I was a regular contributor to FundAlarm 1999-2002 but had to put investing on hold since entering seminary in August 2002. It’s great to see so many familiar names from those days! Looks like I missed an interesting time in the markets from 2003 until now. No? Gone is any trace of irrational exuberance from my expectations going forward. My wife and I are debt free other than a reasonable mortgage at 5.25% and a smallish student loan at 3.25% interest. We will be able to fully fund 403bs at TIAA-CREF and Fidelity soon. We also have an inherited IRA invested in Windhaven’s ETF managed moderate portfolio at Charles Schwab. The below proposed portfolio will be in our Schwab Roth IRAs and will only be invested in no-load, NTF mutual funds, rebalanced every January. Our time horizon is at least 10 years. We will dollar cost averaging into cash in these Roths beginning January 2013 making appropriate rebalances every January going forward. At least that’s the plan. Any input from MFO, particularly regarding VAFGX v FVALX and WTIFX v GPIOX, would be appreciated. For any other options I’ve most certainly overlooked, please feel free to advise. I’m not interested in sector plays at least for this initial return to investing. I’ll let the active managers make those calls because that’s what they’re paid to do. I have a glass half full perspective and don’t think the sky is falling. Some may say I’m a dreamer…but I’m not the only one. Jonas Ferris at MaxFunds really spoke for me last October. Anyway, thanks in advance for the input. Rick, the glampig
http://www.maxfunds.com/?q=node/602
20% MVPFX-Marathon Value Portfolio
10% RWGFX-RiverPark/Wedgewood Retail
10% WSCVX-Walthausen Small Cap Value
10% VAFGX-Valley Forge
or FVALX-Forester Value N
10% HLMNX-Harding Loevner International Eq Inv
05% WTIFX-Westcore International Small Cap
or GPIOX-Grandeur Peak Intl Opportunities Inv
20% MWTRX-Metropolitan West Total Return Bond M
10% LSGLX-Loomis Sayles Global Bond Retail
05% RPHYX-RiverPark Short Term High Yield Retail

Dear friends,
In our original discussion on RPHYX, I argued that the fund's turnover was artificially inflated by the fact that they're constantly redeeming bonds. One respondent argued that redeemed bonds do not count in the fund's turnover ratio. Since I wasn't sure, I asked.
RiverPark's President, Morty Schaja, writes:

Turnover is generally based on the lower of fund sales and purchases to take into account fund flows. Redeemed bonds count. The average duration of the fund is about six months and nearly 70% of the portfolio has an expected maturity of less than two months. Therefore, securities that will mature or be redeemed alone, will contribute to a high turnover. While the transaction costs of redeemed bonds is negligible, the Fund does incur transactions costs when it goes into the market to reinvest the proceeds from a redeemed bond. These expenses are not included in the Fund’s operating expense ratio, but have a negative [e]ffect on the Fund’s investment performance. The Fund’s return since its inception in October 2010 of 4.22% is net of all expenses including transaction costs.

Mr. Schaja reaffirms the manager's expectation on the expense recovery: the fund will not charge more than 1.25%, though it may delay decreasing the expense ratio by a bit so that the adviser can recoup some of the money it's now losing on the fund's operations.
For what it's worth,
David

Reply to @Derf: Hi, Derf.
Over the past 12 months, RPHYX has returned 3.49% (through 12/08/11). It's a hard fund to benchmark. Morningstar considers it a high yield fund, which is understandable but wildly inappropriate since the risk/return characteristics of the called (or likely-to-be-called) bonds in their portfolio is very different from a typical HY fund. The best of the high-yield one year CDs pay 1.1%. MetWest Ultra Short Bond (MWUSX) is up 0.5%, Wells Fargo Ultra Short (STADX) is 0.4%, Fidelity Advisor Ultra Short (FUBIX) is 0%. Vanguard Short-Term Bond (BSV) is up about 2.9%.
We can say that share price (i.e., NAV) volatility is about 1%. That is, the 52 week range of share prices has been between $9.86 - $10.03 against a $10.00 NAV. Much of the NAV drop, though, is illusory. Two reasons. First, it assumes that the fund is going to try to send their bonds rather than hold them to redemption. In general, they don't. Second, most is driven by monthly income distributions.
For what it's worth,
David

Dear friends,
The thread "RPHYX Expense Ratio" evolved to address several other questions. Since they seemed sensible and I didn't want to trust my memory, I asked the fund's manager - David Sherman of Cohanzick Management - if he'd take a moment to share some information. He did.
1. On the fund's high turnover: he suspects that it's a statistical artifact since the fund actually trades very little.

Cohanzick executes very few actual sales in the portfolio (and we can get a specific idea for you) and when Cohanzick does execute sales the transactions occur generally to rebalance the portfolio with a more attractive and generally higher yielding position. Another potential sale might be to meet mutual fund outflows; although I cannot recall a recent sale for this purpose.
Occasionally, we may also sell for credit purposes. Again, I cannot think of a recent specific example at this time but a sale could occur if a credit concern or original premise of purchase is not panning out.

He's very aware of the frictional costs of trading, especially such short-term products, and so "we don’t generally sell."
2. On the fund's expense ratio: because he's a sub-adviser, the expense ratio reimbursement is not under his control but he believes that the 1.25% cap remains a ceiling. That is, even if RiverPark attempts to recapture the previously waived expenses, their recapture still would not push the total e.r. about 1.25%.
3. On the strategy's capacity: the exact capacity is determined by market conditions. That said, "As a general rule of thumb, we believe our capacity is probably between $500MM and $1,000MM. Obviously as we grow and the market evolves, we will continue to evaluate. I am prepared to soft or hard close the mutual fund when deemed necessary."
Thanks to Mr. Sherman and the folks at RiverPark for their quick response. Their willingness to share makes a big difference.
With respect,
David

Fidelity reports ER for RPHYX over 2%. IS this correct?
Prinx

In 2008 THOPX made 2 jumps up and down by about 10% each. Does not look like cash... How about RPHYX which was discussed here?

Reply to @MaxBialystock:

Here's what I'm holding right now:
1) Cash: 0%
2) MAPIX: 34.24% (Trad. IRA)
3) PREMX: 41.83% (rollover IRA from old 403b)
4) MACSX: 3.12% (regular, taxable investment account)
5) PFE (Pfizer) ---already a piece of the inheritance: 14.83%
6) Israel government zero-coupon bond: pays 5.68%, almost doubling my money at maturity, bought in 2003 and maturing in 2013.

Problem with your portfolio is that your portfolio is missing the core asset classes. You tend to invest in supporting asset classes before you invest in core classes.
I think you are missing a good general purpose bond fund such as MWTRX or TGMNX. You intend to add a bond fund but you are looking to the HY type. I think HY should have supporting role, not core. However, I would consider holding a small amount (~5%) on RPHYX.
I think PFE is a good stock but nevertheless it can't replace an asset class. Over time I would replace it slowly with something like YAFFX or YACKX.
I would also add a general purpose international fund such as ARTKX or ARTGX.
If you are concerned about pure stock or bond asset classes, consider balanced funds to replace a portion of your holdings. Consider: FPACX, PRPFX, OAKBX, GLRBX, BERIX.

Shareholder since late July. Income $900, return $600 due to a few cents erosion in NAV.
Distributions are volatile, Sept $300, Oct $150, a difference of 50%. After three months
ROI is seventy two basis points (0.72%) according to Quicken. Far less volatile to date than FFRHX/Fidelity Floating Rate, another holding (1% vs. 6% range over the last six months.)
http://finance.yahoo.com/q/bc?s=FFRHX&t=6m&l=on&z=l&q=l&c=RPHYX

You're exactly write about reading my profiles: these are not recommendations for anyone to buy a particular fund nor a signal that I'm buying them. Most profiles close with either a statement of skepticism or a recommendation to for a particular type of investor ('folks looking for a conservative core holding") add it to their due-diligence list. Whenever I own, or intend to purchase, a fund, I try to flag that fact.
For what interest it holds, I've got three portfolios: very conservative (which we have in lieu of a savings account), moderately conservative (my non-retirement holdings) and moderately aggressive (my 403b and Roth). In general, the very conservative funds avoid equities and the moderately conservative ones have mandates which give their managers some flexibility about where to invest. Only about 5% of the very conservative portfolio is investing in stocks, which about 40% of the moderately conservative one is. That latter estimate changes as the managers shift their equity allocations, of course.
Here are the funds in the first two, in order of their weight in the portfolio:
Very conservative (up about 3.5% YTD):
T. Rowe Price Spectrum Income (RPSIX), a fund of funds with low expenses and about a 15% equity stake
Hussman Strategic Total Return (HSTRX), increasingly a bear market fund given H's performance on down-market days
Bank savings account, mostly a holding pen of sorts.
RiverPark Short Term High-Yield (RPHYX), a particularly low volatility fund which I'm test driving as a cash-management alternative
Moderately conservative (down about 3.5% YTD):
T. Rowe Price Spectrum Income (RPSIX), see above
Leuthold Global (GLBLX), marketed as "Leuthold Core goes global," this is a quant-driven, fairly pricey fund that can invest anywhere, in pretty much anything, long or short. Its been about the strongest of the Leuthold stable since launch.
Matthews Asian Growth & Income (MACSX), a singularly low-volatility way to invest in Asian markets, occasionally invests heavily in convertible securities
FPA Crescent (FPACX): another go-anywhere fund whose manager scours a corporation's finances to determine where (if at all) to invest, from their stocks and bonds to convertibles and loans.
Artisan International Value (ARTKX): solid, large-cap GARPy, from the folks who also manage Artisan Global Value
Artisan Small Cap Value (ARTVX), my oldest holding and one that has thrived in an array of markets.
RiverPark Short-Term High Yield (RPHYX), my newest and smallest holding, also above.
I've profiled about 120 funds for FundAlarm and/or the Observer. Of those, I have non-retirement investments in Leuthold Global, RiverPark Short-Term High Yield, Hussman Strategic Total Return, and Matthews Asian Growth & Income. I had a small investment in Utopia Core, which crashed and liquidated.
Getting into my portfolio is durned difficult, because I'm not interested in expanding the number of funds I own (dilutes performance, complicates record-keeping) so there needs to be an open spot. That results if (1) a current holding implodes (Utopia Core, sigh), (2) a new opportunity set emerges (the called HY bonds are an example, but master limited partnerships or e.m. local currency debt would also qualify), (3) a manager I own launches a new, more-interesting fund (I'm on the bubble about Artisan International Value versus Artisan Global Value) or (4) my needs - and hence my target asset allocation - change.

I always have a bottom line number and when it gets approached I have to bail even though I own mostly conservative, balanced and flexible portfolio funds. The day of the first 5% rebound following the first 5% drop I sold about 50% of my fund investments. I did not sell any shares of PRPFX, RNDLX, DBLTX, VWINX, GLRBX, WEFIX. Totally agree with Louise Yamada "would rather be out of the market wishing I was in that in the market wishing I was out" (thanks Catch).
Holding a lot of cash in Vanguard MM but have moved some into RPHYX which I'm watching carefully and increased positions in RNDLX, DBLTX and added HSTRX for now.

Thanks for the update on RPHYX. There's a lot of interest in it right here.
BTW, I am so glad you brought RNDLX to my attention, it's holding up better than any other fund I own.

David Sherman purchased [a huge number of] additional shares of RPHYX after Monday's rout. He seems in pretty good spirits and we're scheduled to talk Thursday morning about the market and his corner of it. (An earlier version of this note specified an amount and he seemed a bit embarrassed by the public disclosure so I've shifted to the demure but accurate 'huge number' construction.]
The fund's down a bit more than a half percent since making its monthly distribution (which accounts for most of its NAV changes). For those keeping score, since August 1, RPHYX is down 0.7%, Fidelity Floating Rate High Income (a floating-rate loan fund that some funds here guessed would parallel RiverPark) is down 3.7%, their new Global High-Income fund is down 5% and Fidelity High Income is down 6%.
Mr. Sherman's reflections of the fund's positioning appears in update 2. My original profile of the fund is http://www.mutualfundobserver.com/article.php?article=riverpark-short-term-high-yield-fund-rphyx-july-2011

Couldn't quite manage a "top ten" list but . . .
1. Birds of a feather fell together: A number of fund families clustered at the top (or bottom) of the one-day returns. The Fairholme's suffered across the board – Fairholme Allocation (FAAFX) and Fairholme Focused Income (FOCIX) were at the bottoms of their respective peer groups while Fairholme (FAIRX) was merely "well below average." Likewise with Templeton's global bond lineup (Global Bond, International Bond, Global Total Return) and the Driehaus income funds (Active Income and Select Credit) were uniformly trashed.
2. On the flip side, Hussman Strategic Total Return (HSTRX), Strategic Growth (HSGFX) and Strategic International (HSIEX) all topped their respective groups.
3. Mr. Gundlach & co. had a string of strong performances with DoubleLine Emerging Markets Fixed Income (DBLEX), RiverNorth Doubleline Strategic Income (RNSIX), and ASTON/DoubleLine Core Plus Fixed Income (ADLIX) all posting top 10 results. All of the DoubleLine funds (include Core Fixed Income, Total Return and Multi-Asset Growth) were in the black, with gains of 0.35 - 0.70%.
4. RiverPark Short Term High Yield (RPHYX) ignored the market again. NAV dropped a penny (0.1%), which is a fairly common fluctuation for the fund. It finished in the top 10 high yield funds.
5. Eric Cinnamond's Aston / River Road Independent Value (ARIVX) was one of the top five small-value funds, along with cash-heavy Pinnacle Value (PVFIX), Queens Road Small Cap Value (QRSVX) and his former fund, Intrepid Small Cap (ICMAX). The Observer has profiled all of them as solid, conservative choices.
6. Frontier markets paid less attention to the turmoil than did emerging markets. Of the 10 best-performing emerging markets funds, eight were explicitly "frontier" funds or e.m. small caps.
7. Matthews dominated Asia: almost all of the Matthews funds finished in the top ten. Those include Asia Dividend, Asia Growth, Asian Growth & Income, Asia Small Companies, India, Pacific Tiger and Japan. Of them all, Asia Dividend had the smallest loss, down 0.55% They also represent three of the 10 best international funds of any variety.
8. Fidelity Leveraged Company Stock (FLVCX) reminded me of why its investors rarely make money; the fund dropped over 4% for one of the day's worst showings.
9. I don't know what the First Trust Value Line Target 25 (no ticker) is supposed to do, but I'm betting that dropping 7% in a day – the worst performance of any unleveraged fund and the second worst among all funds – won't help it.

Thanks for update to RiverPark Short Term High Yield (RPHYX).
Took a position in this unusual fund after being introduced here,
NAV continues to be extremely stable while (theoretically) avoiding
most interest rate risk and credit risk. Practice may vary from theory,
see triple-A securitizations eventuating in half the global debt issuance
being riskless AAA followed by misplaced shirts. Global debt issuance is
again over half riskless triple-A, sovereign. To avoid misplacement a strait-jacket
that buckles in the back and keeps hands off keyboard is recommended.
http://seekingalpha.com/article/279674-the-horrifying-aaa-debt-issuance-chart
http://www.pimco.com/EN/Insights/Pages/Kings-of-the-Wild-Frontier.aspx
RiverNorth Doubleline Strategic Inc (RNSIX) continues to do well with both
yield and probably from the closed end fund sleeve, gains.

Hi, guys.
In pursuit of answers to your questions, I spoke again by the RiverPark folks. Morty Schaja, the president, made several worthwhile points which mostly accorded with my own understanding:
1. Cohanzick had no stand-alone accounts using this strategy in 2008
2. Cohanzick did use this strategy in 2008 as an element of other accounts and these bonds "performed exceedingly well."
3. Cohanzick does not resell the bonds it buys, it holds them until they're bought back. As a result, a "market freeze" as in 2008 is largely irrelevant to them since they have a guaranteed buyer.
4. A "market freeze" would, however, temporarily decrease the fund's NAV since pricing of the bonds would become difficult. For buyers who held their shares, though, the NAV would rebound quickly because of the exceedingly short time that the "impaired" bonds would remain in the portfolio.
5. If the fund saw net purchases in such a crisis, the fund could "realize unusually and unsustainable significantly higher returns" as it snapped up other mispriced bonds. David Sherman, the manager, reported during our interview that the fund generates $600,000/month in cash on its $20 million in holdings; he believes that cash flow alone would be enough to cover redemptions in most scenarios.
6. The fund's risk profile should be better than a floating-rate funds because the average duration is much shorter and the managers won't buy securities unless they believe the issuer will have the money - often 30 days hence - to complete repurchase.
By way of a side observation, RPHYX's NAV was unchanged after Monday's market panic, sparked by debt issues in Europe.
For what it's worth,
David

mobryon,
I have no doubt that RPHYX is different from all the other junk bond funds in buying only called bonds with an average of 30 days until the call date where there is cash on the corporate balance sheet to redeem. Before the OP randolf "parks" money in such a strategy, it might be helpful to ask, "what could possibly go wrong?" In a liquidity crunch when LIBOR spikes and lines of credit are being suddenly withdrawn, the cash on hand might not be sufficient for redemption, yet the bonds have been called. This would not be good.
You mention LCMAX, and KC Nelson is a very clever manager, however this fund has a bit of beta to the equity markets as he hedges out interest rate risk but not credit risk. My choices to "park" money that fared pretty well in 2008 would be SNGVX and, if available, DFIHX.

RPHYX is very interesting and appears to be fairly low-risk fund with steady returns. However, whenever there is a "free lunch" inherent in a strategy, a black swan lurks close by. This fund was started after the liquidity crunch of Q3 & 4 of 2008. Are there partnership returns for this strategy that would indicate how well it held up when everything else was crumbling?

Riverpark short term high yield fund (RPHYX) looks like a great place to park money.