I think bear funds can be used in conjunction with long only funds as a far cheaper synthetic substitute for long-short mutual funds. While I respect investors who object to any sort of shorting on principle, it seems hypocritical to me for any investor to embrace long short mutual funds and not consider the cheaper alternative of building their own. Not only are the fees far less for buying a low cost long-only fund like VASFX or DODGX and combining it with a short fund like GRZZX than the average l-s mutual, but there is also a far greater level of flexibility. You the investor control the amount of hedging you want to do. If you are also investing in a taxable account, you can harvest tax losses far more efficiently than a l-s fund. If the market is up and your bear fund is down, you can sell some of your shares to realize capital losses for a write off. If the market is down and you have losses on your long only fund, you can sell those shares for a tax loss instead. A l-s fund lacks that kind of flexibility and you are essentially paying 1.85% on average for a lightly hedged long portfolio.

Some years I do, others I don't. I look at AGI figures as well as how much tax I'm going to pay. There are reasons why one wants to control AGI (e.g. eligibility for Roth contributions, taxation of SS, etc.).
So my personal answer is: yes I sell losers to offset gains, but no, not necessarily for the purpose of reducing taxes.
Since I am focused on AGI, one of the cons of selling when one doesn't need the loss to reduce AGI below a threshold is that one does not have the loss available to use next year when one might need it.
Another con is that you cannot immediately repurchase the same, or substantially identical fund (e.g. swap one S&P 500 index fund for another, though there's never been a ruling on that). This is rarely a big deal as you can usually find a reasonable substitute. Still, if it's a unique fund you're selling ...
Wash sale rules apply to MFs, so you need to watch out for automatic reinvestments. I usually turn them off before I'm expecting to sell. Otherwise they can trigger wash sales. But if you're liquidating (permanently or at for least 30+ days), those reinvestments don't matter - you'll get the whole loss.
A pro of taking losses with MFs (as opposed to individual stock) is: if you sell before December distributions, you avoid getting taxable dividends. It comes out even (selling before or after distributions) if all the dividends are cap gains and qualified income. But if any of the divs are nonqualified income, you're better avoiding them by selling before the distribution.
With stocks, the dividends are generally qualified, so you can't reduce your tax liability the same way with this maneuver.
Another pro of doing loss harvesting with MFs as opposed to stocks: with MFs, you have a choice of average cost or actual cost. If you're selling in a down market, using average cost will reduce the cost of your short term shares (increasing your short term losses) and increase the cost of your long term shares (decreasing your long term losses). That's a good thing, since short term losses can be more valuable than long term losses.

A few days left to take care of your portfolio gains and loses and minimize taxes.
Does anybody sell losers from MF portfolio by year end to offset gains and reduce taxes? What pros and cons of doing that with MF? Does wash sale rule apply to MF?

Those top ten lists (I didn't look that closely) are really interesting. From the brief descriptions, I had assumed that the only difference between the indexes would be the cutoff in the number of stocks selected - a fixed top 100 for the new, and more or fewer for the old (depending on how many stocks were ranked A- or better). Also that the relative weights would be the same (just scaled differently because there would be different numbers of stocks in the two lists).
I was wrong on both counts. The reordering of top ten (e.g. J&J moved from 4th to 1st) shows the weighting algorithm is different. The presence of Apple in the new but not the old index shows that the candidate stocks are different as well - either that or Apple got a really low weighting in the old index, which seems unlikely (even with a different weighting algorithm).
All of this raises the question - what are you looking for in a substitute? Same stocks (as implied by your suggested alternative)? Similar sector weightings? Same style box (cap size/style)? Same geography (US, or is foreign okay)? Yield? Concentration?
The M* basic (free) ETF screener can do a pretty good job, if you know what you're looking for. If you just use a single criterion: ETFs with at least 20% in industrials, you've already eliminated 93% of the ETFs in the database. (Note, I'm using the GIC Industrials classification, not M*' Industrials category, since the classifications posted above are GICs).
If we ignore sector ETFs and foreign ones, we're down to just 8 large cap blends (including SPHQ), 3 midcaps, and 8 small caps.
If we look for funds with at least 10% consumer staples (including companies like Hormel), we've eliminated 99% of ETFs. All of those remaining have a fair amount of consumer discretionary. Focusing on the diversified US ETFs, we have just six large cap blends (including SPHQ), and one mid cap.
Eyeballing these, the closes appears to be First Trust Capital Strength (FTCS). Closest in industrials (25.95% vs. 26.85%), it is also fairly close in the consumer categories: staples (20.23% vs. 17.60%) and discretionary (16.12% vs. 19.19%). Trailing twelve month yield is also very similar, at 1.94% vs. 1.81%.
The portfolio is more concentrated, with 50 stocks vs. 132 for SPHQ. But NOBL also has just 50 stocks, so that doesn't seem to be a concern for you.
The overlap of FTCS with SPHQ seems about the same as that of NOBL.
- FTCS doesn't have #1 Hormel, but it does hold #2 Raytheon while NOBL doesn't.
- Neither NOBL nor FTCS hold #3 Ross, #6 Yum, #7 Nike, or #10 Disney.
- All of them have a healthy slug of #4 J&J.
- Only FTCS shares #5 Omnicom and #9 Lockheed; only NOBL shares #8 McCormick.
Overlap using M*'s stock intersection (premium) tool.
Here's a tool for looking at ETF correlation, unfortunately FTCS isn't in its database.
http://www.etfreplay.com/correlation.aspx
But that's just one way of looking for similar ETFs. What you consider similar depends on what you consider important. Me, I'd just get VIG (or more likely, VDADX) and call it a day. It's among the six large cap blend finalists, cheaper, also focused on high quality stocks, from a great fund sponsor, much higher volume and AUM (for ETF pricing purposes).
Or if you're open to actively managed funds, VDIGX. Here's a M* column comparing the two Vanguard funds: http://news.morningstar.com/articlenet/article.aspx?id=666314

@little5bee - if you're looking for a 'safe' dividend you're best shot at that is with both EPD and MMP. They have the coverage in spades via cash flow from operations with no need to access the market for additional capital. They both have also been so beaten down along with the rest of the sector that the potential for capitals gains are there as well and as the best of the breed I would expect them to have the most support.
AMJ and AMPL by design or necessity are exposed to the risks of dividend reductions and realignment if energy continues to get hammered and more MLP's become "Kinderized", go belly up or just eliminate their current divy's in an attempt to stay afloat. I've considered AMLP but I am content to wait for MR. Price to show the way forward. See here for one persons slant on AMLP's er:
http://investwithanedge.com/alerian-mlp-etf-amlp-finally-admits-its-8-expense-ratio
Fair disclosure - I own EPD and MMP and have for quite some time. I'm green on both but I was much greener earlier in the year. I'm underwater on KMI and working toward selling out without giving it away. Since it's in a Roth there are no tax advantages to be had but I don't expect the company to go bankrupt.

Bought bunch of oil bonds since last yr and you do see a declines in prices.

Is there such a thing as oil preferred shares? A stock beat up by the market that still has the ability to "weather the storm" and continues to pay a dividend (has low debt/ relatively high revenue) might even be better than a preferred share.
I second @little5bee recent quote:

"CVX is yielding 4.5% and XOM is yielding almost 4%. I won't get rich, but I think these two companies have the financial resources to protect those dividends. If they keep sliding, I'm planning to buy more. No, they are not the most exciting positions from a risk/reward standpoint, but I'd rather have a "safe" dividend than roll the dice on a capital gain."

@Old_Joe CVX is yielding 4.5% and XOM is yielding almost 4%. I won't get rich, but I think these two companies have the financial resources to protect those dividends. If they keep sliding, I'm planning to buy more. No, they are not the most exciting positions from a risk/reward standpoint, but I'd rather have a "safe" dividend than roll the dice on a capital gain.
Which MLPs are best positioned to weather this downturn and protect their dividends? Any recommendations? I'd like to start buying those, as well, but since some of the stalwarts...like Kinder Morgan...have been decimated, I don't know where to start.

Hi @Dex,
Thank you for your questions.
I am retired. Catching pension income, social security income and drawing on investment income when needed. In addition, being a former corporate credit manager, I do some consulting work form time-to-time.
To run my portfolio form a win, place, show perspective requires at least three funds per sleeve. And no, I have not given much thought to reducing the number of funds held for many reasons one being having to pay large capital gains if I sold off some of these funds, to reduce their number, with one being held since to my teenage years (FKINX).
And, so it goes ...

Qualified dividends are taxed at 0%, 15% and 20%, the latter if you are in a 39.6% tax bracket.

From @heezsafe 's link:
"[Q]ualified dividends ... are taxable federally at the capital gains rate, which depends on the investor’s modified adjusted gross income (AGI) and taxable income (the current rates are 0%, 15%, 18.8%, and 23.8%.)."
This is due to the Medicare surtax of 3.8% which kicks in once your AGI (not taxable income) exceeds a certain level.
From http://truepointwealth.com/recent-tax-changes-and-how-they-affect-you/
"Note, the 20% bracket doesn’t truly 'exist.' By the time income reaches the top marginal tax bracket of 39.6%, one is already subject to the additional surtax."
In addition to the description of qualified divs in the Fidelity link, there's another gotcha for mutual fund owners. Even if your 1099 says that dividends are qualified (box 1b), they are not unless you hold those shares for at least 61 days around the ex-div date.
This is the same rule as stated in the Fidelity page, but that page wasn't too clear about pass through entities like mutual funds. That is, the fund itself must hold underlying stock for 61+ days for it to pass through the div as a qualified div, but in addition you must hold the mutual fund shares 61+ days around the fund's ex-div date.
Here's another Fidelity page that goes into this gory detail:
https://www.fidelity.com/taxes/tax-topics/qualified-dividends

@Mona, over the years I had enough of paying IRS on distribution even in down markets. Since vast majority of active managed funds failed to out-perform their respective indexes, getting the boring index level return is good enough for us. So on taxable accounts, we use exclusively index funds and ETFs to minimize the tax consequences. Granted that dividends will be tax according to our tax bracket, but at least I can minimize short term and long term capital gains. </blockquote
Sven,
If you are invested in Vanguard Index 500, 100% of the dividends were qualified. In Vanguard Total Stock Market Index, 95% were qualified. And for another example, if you are invested in Vanguard Mid-Cap Index, 86% were qualified.
https://personal.vanguard.com/us/insights/article/estimated-yearend-distributions-122015
Qualified dividends are taxed at 0%, 15% and 20%, the latter if you are in a 39.6% tax bracket. So unless you are making a lot of money putting you in 39.6% tax bracket, you are paying no higher tax rate on your qualified dividends than you would would pay on Long-term Capital Gains.
Mona

For the past 4 years or so I was in ARTLX, it seemed each year at distribution time that the IRS was the big winner.

@Mona, over the years I had enough of paying IRS on distribution even in down markets. Since vast majority of active managed funds failed to out-perform their respective indexes, getting the boring index level return is good enough for us. So on taxable accounts, we use exclusively index funds and ETFs to minimize the tax consequences. Granted that dividends will be tax according to our tax bracket, but at least I can minimize short term and long term capital gains.
The other thing to watch for in international funds when currency hedging is used. All the contracts will pay out as short term capital gains.

@Ted It's not volatility that is my concern with concentrated funds, but individual business risk, i.e., the risk of the permanent impairment of capital with a position in Sequoia's case that grew to 29% of the fund. That's not about volatility. The risk of some form of bankruptcy or permanent loss of any individual position is far greater with a concentrated fund. But my story also addresses the other risk--of being over-diversified. The question then becomes is it possible to find a low-risk concentrated fund investing in high quality companies with less individual business risk because they have things like low debt, strong franchises, economic moats, diversified business lines, etc.? That is the basis for this story.

Fiduciary Management, Inc. » FMI Mutual Funds » FMI Large Cap Fund (FMIHX) » FMIHX Distribution Summary
FMIHX Distribution Summary
Ex-Dividend Date
Reinvestment Price
Income
Short-Term Capital Gain
Long-Term Capital Gain
12/18/15 18.23 0.20835660 0.16523 1.67694

Will Goldman Be Right After All?
Oil Price
FREE
WEEKLY REPORT
18/12/2015
Some corners of the energy world dismissed Goldman Sachs’ prediction earlier this year that crude oil prices might fall below $30 per barrel. But no longer. The investment bank reiterated http://www.houstonchronicle.com/business/article/Goldman-says-only-20-oil-can-guarantee-market-6706218.php?t=90ec76519e438d9cbb&cmpid=twitter-premiumits belief that oil prices may need to fall to $20 per barrel in order to force a significant volume of supply off the market, and such a scenario is no longer seen as a remote possibility. U.S. oil production has only declined moderately thus far, down about 300,000-500,000 barrels per day since peaking at 9.6 million barrels per day (mb/d) in April 2015. But with so many drillers barely hanging on, everyone is still pumping as much oil as possible in order to keep the lights on, delaying the inevitable adjustment in supply. “This rebalancing is far from achieved,” Goldman concluded this week.
For now, the world is still producing somewhere around 1.5 mb/d more than it needs. Capital markets have shunned some of the most indebted drillers, but access to finance remains open for investment-grade oil drillers. In this context, unless oil prices drop another $10 to $15 per barrel, Goldman says, the necessary contraction may not take place quick enough.
http://oilprice.com/newsletters/free/opintel18122015
KENNYPOLCARI
8:21 AM 12/18/15
And the Headlines Say it All!
“Europe continues to struggle, China is slowing, Hi Yield is imploding, Oil is crashing, earnings are being cut, housing is still under pressure, job growth is suspect, manufacturing suggests that we are (already) in a recession, and this bull mkt is long in the tooth…… ”
The fear now is that IF oil does NOT hold at the 2008 lows of $32.40, then you should move away from the fan….because when it hits it won’t be pretty and the start of 2016 will be one for the record books……maybe our friends at GS are right……Could we really see oil at $20/barrel?…….. I mean look - all of the major oil producers (think Saudi’s and the OPEC nations) continue to produce like there is no tomorrow - refusing to 'give in’……..as they try and slaughter the competition (think Russia, US and Non OPEC producers) …..If that is the case then we could all be in for some very rough time in the first half of 2016.
How about that JUNK?
Since 2007, the percentage of corporate bonds that Standard and Poors has rated 'junk’ (or more politically correct - Hi-Yield/Speculative) , has climbed from 40% to 50%. We can thank the FED for this - mostly because they encouraged companies to borrow massive amounts of money at near zero rates to 'kick start’ the economy….. and naturally, much of this borrowing came from the energy, metals and mining sectors - which are now in distress. (Fun Fact: The country is now looking at about $180 billion of total 'distressed debt’* - the highest level since the end of the Great Recession).
[*Distressed debt is the debt of companies that have filed for bankruptcy or have a significant chance of filing for bankruptcy in the very near future.]
And so - sports fans……that IS a problem - because Standard and Poors says that:
“a whopping 72% of the bonds in the metals; mining and steel industry is now distressed. That makes sense given the fact that prices for raw materials like copper, iron ore, aluminum and platinum have recently plummeted to crisis levels. It’s so bad that a key Bloomberg index of commodity prices is now sitting at its lowest level since 1999.”
Notice that they did not estimate what percentage of distressed debt is in the energy space….. and if oil prices stay depressed for much longer, more energy companies could default which will cause those mkts to 'sieze up’ - forcing asset managers to sell what they can…..(and here is where you have to think stocks…..because why? Because stocks are the most liquid, easily saleable, transparent asset class there is….Need to raise money - hit the sell button and BOOM - you are done) .
http://kennypolcari.tumblr.com/post/135441517380/and-the-headlines-say-it-all-try-the-simple

http://www.sec.gov/Archives/edgar/data/1523624/000114420415071495/v426142_497.htm
497 1 v426142_497.htm 497
Filed Pursuant to Rule 497(e)
1933 Act Registration No. 333-175116
1940 Act Registration No. 811-22574
WHITEBOX TACTICAL OPPORTUNITIES FUND
WHITEBOX MARKET NEUTRAL EQUITY FUND
WHITEBOX TACTICAL ADVANTAGE FUND
Supplement dated December 17, 2015, to the Prospectuses dated January 16, 2015 (as supplemented March 5, 2015, September 1, 2015 and November 16, 2015)
The Board of Trustees (the “Trustees”) of Whitebox Mutual Funds (the “Trust”) has determined that it is in the best interests of the shareholders of the Whitebox Tactical Opportunities Fund, the Whitebox Market Neutral Equity Fund and the Whitebox Tactical Advantage Fund (collectively, the “Funds”) to liquidate and terminate the Funds.
The liquidation of the Funds is expected to be effective on or about January 19, 2016 or at such other time as may be authorized by the Trustees (the “Liquidation Date”). Termination of the Funds is expected to occur as soon as practicable following liquidation.
Effective at market close on December 17, 2015, the Funds will cease accepting purchase orders from new or existing investors. The Funds anticipate making a distribution of any income and/or capital gains of the Funds in connection with its liquidation. This distribution may be taxable. The tax year for the Fund will end on the Liquidation Date.
Shareholders of the Funds may redeem their shares at any time prior to the Liquidation Date.
If a shareholder has not redeemed his or her shares as of the Liquidation Date, the shareholder’s account will be automatically redeemed and proceeds will be sent to the shareholder at his or her address of record. Liquidation proceeds will be paid in cash for the redeemed shares at their net asset value.
To prepare for the closing and liquidation of the Funds, the Funds’ portfolio managers will likely increase the Funds’ assets held in cash and similar instruments in order to pay for Fund expenses and meet redemption requests. As a result, the Funds are expected to deviate from their stated investment strategies and policies and will no longer be managed to meet their investment objectives.
Redemptions of shares (including liquidating redemptions) are generally taxable. Shareholders should consult their personal tax adviser concerning their particular tax situations.
All expenses of the liquidation of the Funds will be borne by Whitebox Advisors LLC.
A shareholder may obtain additional information by contacting Investor Services at (855) 296-2866 Monday through Friday 9:00am to 8:00pm EST or by contacting his or her plan sponsor, broker-dealer, or financial institution.
* * *
Prospectus Supplement Dated December 17, 2015
Please Read Carefully and Keep for Future Reference

FYI:
Regards,
Ted
WSJ Slant:
http://www.wsj.com/articles/stocks-tread-water-ahead-of-fed-rate-decision-1450257431
Bloomberg Slant:
http://www.bloomberg.com/news/articles/2015-12-15/asian-stocks-set-for-rebound-on-fed-day-as-dollar-holds-advance
Reuters Slant:
http://www.reuters.com/article/us-global-markets-idUSKBN0TZ01L20151216
MarketWatch Slant:
http://www.marketwatch.com/story/us-stocks-eye-gains-as-interest-rate-hike-looms-2015-12-16/print
WSJ Markets At A Glance:
http://markets.wsj.com/us
Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
Current Futures: Very Positive
http://finviz.com/futures.ashx

Thanks for the positive comments on the (now) Baird team.
Hardly a performance chaser. Just playing year end tax games and have cash on hand.
This is one of those unusual (but not extremely rare) years where a good year is being followed by a flat year. Pent up cap gains in funds are being realized, resulting in distributions sometimes exceeding share appreciation (virtually zero for the year). In those cases, it's better selling before dividends are distributed.
For other tax reasons (and also that I expect more stability in shorter munis than shorter taxable funds), I'm looking more at short/intermediate muni funds than taxable funds. Seems a good idea to diversify in the space (literally avoiding putting all of my "eggs" in a single basket, i.e. fund), so I'm poking around.
Regarding PRFSX - as you wrote, it seems a conservative, solid fund. M* likes it (gold rated), which could be a negative mark for some here :-). Though with an SEC yield of 0.62%, I think bank accounts (1% taxable) are better for now - guaranteed principal, and may even pay more if/when inflation (or Ms. Yellen) makes a showing. Savings accounts may be interesting to watch over the remainder of the year.

I always assume that the final distributions will be higher than the estimates. The management firm usually don't know the fund's earnings for the entire fiscal year when it makes the estimates, and it don't know until the record date how many shares those earnings are divided among.
For capital gains, mutual funds are required to use a fiscal year ending Oct 31st, so I wish fund companies would issue estimates in mid-to-late November. That way, they wouldn't be guessing on the total cap gains to distribute (they'd just be guessing on the number of shares). Still the exact amount of dividend income isn't known until the fund's "real" fiscal year ends.

FYI: Third Avenue attracted considerable attention last week with the announcement that it would restrict withdrawals from its high-yield Focused Credit Fund. And rightly so: Any investment management company that limits investors’ access to their capital is taking a major decision with consequential implications not just for its clients, but also for its own future. The move raises questions about the fund's investment strategy as well as market liquidity more generally, especially during periods of uncertainty and increasing market dislocations.
Regards,
Ted
http://www.thinkadvisor.com/2015/12/14/9-lessons-from-third-avenue-freeze?t=mutual-funds

http://www.sec.gov/Archives/edgar/data/315774/000143510915001154/golden497e.htm
497 1 golden497e.htm
FORUM FUNDS
GOLDEN LARGE CAP CORE FUND
GOLDEN SMALL CAP CORE FUND
Supplement dated December 14, 2015 to the Prospectus and Statement of Additional Information dated November 1, 2015
IMPORTANT NOTICE REGARDING FUND REORGANIZATION
At a meeting held on December 11, 2015, the Board of Trustees of Forum Funds (“Board”) approved, subject to shareholder approval, a proposal to reorganize the Golden Large Cap Core Fund and Golden Small Cap Core Fund (together, the “Acquired Portfolios”), each a series of Forum Funds, into the Wells Fargo Large Cap Core Fund and the Wells Fargo Small Cap Core Fund (together, the “Acquiring Portfolios”), respectively, each a series of the Wells Fargo Advantage Funds. Golden Capital Management, LLC (“Golden”), the investment adviser to the Acquired Portfolios, recommended the reorganization to the Board.
In order to accomplish the reorganizations, the Board voted to submit an agreement and plan of reorganization to shareholders of each Acquired Portfolio’s shareholders for their approval. If the shareholders of an Acquired Portfolio approve the reorganization proposal, then the Acquired Portfolio will transfer all of its assets and liabilities to the respective Acquiring Portfolio in exchange for shares of the Acquiring Portfolio and the Acquired Portfolio’s shareholders will receive shares of the Acquiring Portfolio in exchange for their Acquired Portfolio shares. The reorganizations are intended to qualify as tax-free transactions for federal income tax purposes.
The Board has called a shareholder meeting to take place in March 2016 where the shareholders will consider and vote on the agreement and plan of reorganization. This meeting will occur at the offices of Forum Funds, Three Canal Plaza, Suite 600, Portland, Maine 04101. If approved by shareholders, the reorganizations are expected to occur in May 2016.
* * *
For more information, please contact a Fund customer service representative toll free at (800) 206-8610.
PLEASE RETAIN FOR FUTURE REFERENCE.