After today will be up to around 6% in the junk corps with 84% in the junk munis and the rest in cash. Would like to sell some of the munis to get heavier in the corps if the market cooperates by working higher. Then again, the worst may be yet to come in the corps if the *experts* are correct. And as we know, the *experts* are never wrong.
Edit: Make that 8% junk corps.

Today is looking like the 5th consecutive day of gains in the junk corporates (and no, HYG and JNK don't tell the story) Quite a divergence from equities. Some of the better open end are down less than 1% for the year. Not exactly the crash we have been lead to believe that is occurring in that sector. Will be interesting to see if the cash market gains continue after the Fed meeting. Will be lightening up on the munis. My meager 8% exposure to the corps may have to be increased quite a bit.

Like most years, M* blew a number of these. Brown Capital has been closed for a couple of years, but they neglected to mention this. ANWPX is not an international fund. Even M* calls it a Global Stock fund, with holdings almost evenly divided between U.S. and foreign stocks. They clearly overlooked true international fund such as WAIOX (9.4% gain), DRIOX (12.6% gain), TGVIX (6.7% gain), and SGOVX (2.3% gain), all of which were remarkable in a year when EAFE was negative. And then there is MAPIX (4% gain when China killed EMs and much of Asia. Then PTSHX as the best bond fund? At least with NEARX you would have gotten a better return and not been taxed, if M* was looking for a good short-term bond. Heck, I could have been in CDs the last 2 years and been ahead of PTSHX. What were they thinking? And no AQR for alternative. I think VMNFX is an ok option, but it is not a true market neutral fund. I will stop throwing stones. In the end, these so-called awards a really nothing more than publicity events for M* and for the funds named.

Nothing in the capital markets is structurally safe and that is the reality. Just a matter of degrees.
With junk bonds, one has to worry whether the crisis is just a temporary mark to market induced crisis or a default induced crisis or if both how much of each. If just the former, then just holding tight would restore much of the values riding out current value fluctuations unless there is a huge rush to the exits forcing sells in the underlying funds realizing a loss. If the latter then the credit quality of the underlying bonds have deteriorated and some of them may become worthless.
To me, it seems like it is the fear of the latter that is causing a mark to market crisis in this area for now rather than actual defaults happening. The defaults could happen as much as feared or it may be overblown in which case, they all bounce back up creating buying opportunities.
These days markets are based on trying to front-run possibilities than wait for something to become real.

High annual turnover rates in excess of 200% or more tend to have larger distribution on short term capital gain.
Also international funds that use currency hedging also have larger distribution on dividend.

Large outflows turn out to be a double whammy. Funds may be forced to liquidate securities with formerly unrealized gains, and those gains get divided among fewer remaining shares.

Large outflows can also trigger realization of capital gains.
However, predicting which funds will make distributions is also complicated by the fact that some funds are aware that their large embedded capital gains are being watched and deterring investors from investing in those funds. So, what these funds then do is periodically realize their capital gains so that future investors are not deterred by the size of their embedded cap gains.

Either I'm reading the DOL proposal wrong or the news article is an insurance industry PR piece.
If you want a "short" summary, here's the DOL fact sheet:
http://www.dol.gov/ebsa/newsroom/fsconflictsofinterest.html
My two line summary: Fiduciary responsibility will now generally apply to advice on IRAs (so if brokers intend to avoid that responsibility, they'll have to stop selling IRAs altogether, which won't happen), and virtually nothing gets special treatment or singled out. If annuities lose market share, it's because they are often not the best investments (especially inside of IRAs), not because they're being picked on.
I'm still wading through the proposal - which is long and takes several readings to appreciate. With that qualification (i.e. I may not know what I'm talking about), here are some responses to the article:
- "annuity retirement accounts [would be added] to the list of investments for which brokers [have to act as fiduciaries]"
Sure, and so would mutual funds, and anything else in an IRA. What's being changed is that if you get individualized advice on an IRA (or 401(k)), the adviser would now be considered a fiduciary, regardless of the investment. The proposal says:

Today, ... many ...advisers have no obligation to adhere to [fiduciary standards], despite the critical role they play in guiding ... IRA investments. Under [the Internal Revenue] Code, if these advisers are not fiduciaries, they may operate with conflicts of interest that they need not disclose and have limited liability under federal pension law for any harms resulting from the advice they provide. Non-fiduciaries may give imprudent and disloyal advice ...
With this regulatory action, the Department proposes ... a definition of fiduciary investment advice that better ... protects plans, participants, beneficiaries, and IRA owners from conflicts of interest, imprudence, and disloyalty.

The proposal goes on and on about how high cost funds are costing IRA investors a percent or more a year. I don't see any similar criticism of retirement annuities.

The underperformance associated with conflicts of interest--in the mutual funds segment alone--could cost IRA investors more than $210 billion over the next 10 years and nearly $500 billion over the next 20 years. Some studies suggest that the underperformance of broker-sold mutual funds may be even higher than 100 basis points, possibly due to loads that are taken off the top and/or poor timing of broker sold investments

- "The extra work required by the new rules ... would likely push brokers away from selling annuities and toward mutual funds and other fee-based investments"
The extra work imposed by the new regulations would apply to all IRA investments, so annuities wouldn't be disadvantaged. As a result of industry comments, DOL streamlined the regulations to reduce the overhead. DOL acknowledges compliance costs:

The Department nonetheless believes that these gains alone would far exceed the proposal's compliance cost.... For example, if only 75 percent of the potential gains were realized in the subset of the market that was analyzed (the front-load mutual fund segment of the IRA market), the gains would amount to between $30 billion and $33 billion over 10 years.

- "They feel the government is favoring mutual fund companies like Vanguard over insurers"
The proposed regs allow advisers to keep their front end loads, their wrap fees, etc. so long as they are reasonable under the circumstances.

Investment advice fiduciaries to IRAs could still receive commissions for transactions involving non-securities insurance and annuity contracts, but they would be required to comply with all the protective conditions [that apply to mutual funds]

For the full set of DOL docs, see: http://www.dol.gov/ebsa/regs/conflictsofinterest.html

@rlyke12
Indicators of size...hmm, that's a toughy. And I would agree with msf that unrealized CGs (and, for that matter, unrealized losses) aren't very useful either. However, there is a situation where you can tell, if you notice sizeable CGs building up in a fund and are using that as a reason to get out or not invest in it, whether concern about a large CG distrubution is warranted. But you have to be willing to do the homework!
Let's say a fund has a bad year, or has a so-so year, with some or a lot of capital losses but no CGs realized. Rather than let the realized losses go to waste, mutual funds can "carry them forward," for many years (up to 5?), but they have to designate to the IRS how much and in which years they will be used. So, let's say a fund's bad year was 2010, with realized losses of $200M; they designate future usage of $50M for 2013, $70M for 2014, and $80M for 2015. You come along as an interested new investor in the fund in 2015, but see that fund has had a good 4 yr run and appears to be in harvesting mode, i.e. realized CGs are up to $50M, and it's only June. Maybe you should wait until Jan., you think, to avoid the tax hit. After all, why should you pay tax on someone else's CG?
And that is where all that minutia, in the SAI and in the back pages of the annual and semi-annual reports becomes quite relevant to your concern. Losses carried forward to what years are listed in detail there. So, in the above example, you go to the SAI, find this "old history" of which you were unaware, and find out that CGs tax is not one of the variables in play for deciding whether you should invest now or wait--- for 2015, most all of it is gonna be cancelled out at year's end.

IMHO the only somewhat reliable indicator is if there's been a management change to a new manager with a different investing style. For example, I'd expect a larger distribution with a management change at Fidelity than at T. Rowe Price where there's an effort at smooth transitions and continuity.
The larger distributions this year (2015) were not unexpected, because the market went up so much in 2014 and funds didn't seem to distribute much that year. That meant they were sitting on securities that had gone up a lot, and so were candidates to be sold off in 2015.
But ... while funds tended to have larger than average distributions, there were some funds with outsized gains, and I couldn't even guess at any common factor. So I'll beg off regarding indicators of size, beyond what I've already described.
More generally, you can look at figures like M*'s tax cost ratio to get a sense of a fund's typical distributions. That should correlate somewhat with turnover. I don't find a fund's unrealized capital gains particularly predictive - a fund may own the same appreciated securities for many years, even as it trades in and out of others.

What indicators are there, if any, that a mutual fund will likely make capital gain distributions later during the year? Is there any technical indicator one could use to predict the size of those distributions?

I did initiate a small position in CAPE on Thursday instead of adding to my DSENX. As an ETN, it throws off no income or capital gains. Small volume means it can't be unloaded without taking a hit.

My takeaway is to watch whether Berwyn Income Fund, with current AUM in the neighborhood of $1.7B, will become an asset gatherer for the acquiring firm.
Most striking was a phrase in the TriState Capital Holdings (TSC) release that its subsidiary, Chartwell, hoped to "meaningfully accelerate growth in client assets..."
That's never a good sign. (Remember, Berwyn Income Fund closed in 2010-2011, when it could not find new investment opportunities)
As for Berwyn, it says neither the objectives, invest team or process will change. And it says "total fund expenses are to remain unchanged for two years."
***
Also, the offerings of Berwyn and Chartwell appear somewhat redundant.
Chartwell's two mutual funds: small cap value (CWSIX-$1.7B market cap) and short duration (CWFIX- mostly BB-rated corporate bonds).
Berwyn: Berwyn (BERWX-$620m market cap) and Berwyn Income (BERIX- >%50 corporate bonds, BBB to B )
I presume the acquisition settles succession issues for the boutique firm - Berwyn CEO and president Robert Killen, and the principals are well acquainted, only a few miles apart out on the Main Line of Philadelphia.

Why I am able to hold funds like fpacx is because I don't reinvest dividends and when folks start worrying, I look for entry point to add.
I am probably in the minority here who thinks, getting hoodwinked by the argument of compunding returns and never taking any money off the table, keeping reinvesting distributions, and then experiencing bad markets leads to bad decisions. Better to take some paper gains off the table.
So many funds made sizeable distributions last year. All that money for me is sitting in cash waiting to be deployed back, instead of being down additional 10%. Not to mention I don't need to hire a CPA come tax time

FYI: The CEO of Doubleline Capital and newest member of the Barron's Roundtable likes closed end funds and other ways to buy oversold assets at an even bigger discount. His first pick: Annaly Capital.
Regards,
Ted
http://www.barrons.com/video/jeffrey-gundlach-how-to-get-a-12-yield/FFE95EFA-55AC-47BC-AB0C-248A5531FCDA.html

@TheShadow Well, that is a "second order" question, which tells me (as if I didn't realize it already) that you've walked around a few blocks in the MF World. I did intend to pursue that question while sniffing around the Chartwell site, but the lights in the room started to flicker and spooky music started to play, so I thought it best to get out and try again later. :)
I was thinking, given the big honking FEL they have on their 2 young funds, Chartwell might do something with good ol' Z share crap; i.e. as part of the "adsorption" of Berwyn funds, they'd convert present Berwyn shareholder accounts to special Z share status (no load) and create another share class for future retail investors (with the FEL of their current funds). I'm still of this inclination, because it is clear from TriState Capital's press releases that this acquisition is all about asset gathering and fee income extraction. The bank holding company is awfully young, and I suspect these two purchases (Chartwell and now Berwyn) may have been funded almost entirely by debt, so maybe this emphasis was done to placate bank shareholders. I dunno.
However, your observation does raise alternative possibilities. The question of which way they'll go with initial and subsequent investment also remains an open one (Berwyn 3000/250 vs. Chartwell 1000/100).
Merging the 2 operations (Berwyn and Chartwell) shouldn't be too taxing; they are about a 5 minute drive from each other:
http://www.mapquest.com/directions/from/us/pa/berwyn/19312/1189-lancaster-ave-40.043427,-75.453515/to/us/pa/berwyn/19312/1235-westlakes-dr-40.06315,-75.471817

@heezsafe
Since the Killen Group is being acquired, what are the chances are that those with existing investments in the Berwyn Funds will be converted to "I" shares (similar to what happened with the Stratton Funds being acquired by Sterling Capital. I purchased the Stratton Small Cap Fund before the cut-off; I now have Sterling Capital Special Opportunities "I" class upon Jim0445's recommendation or the acquisition of the Pennsylvania Avenue Event Driven Fund (in which Quaker grandfathered existing Penn shareholders from paying the "A" class load))?
Chartwell's prospectus for the Short Duration High Yield Fund indicates that on January 15, 2016 the "A" shares were terminated and only the "I" shares exist. Investors in the "A" shares had the right to convert to "I" shares.
It appears the same cannot be said for the Small Cap Value Fund though.

And here is the website of the new advisor for the Berwyn Funds, Chartwell Investment Partners ("a wholly-owned subsidiary of TriState Capital Holdings, Inc., a registered bank holding company based in Pittsburgh, Pennsylvania"), who will be swallowing The Killen Group, and all of the Berwyn Funds, whole:
http://www.chartwellmutualfunds.com/index.html

Here is a link discussing the acquisition of The Killen Group:
http://www.businesswire.com/news/home/20151216006307/en/TriState-Capital-Expand-Chartwell-Investment-Management-Business
Here is an older link discussing Tri-State Capital acquiring Chartwell Investment Partners:
http://www.businesswire.com/news/home/20140107006804/en/TriState-Capital-Acquire-Chartwell-Investment-Partners

http://www.sec.gov/Archives/edgar/data/1135300/000089418916006930/buffalo_497e.htm
497 1 buffalo_497e.htm SUPPLEMENTARY MATERIALS
--------------------------------------------------------------------------------
Filed pursuant to Rule 497(e)
Registration Nos. 333-56018; 811-10303
Buffalo Emerging Opportunities Fund
Buffalo Small Cap Fund
Each a series of Buffalo Funds®
Supplement dated January 21, 2016
to the Prospectus dated July 29, 2015, as supplemented on October 13, 2015
--------------------------------------------------------------------------------
Effective immediately, the Buffalo Emerging Opportunities Fund (the “Emerging Opportunities Fund”) and the Buffalo Small Cap Fund (the “Small Cap Fund”) (collectively, the “Funds”), each a series of Buffalo Funds, will re-open to new investors. The Emerging Opportunities Fund had been closed to new investors since November 18, 2013 and the Small Cap Fund had been closed to new investors since April 26, 2010. All references to the Funds being closed to new investors are hereby deleted from the Prospectus.
The Funds are reopening because Kornitzer Capital Management, Inc., the Funds’ investment advisor, believes that cash flows would allow the Funds to take advantage of attractive opportunities in each Fund’s universe of companies.
The Funds will remain open until further notice.
For additional details, please call the Funds at 1-800-49-BUFFALO.
Please retain this supplement with your Prospectus.

FYI: Many investors and strategists are guardedly bullish about income prospects for real estate investment trusts (REITs) this year. Todd Rosenbluth, director of ETF and mutual fund research for S&P Capital IQ, likes the outlook for REIT dividend increases this year if REIT fundamentals remain strong, "as we think they will," he told IBD via email
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MjEzOTYwMDM=
Enlarged Graphic:
http://news.investors.com/photopopup.aspx?path=WMUT90-012116.gif&docId=790651&xmpSource=&width=1000&height=829&caption=&id=790652