. all share classes) it carries. I get 1,870 funds. But if I sort on 10 year returns (so that all the share classes that haven't been around drop to the bottom), I get "just" 865. And that includes multiple share classes per fund.
My best guess is that you may have used Fidelity's screener to pick all subcategories of Allocation funds with "Allocation" in their name: Conservative, Aggressive, Moderate, Tactical, and World. If one does this and excludes funds that are closed at Fidelity (the screener's default - good for shopping but less so for research), that results in 1195 share classes. Close enough since these figures can shift on a daily basis.
In this cohort, VBINX isn't even Vanguard's best fund, based on 10 year performance. That goes to Wellesley VWINX. (Actually the top two Vanguard share classes would both be Wellesley, except that Fidelity doesn't sell VWIAX).
Note that I haven't disagreed with your thesis, but with your numbers. From a scientific method perspective they are suspect because they're not easily reproducible. Also, extreme figures invite inspection, and a small deviation can cast doubt up the greater thesis, rightly or wrongly.
Had you suggested that 80% or so of actively managed allocation funds did not do as well over ten years, I likely wouldn't have even looked at the data. Fidelity's own page on VBINX says that over 10 years, it beat 88% of 500 other (501 total) moderate allocation funds. Which means that over 10 years, there were about 60 moderate allocation funds (let alone other types of allocation funds) that beat VBINX. Four times as many as the fifteen implied by a #16 ranking for VBINX.
Just so we don't confuse funds and share classes, out of those 1195 funds I could coax out of Fidelity's screener, the funds (not share classes) ranking above VBINX include:
(1) Columbia Balanced (CBLAX and CBCLX), (2) John Hancock Balanced (SVBIX),
(3) Wellesley (VWINX), (4) Janus Balanced (JABAX),
(5) AMG Chicago Equity Partners Balanced (MBESX and MBEAX)),
(6) Loomis Sayles Global E&I (LSWWX and LGMAX), (7) Berwyn Income (BERIX),
(8) Boston Trust Asset Mgmt (BTBFX), (9) First Eagle Global (SGIIX and SGENX),
(10) Intrepid Capital (ICMVX and ICMBX), (11) LKCM Balanced (LKBAX), (12) Ivy Balanced (IBNAX),
(13) Wells Fargo Index Asset Allocation (WFAIX and SFAAX), (14) Mairs & Power Balanced (MPAOX),
(15) Transamerica Multi-Managed Balanced (TBLIX and IBALX),
(16) American Funds American Balanced (ABALX), (17) Tributary Balanced (FBOPX & FOBAX),
(18) Hennesy E&I (HEIFX), (19) Westwood Inc. Opp (WHGIX and WWIAX),
(20) Thornburg Investment Inc. (TIBIX), (21) Puritan (FPURX), (22) FPA Crescent (FPACX),
(23) Eaton Vance Balanced (EIIFX), (24) Oakmark E&I (OAKBX), and (25) Ivy Asset Strategy (WASAX).
T. Rowe Price Cap Ap (PRWCX and PACLX) would be at the top of the list, except that it is a closed fund, and I had to exclude closed funds to come close to your 1194 fund count. Likewise, Vanguard's other "vanilla" actively managed allocation fund - Wellington - would have come out ahead of VBINX also, except that Fidelity thinks it is a closed fund. (It's not, but you can't open a new position at Fidelity.)
If we throw out the four world allocation funds (Loomis Sayles Global, First Eagle Global, Thornburg Investment Income, and Ivy Asset Strategy), we're still left with 21 distinct funds, let alone share classes outperforming VBINX over ten years. Well more than 15 funds, and all the remaining funds are conservative, moderate, or aggressive allocation funds - no offbeat stuff like convertibles.
If I had a better idea of how you're getting your figures (or to put it another way, what factors you're looking at), it would be easier to discuss. You started with a Vanguard (marketed) fund, so one could easily ask: at Vanguard, why even look at Vanguard-managed funds (VBINX, VGSTX), when the Wellington-managed funds (Wellesley, Wellington) have done better?