I have a large position in this fund in a taxable account. It has performed brilliantly for years. The last few years not so much. It is hard for me to unload it because of tax implications. Recently I started having dividends and capital gains sent to me and I have been investing the distributions in my Roth IRA . I am putting those proceeds in Vanguard's Mid Cap index which seems to have outperformed The Acorn Z fund.
Question Should I pull the plug on this fund and bite the tax bullet? Or with new managers on board would it make sense to keep it. Even in bad years its done well enough but it seems to have bloated into an index fund like instrument so why pay the higher fees? What say you?

FYI: Copy & Paste 6/13/14: Zachary Karabell: Barron's
Regards,
Ted
Editor's Note: Karabell is head of global strategy at Envestnet, a leading provider of wealth management technology and services to investment advisors.
We live in a world that emphasizes risk. That is true in general, but is especially so in the financial world. Since the financial crisis of 2008–2009, financial professionals have been acutely attuned to risk—and for good reason. Too many felt they were caught off-guard and unprepared by the near-implosion of five years ago. That in turn followed volatile periods from the Internet bubble of 1999 into early 2000, through the events of 9/11, and then a sharp market contraction until October 2002. After nearly 15 years of drama, it is hardly surprising that the financial world is primed for risk.
Hardly surprising, but a problem nonetheless. The heightened sensitivity to hidden risk muddies analysis, and can potentially lead to mispricing of assets and hence, less-than-optimal investment decisions.
The current yields and attitudes towards both high-yield ("junk") bonds and emerging-market debt are prime examples. Both are seen as risky assets with both known and unknown pitfalls. The International Monetary Fund (IMF) in April warned that many investors in emerging-markets bonds may be unaware and unprepared for a combination of slowing growth and rising rates that could impact many portfolios negatively, especially given the surge of money into emerging-markets bonds since 2008. There is now $76 billion in retail mutual funds focused on the space, up from $12 billion before 2008. The IMF also emphasized the increase in issuance, with $300 billion in emerging-market corporate bonds coming to market last year alone. That is frequently interpreted as a sign that the market is—to use a common cliché—"getting frothy."
But is it? It is too easy these days to make the argument for bubbles, bubbles everywhere, and for overpriced assets at every turn. In light of a volatile 15 years, where the downs have felt more severe than the ups, such arguments are intuitive and have emotional resonance. That does not, however, make them correct.
A Matter of Perceptions
Both high-yield ("junk") bonds and emerging-market debt are perceived as inherently more risky than many more vanilla investment options. There are at least two types of risk: greater chance of loss (more downside) and greater volatility. Compared with, say, blue-chip large cap companies such as IBM (IBM) or Walmart (WMT), or with investment-grade bond portfolios, or with U.S. Treasuries, junk and emerging-market debt are understood as riskier and hence provide higher returns to lenders in the form of higher-interest rates. They are also susceptible to price swings that can be intense.
Last June of 2013, when then chairman of the Federal Reserve (Fed) Ben Bernanke hinted that the Fed would begin to pare its bond-buying program, emerging-market debt sold off very hard, with prices dropping in many instances by more than 10% in the space of weeks. The reason was not a sudden change in the fundamentals of Turkish or Brazilian bonds, but rather the market perception that those bonds had seen strong inflows based largely on the presence of so much money in the global system as a result of Fed policies. The concern was that when the Fed began to trim the easy, easy money, those bonds would see both outflows and a drop in demand.
And yet, a year later, the Fed is aggressively trimming its bond-buying program, having reduced its monthly purchases almost in half and on a glide path to reducing them entirely by year-end. Emerging market bonds, meanwhile, have recovered all of what they lost in June 2013 and yields are actually lower after the recent run since May. The market interpretation that these assets were simply a derivative of a Fed bubble was wrong.
Of course, it may only be temporarily wrong. Another shock to the global system could well prove the risk interpretation correct. The ever-present concern that all financial assets are still being artificially boosted by central bank liquidity won't fully dissipate until central banks tighten globally. With the actions by the European Central Bank (ECB) announced on June 5, however, we are nowhere near an end to these policies. In fact, the ECB, led by its president Mario Draghi, is now embarking on its own policies of quantitative easing just as the U.S. Fed is pulling back.
Combined with the easy money policies of Shinzo Abe in Japan, we are in for a considerable period of significant liquidity. And then there is the surfeit of liquidity in sovereign wealth funds—well in excess of $5 trillion—and in corporate balance sheets which add trillions more. If you are waiting for a liquidity squeeze, you might be waiting for a long, long time.
The market price for high-yield and emerging-market debt suggests that the prices being paid and the rates being offered for these instruments are not pricing in much risk. Low-rated bonds still bear the moniker "junk" from a time in the 1970s and 1980s when low-rated or questionable businesses simply could not get financing from banks at any price and had to pay much more generously to investors to compensate them for the risk.
Today, however, many, many low-rated bonds have only a slightly higher level of actual risk—as defined by default risk—than bonds considered "safe." Over the past three years, the default rate for bonds rated "junk" (i.e. those rated 'BB' or lower by Standard & Poor's, or 'Ba' or lower by Moody's) has been only a few percentage points worse than those rated investment-grade. Except for a spike in 2009, in fact, when low-rated bonds had a default rate of more than 8%, so-called "junk" bonds have had a default rate of less than 5%, and in the past few years less than 2.5%. The very lowest ratings, C and less, have had higher default rates, as to be expected. But bonds with a B rating have had default rates of less than 1.5% since 2003.
The picture is similar with emerging-market bonds. Yet both emerging market and high-yield still trade at a significant premium to treasuries and investment-grade corporate bonds. Yes, those spreads have been compressing, and as more money has poured into these bonds in the past few years, they have compressed further.
The modest spread between high-grade bonds on the one hand and emerging markets and high-yield on the other is itself taken as an indication that investors may be investing too much in higher-risk assets. As more money has poured into funds that invest in those assets, prices have risen and yields have therefore dropped. The question for many now is whether those yields are appropriate given the nature of the risk.
Staking the Middle Ground Between Risk and Return
There is, of course, no easy answer here. There is the very low default rate, save for the worst credit quality. There is the reality that many emerging-market bonds, whether corporate or sovereign, are issued by countries and companies that are risky only because countries such as Mexico, Turkey, and South Korea were once considered riskier. And there is the fact that we live in a world suffused with capital with low inflation, which means that legitimate entities do not need to pay exorbitant rates.
If you believe that we remain in an artificial lull of easy money provided by central banks, that rates will rise sharply soon enough, that markets will roil, and that there is some new crises just beyond the advent horizon, then yes, emerging market and high-yield debt will suffer disproportionately.
If not, however, these assets may not have significantly greater downside than U.S. Treasuries and investment-grade corporate debt even as they carry a risk premium that assumes they are. Until the investing world stops fixating on risk and focuses more prominently on return, that will remain the case.

This AM 6/12
The big action is in oil amid terror troubles in Iraq, with WTI crude up 1.5% to $105.99 per barrel. Gold, however, sees little bounce, up $3 per ounce to $1,264.
Micron Technology, Inc up near 5% yesterday lifted PVSAX and PYSAX to gains.Many Ivy funds also hold Micron.Like Scott, dividend closed end funds FAM and PGZ saw gains along with precious metals.

@prinx Either you do not understand leverage, or you have misunderstood this fund's prospectus. Albeit, this fund does have a high beta, but it is not leveraged.
Now that this fund has a history, and we have a better idea how it will perform under various market conditions, I think it would be an excellent source of dvd income if you can catch it at the right price; then, as for capital appreciation over time, well, you'll get the market gives ya--- and that might be a very good thing!

Dearth of deals leads Oaktree to cut fund size: Seeking Alpha
Jun 11 2014, 15:52 ET | About: Oaktree Capital Group (OAK)
Struggling to find deals for its latest distressed-debt investment fund, Oaktree Capital (OAK -1.3%) has cut its $3B asset-raising target all the way to about $1.8B, reports Bloomberg. The firm also plans to shorten the investment period to 3 years from 5.
Given the lack of traditional distressed opportunities, Oaktree is spending more time on European nonperforming loans, shipping, commercial real estate, and energy, says Ronald Beck, a managing director at the firm. "You have to be very sector specific."
"Financing is readily available and there's little corporate distress," lamented the firm's John Frank a few months back, adding Oaktree is more likely a seller than buyer in the current environment.
Oaktree Capital Group LLC (OAK), the world’s biggest distressed-debt investor, cut the $3 billion goal on its next control investing fund by about 40 percent as it struggles to find deals amid an economic recovery, according to three people with knowledge of the matter.
Given the lack of traditional distressed opportunities, Oaktree is spending more time on European nonperforming loans, shipping, commercial real estate and energy, said Ronald Beck, a managing director at the firm, on a panel at the SuperReturn U.S. conference in Boston this week. He pointed to anemic default rates and high-yield bonds trading above par.
http://mobile.bloomberg.com/news/2014-06-11/oaktree-said-to-cut-fund-as-distressed-deals-diminish.html

More From Guggenheim
Capital flows have come as a result of low yields in Europe, Japan and elsewhere.
In Europe, the risk is that the euro will depreciate. That makes buying U.S. Treasury bonds and other U.S. assets attractive because the local currency could depreciate and interest rates are so significantly higher in the United States than in Europe. On June 6 in Germany, 10-year government bunds traded at 1.35 percent, compared with 10-year U.S. Treasuries at 2.58 percent, so, German investors seeking yield certainly want to look at the United States.
For Japanese investors it is a similar picture — U.S. Treasuries at 2.58 percent look cheap compared with 10-year Japanese government bonds yielding 60 basis points. And legislation in Japan now allows larger allocations overseas by pension funds.
Investment Implications
With no pending crisis expected thanks to central bank liquidity and a bias among Fed policymakers to keep interest rates low, the recent bull market for credit spreads is alive and well, supported by surging capital inflows, which have also helped U.S. stocks hit fresh highs.
http://guggenheimpartners.com/perspectives/media/central-banks-chart-a-course-for-overheating?utm_source=SilverpopMailing&utm_medium=email&utm_campaign=Market Perspectives - June 20

Mind you, this is a place with a culinary culture that includes BUTTER flavored ice cream served in a hamburger bun. Manila street food. I dunno if you can find it beyond the capital, though. OK, enough about terrible pizza.

@jerry: Rob Arnott of Research Associates [Research Associates was referenced in the linked article] supports what you are saying to some extent. He has done a lot of research in this area, and he concludes that almost any way to construct an index has outperformed a capitalization weighted index. Part of it is what you said, the fact that you get an average lower cap of the stocks. Rob Arnott says that a big part of it is that a cap weighting overweights the most expensive stocks, the most overvalued ones [cap weighting=price X shares outstanding]. He also says that market cap weighting does not capture the economic footprint of a company. For example, although Apple is weighted the most heavily in a cap weighted index, iirc, Walmart has the most sales of any company in the U.S., which relates more to economic footprint. So he believes in weighting on more fundamental factors, such as [again, iirc] cash flow, dividends, etc, to weight by economic footprint rather than by market cap.
For Rob Arnott, the key thing is to NOT weight the portfolio by price, which is essentially what a market cap weighting is doing, as price x #shares. He says that by market weighting, you are pushing away value, and loading up on growth......favoring stocks that have higher valuations.
Here's an interview [with transcript if you prefer that] that adds to the discussion above:
http://www.morningstar.com/cover/videocenter.aspx?id=613699
By the way, I don't own any of the fundamental index funds. My index funds are the standard ones, which are cap weighted, mostly Vanguard. I haven't made up my mind wrt the best indexes to invest in, e.g., fundamental index methodology, different forms of factor weighting/"smart beta", etc. A while back I took a look at the performance of the Schwab Fundamental Weighted indexes, and I was not overwhelmed.....certainly not enough to want to sell my traditional index funds, pay the capital gains taxes, and purchase other index funds with a different weighting methodology.
What is being talked about a lot these days is weighting an index by size (smaller), value, profitability, and more recently, momentum. The DFA 'index' funds are now factoring these into their weighting methodology.
@mjg: from the trivia department......correct me if I am wrong, but the S&P 500 Index currently has 501 stocks.
It's the Vanguard S&P 500 Index Fund that has 504 stocks, but that is different than the Standard & Poor's 500 Index. Note that the Schwab and Fidelity index fund versions also contain 501 stocks.
Standard & Poor's has a nice fact sheet on their index:
http://us.spindices.com/indices/equity/sp-500
Finally, in the article which is the topic of this discussion, the author states that he is using a universe of the top 3000 stocks in the world, based on market value. So not the S&P 500.

Scott, you nailed it. Kiplinger's, 2008:
"But Nygren's largest blunder by far was his heavy investment in Washington Mutual (WM), the country's largest thrift. At one point, WaMu represented a towering 15% position in Select's portfolio. The Seattle-based bank has written off $20 billion of losses on home mortgages and dramatically diluted shareholder value by raising new capital. The stock price has plunged nearly 90% in a year."
In 2007 the average person on the street in Seattle knew more about WaMu's house of cards than Nygren did.

Thanks.
Great managers make sizable mistakes at times. That's fine. I would actually respect a manager more if they admitted it, told me what they learned from it and how it may change the way they approach an investment going forward. It kind of reminds me of the whole story of Bill Miller giving a speech promoting Bear Stearns in the midst of its falling apart:
"In The Big Short, author Michael Lewis recounts a similar episode. On a Friday morning in March 2008, Miller was invited to present the bullish case for investment bank Bear Stearns, which had traded at $53 the previous day. During a Q&A session after his presentation, an audience member asked Miller a question: "Mr. Miller, from the time you started talking, Bear Stearns stock has fallen more than 20 points. Would you buy more now?" Miller's answer: "Yeah, sure, I'd buy more."
By the following Monday, Bear Stearns had been sold to J.P. Morgan for $2 a share."
http://www.cbsnews.com/news/bill-miller-large-cap-stocks-represent-a-once-in-a-lifetime-opportunity/
You have a manger who manages well over $10B in AUM and when asked about your biggest investing mistake you're going to give some story about some silver coins when you were in college? Additionally, in terms of Nygren, the Wamu incident is what comes to mind - when I saw the title of the thread, that's the only thing I thought it could be.
I've said this before about people like Gartman, whose issues (like the lousy performance of his etf) has never been questioned.
Meh.

Quoting: "Isn't Ukraine a risky bet, even for you?
This isn't much different than others. During the financial crisis, Lithuania ran into short-term solvency challenges because it couldn't access capital markets. We were the largest investors providing them short-term liquidity. Now, Lithuania is issuing debt with very low yields, and no one even talks about it. That took about four years. Hungary also took about two to three years to pay off. We may need to be patient. It may be three years before some of these factors can move in a positive direction in Ukraine."
.....I note that my PREMX still holds debt from The Ukraine among its top 5 positions--- but just 1.51% of total AUM. (Fund Manager is Michael Cornelius.) And the last time there was a change to the portfolio reported, PREMX had reduced its Ukrainian position.
http://portfolios.morningstar.com/fund/holdings?t=PREMX&region=usa&culture=en-US
(More from the Hassenstab thing:) "Everyone is focused on the shortage of capital globally as the Fed tapers. But they are ignoring what the BOJ is doing, which will more than offset that. They're getting the call wrong by being bearish on all emerging markets.
What does that extra money mean for emerging markets?
In 2013, the divergence in performance between the best and worst emerging market was more than 40 percentage points. We have always carefully picked countries with strong fundamentals and where we felt appropriate policy decisions were being made. Even though everyone has turned bullish recently, we would be cautious on more vulnerable places like Turkey."

Scott, you nailed it. Kiplinger's, 2008:
"But Nygren's largest blunder by far was his heavy investment in Washington Mutual (WM), the country's largest thrift. At one point, WaMu represented a towering 15% position in Select's portfolio. The Seattle-based bank has written off $20 billion of losses on home mortgages and dramatically diluted shareholder value by raising new capital. The stock price has plunged nearly 90% in a year."
In 2007 the average person on the street in Seattle knew more about WaMu's house of cards than Nygren did.

What does this mean for bond investors?
It changes the countries and sectors that benefit from China's growth. In the past, countries like Australia benefitted from selling iron ore and coal to China. Increasingly, countries like Korea, selling cars and cellphones, or Malaysia, selling palm oil for food products, will benefit. That's good news for these countries' economies. Korea is our second-biggest country allocation in the global bond fund. Korea's economy is benefiting as companies are competing on the quality of their products, not price. For example, companies like Samsung and Hyundai have been able to grab market share with their products, so the strength of their currency versus competing companies in countries like Japan matters less. The economy will likely grow at 3.5% to 4%.
So people will buy "made in Korea" products because they're good, not because they're cheap. How else does Korea differ from some other emerging markets?
While some emerging markets have been hit by the Fed tapering and a possible shortage of global liquidity that could make it harder for them to finance deficits, Korea has never relied on that global liquidity. It has a record current-account surplus, which means it is exporting more than it imports. It also has very little government debt.
What attracted you to Ukraine?
It is actually a very rich country with an educated population, incredible agricultural wealth, and a manufacturing base that, with investment, could improve. There is long-term potential. The good news is it started this crisis with very solvent debt conditions—only 40% debt to GDP. That's important because it indicates a country's ability to pay back debt. [The European Union average debt/GDP was 87%.] It's been a question of accessing global capital and liquidity.
How is Ukraine handling the crisis?
A crisis is a horrible thing to waste, and Ukraine didn't waste it. The urgency let a long list of structural reforms pass that had previously run into opposition. They signed a good package with the International Monetary Fund, which unlocked other potential international assistance; now they have ample liquidity. It is also moving toward a flexible exchange rate rather than one that is pegged. That should weaken the currency, making exports more competitive, which will help its balance of what it imports versus exports. Ukraine is also freezing public wages and hiring to cut costs and reforming the way it awards government contracts to tackle corruption.
What about the political crisis?
Hopefully it can engineer changes that move Ukraine away from the tug of war—like moving away from NATO membership and giving some of its Russian-speaking states more autonomy in a decentralized, federalist system. The economy is highly integrated with those of Europe and Russia, so it's in Ukraine's best interest to deepen both relationships and, therefore, decide against joining NATO. That would allow Russia to move away from intervention, and Ukraine can then live up to its full economic potential. The high voter turnout for Petro Poroshenko [voted president-elect last month] gives him a solid mandate.
Isn't Ukraine a risky bet, even for you?
This isn't much different than others. During the financial crisis, Lithuania ran into short-term solvency challenges because it couldn't access capital markets. We were the largest investors providing them short-term liquidity. Now, Lithuania is issuing debt with very low yields, and no one even talks about it. That took about four years. Hungary also took about two to three years to pay off. We may need to be patient. It may be three years before some of these factors can move in a positive direction in Ukraine.
Let's talk about currencies. What's attractive?
We've been adding the Mexican peso. There's a lot of fear that if U.S. growth improves and interest rates go up, it's bad for Mexico. But our argument is that it's great, because Mexico has taken over the world in terms of manufacturing. Remittance flow is also highly tied to the U.S. economy.
While the Federal Reserve is finishing up its bond-buying, Japan is just beginning. What is your view of Prime Minister Shinzo Abe's reform stimulus efforts, or Abenomics?
Quantitative easing is a core part of Abenomics. It is easier to execute and the only part that has really taken hold. As long as Abe is popular, he'll rely on QE heavily. Japan has high debt levels—200% debt to GDP and an 8% fiscal deficit. In the past, Japan could fund its deficits domestically from the savings of the private sector. Now, that is no longer enough, and the government has to borrow more money from the central bank, which is printing money.
What does that mean for investors?
The yen will continue to weaken because of the BOJ money-printing, which is why we are long dollars and short yen. Capital will continue to flow abroad—anecdotally, it is already moving from Japan into Southeast Asia and Latin America.
Will the BOJ's bond-buying mitigate the effect of the Fed's tapering?
Everyone is focused on the shortage of capital globally as the Fed tapers. But they are ignoring what the BOJ is doing, which will more than offset that. They're getting the call wrong by being bearish on all emerging markets.
What does that extra money mean for emerging markets?
In 2013, the divergence in performance between the best and worst emerging market was more than 40 percentage points. We have always carefully picked countries with strong fundamentals and where we felt appropriate policy decisions were being made. Even though everyone has turned bullish recently, we would be cautious on more vulnerable places like Turkey.
What gives you the comfort to pull the trigger on an investment?
It's the feeling in the pit of your stomach when you are questioning yourself and everyone else thinks you are wrong. If we are confident in the fundamentals and the team has ripped it apart, that's usually a good check that we are doing the right thing. If it's really easy and everyone is in agreement, it's probably not.

Checking Accounts
Checking accounts often offer the least bang for your buck.
At the end of March, depositors held $1.1 trillion in checking accounts that paid no interest, up 17% from a year earlier, according to Moebs. Yields also are declining on many checking accounts that do pay interest.
In addition, depositors are paying higher fees on checking accounts. This year, 41% of financial institutions, including banks and credit unions, don't offer free checking without imposing conditions, the highest proportion since 2002, according to a Moebs survey.
Many institutions charge monthly service fees, which typically range from $3 to $15 and can quickly eat into any interest on the account.
But there are some banks that offer checking accounts that pay relatively high yields and don't charge a monthly fee.
As with savings accounts, consider looking online. First National Bank of Omaha, in Nebraska, has an online unit, fnbodirect.com, that pays 0.65% annually on its checking account on balances up to $1 million. This is among the highest-yielding checking accounts available nationwide that doesn't charge a monthly fee or require savers to meet restrictive conditions, according to DepositAccounts.com.
Ally Bank, a unit of Detroit-based Ally Financial, ALLY +0.38% offers 0.60% if you maintain a balance of at least $15,000. There is no monthly fee.
Even checking accounts that carry no monthly service fee can cost a bundle in other charges, such as for overdrawing or withdrawing funds from automated teller machines outside the bank's network. Most institutions include a list of checking-account fees on their sites.
Many community banks and credit unions offer higher-yielding checking accounts, but they often come with catches. Account holders may need to arrange for a regular direct deposit of funds or use a debit card linked to an account a certain number of times each month.
In most cases, consumers also must live or work in the area the institution serves.
For example, Lake Michigan Credit Union, based in Grand Rapids, Mich., offers one of the highest-yielding checking accounts in the country, at 3% on up to $15,000. But the yield is only available to members, who generally must live, work, study or worship in Michigan's Lower Peninsula, and their families. People who don't meet the criteria can become members if they donate to a local charity.
Certificates of Deposit
Banks are trying to make certificates of deposit a better deal. They aren't always succeeding.
Traditional CDs have rigid terms, paying a fixed yield to depositors who agree to lock up their money for a certain term, and charging for early withdrawal.
The problem is that fewer depositors are willing to strike that deal with interest rates at historic lows, for fear the Federal Reserve could push rates higher and leave them stuck with the lower yield, says Mr. Geller of Market Rates Insight.
Longer-term CDs in particular have fallen out of favor, he says. The amount of money socked away in CDs with maturities of more than three years fell to $157 billion by the end of March, down 8% from a year prior, according to Market Rates Insight.
Some banks are offering CDs with yields that can change before maturity. Ally Bank and CIT Bank, for example, offer CDs with yields that rise if the banks start offering a higher interest rate.
Such deals may sound appealing, but savers should be cautious. If a bank doesn't increase its interest rate, or if the interest-rate index an account is pegged to doesn't rise, savers are stuck. If interest rates decline, however, the yield won't.
In some cases, you can get more favorable terms with a traditional CD.
Minneapolis-based U.S. Bancorp, USB +0.92% for example, pays 0.40% on a 30-month CD whose yield can rise before maturity. But savers can earn more with a one-year plain-vanilla CD from GE Capital Bank, another GE unit, which pays 1.10%, a two-year CD from Salem Five Direct that pays 1.25% or a three-year CD that pays 1.45% from SLM Corp. SLM +1.02% , the Newark, Del.-based student lender known as Sallie Mae, which also offers bank accounts.
You also could get a better deal from a traditional long-term CD that charges a relatively low penalty for early withdrawal, says Richard Barrington, senior financial analyst at MoneyRates.com, which compares bank-account terms.
Consider this example: A saver who deposited $100,000 into a one-year CD with a 1.1% yield—the highest available nationally for deposits of that size, according to DepositAccounts.com—would collect $1,100 in interest at maturity. Both Synchrony Bank and EverBank offer that yield.
By comparison, CIT Bank and Synchrony Bank offer five-year CDs with 2.3% annual yields. If you deposited $100,000 into Synchrony's CD and kept it there for 13 months before withdrawing the money, you would collect $1,156 in interest, even after paying a penalty of six months' interest.
Prepaid Cards
Many consumers associate prepaid cards with spending. But they also can help you earn more money on your cash, if you have the time to find a good deal and use the cards wisely.
Prepaid cards offer consumers the convenience of loading funds onto a card that they later can use to get cash from an ATM or to pay for goods at a store.
Several prepaid cards also come with a perk: Cardholders can earn upwards of 5% on cash stored on the cards.
For example, Mango Financial, a prepaid-card issuer and subsidiary of Rêv Worldwide, based in Austin, Texas, offers a 6% yield to cardholders on up to $5,000. Prepaid cards provided by NetSpend, a unit of Total System Services, TSS +1.17% a card-processing company based in Columbus, Ga., can be linked to savings accounts that pay 5% on balances up to the same limit.
These companies aren't banks, but funds loaded onto the cards are covered by FDIC insurance, like most regular bank accounts.
Use caution: Many prepaid cards charge monthly service fees, which typically range from $5 to $10 a month and which can quickly erode the benefit of higher interest payments.
But it is possible to avoid fees in some cases, which can make the yields on prepaid cards appealing, says Odysseas Papadimitriou, chief executive at WalletHub.com, a bank-account comparison site.
NetSpend offers one prepaid card that has no monthly fee but charges cardholders for most transactions. However, cardholders can avoid the fee by not shopping with the card.
In most cases, cardholders must pay a separate fee to access the funds through an ATM, often at least $2 to $2.50 per withdrawal.
Some firms also impose other conditions. Mango Financial, for example, requires a direct deposit into the savings account each month or the yield drops to 2%. The company also charges $3 a month, which can't be waived.
Still, the deals can be worthwhile. Assuming one ATM fee to withdraw the entire amount, account holders who add $500 to their card each month for 10 months and don't spend it can collect $106.07 in interest on a Mango account.
By contrast, the interest on that same amount held in a savings account yielding the average 0.08% would be $1.84.

Do some research,which takes a little longer now that the 2008-early 2009 debacle falls between published 5 and 10 year past performances,but there is info out there and also on this site. Harvest some gains into a L/S fund you can feel comfy with or a hedged equity fund similar to RGHVX or MARVX. I've been scolded on this site concerning BRUFX and it's performance in the down draft,but the fund continues to set new highs and check out the M* 15 yr ratings and risk.http://performance.morningstar.com/fund/ratings-risk.action?t=BRUFX&region=usa&culture=en-US .It's my largest holding.Takes a little work to invest because the fund is not available in the fund super markets,but the long term record makes a compelling case.
http://www.marketwatch.com/tools/mutual-fund/screener?FundType=0&FundValue=0&ReturnFundPeriod=11
Everyone has a favorite fund story for down markets.Maybe this thread will bring some of those "big fish" stories to light.Thanks to rsorden 's post on OTCRX ,never was aware of the fund until I read about it on this site. I opened a position in the fund and also in HHCAX. Will the funds protect me in a 20%-40% bear market? Which funds have?Which funds haven't had "lagging years"?
Thoughts on Otter Creek Long/Short (OTCRX)
It's a new fund, but the predecessor LP was successful despite a few lagging years. Looking for something to compliment a heavy equity portfolio, in addition to William Blair Macro Allocation (WMCNX).
rsorden April 5 in Fund Discussions http://www.mutualfundobserver.com/discuss/discussion/comment/41143/#Comment_41143
http://news.morningstar.com/fund-category-returns/longshort-equity/$FOCA$LO.aspx

The biggest of all!
(Reuters) - As Alibaba prepares for what could be the biggest tech company IPO to date, the Chinese e-commerce giant has been counseling employees on how to deal with the roughly $41 billion they could unlock through a New York listing.
While some staffers have inquired if premium brand BMW (BMWG.DE) sells cars in Alibaba's corporate orange, others may invest windfall stock gains in property in North America or channel funds back into start-up ventures in China, hoping to build future Alibabas, bankers and financial planners say.
Current and former Alibaba employees hold 26.7 percent of the company, having built up their holdings through stock options and other incentives awarded since 1999, according to securities filings, though these didn't detail the number of employee shareholders.
The IPO windfall - Alibaba could be worth $152 billion, according to the average from a Reuters survey of 25 analysts - will be larger than anything China has seen because of the depth of the group's employee ownership and the size of the company.
HOW TO SPEND IT
As happened after Facebook Inc's (FB.O) IPO in 2012, the new Alibaba millionaires are seen driving up demand for luxury cars and apartments, giving a boost to the economy of China's eastern city of Hangzhou, where the company is based.
But the Chinese government's austerity campaign is likely to keep a lid on too much ostentatious spending, and because the stock listing will be in the United States most of the money employees receive from eventual stake sales would likely be kept offshore rather than flow back to Alibaba's Chinese base.
"Check real estate in Vancouver, not so much Ferraris and real estate in China," said a person closely involved with the IPO who was not authorized to speak publicly on the issue.
Hangzhou is in a part of China already known as a hotbed for entrepreneurship. As of last year, the city had more than 560 multi-millionaires and in a decade is expected to rival Los Angeles in the number of so-called ultra high net worth individuals, according to property consultant Knight Frank.
Alibaba's biggest single shareholder, with a 34.4 percent stake, is Japanese telecoms firm SoftBank Corp (9984.T), followed by U.S. internet group Yahoo Inc (YHOO.O), with 22.6 percent. Other large shareholders include Silver Lake, DST Global and Singapore state investor Temasek [TEM.UL].
http://www.reuters.com/article/2014/06/05/us-alibaba-group-millionaires-idUSKBN0EF29W20140605?feedType=RSS&feedName=businessNews
Other China News
Environmental Initiatives Continue in China
China’s Middle Class Develops a Greater Taste for Foreign Goods
UGHHH ?
China Internet Fosters Free Speech In an open recognition of free speech, China news agency Xinhua has
cited a government report that China’s internet has become a forum
for free speech in the country.
Baidu Expands in Google’s Backyard
http://kraneshares.com/resources/kraneshares_capitalvue_may27.pdf?utm_source=KraneShares+Weekly+-+General&utm_campaign=83e990e7f5-KraneShares_Weekly_Email10_17_2013&utm_medium=email&utm_term=0_6d32ba24ce-83e990e7f5-27509461
Winners and Losers in the U.S.-China Solar-panel War
June 4, 2014, 1:15 PM ET by Claudia Assis ,Energy Ticker
The U.S. government’s decision to impose new, steep anti-subsidy tariffs on Chinese solar panels roiled solar stocks on Wednesday — and it will have wide-ranging implications for consumers and companies just as cheap and plentiful solar products from China have fueled the boom in rooftop solar-power systems.
For a start, there’s no denying that solar modules will become more expensive, and in fairly short order. Who will pay for that increase, however, is unclear. The solar-panel makers affected could absorb some of the costs, or move some of their production out of China. Buyers could switch manufacturers, seeking those not affected by the ruling.
The Solar Energy Industries Association called the tariffs “damaging” for U.S. consumers, and said they will slow the adoption of solar power in the U.S.
The U.S. imposed duties of up to 36% on Chinese solar products in 2012 after concluding the companies had received unfair subsidies from the Chinese government and sold products in the U.S. market below cost, but the duties didn’t include solar panels made with solar cells assembled in other countries.
The Commerce Department set up preliminary duties between 18.56% to $35.21% late Tuesday, but don’t let “preliminary” fool you — tariffs will be collected right away.
China’s Ministry of Commerce said it is “strongly dissatisfied” with Tuesday’s decision. The move “is an abuse of trade remedies, has an obvious hint of trade protectionism and will inevitably lead to the escalation of trade disputes between China and the U.S.,” the ministry said in a statement on its website, according to The Wall Street Journal.
http://blogs.marketwatch.com/energy-ticker/2014/06/04/winners-and-losers-in-the-u-s-china-solar-panel-war/?mod=WSJBlog
Either Sunshine Or Thunderstorms
For investors, solar stocks seem to whipsaw on any bit of good or bad news. TSL jumped 31% of its earnings beat, only to fall by the wayside over the next few days. Given just how quickly they move from profits to losses, quarter-to-quarter doesn’t necessarily place them firmly in the “investment” camp.
To that end, the best way to play solar stocks is still the previously mentioned TAN ETF or its rival Market Vectors Solar Energy ETF (KWT[12]). Both offer a broad way to play the entire solar spectrum. And given just how varied the earnings and guidance reports have been, that’s probably the best choice for investors at this point. The good should even out the bad.
The bottom line: Don’t get too excited over the recent gains in solar stock world; there still could be plenty of clouds ahead. A variety of factors will continue to pull the sector in both directions.
http://investorplace.com/2014/06/solar-stocks-fslr-tsl-tan/print

FYI: Copy & Paste 5/3/14 Grace L. Williams: Barron's
Regards,
Ted
While many investors think U.S. stocks are fully valued, Bill Nygren of Oakmark Funds sees plenty of opportunity, particularly among financials. Moreover, Nygren says many of America's best companies can be bought at a market multiple.
The self-described "very frustrated Chicago Cubs fan" has hardly frustrated investors, delivering breathtaking long-term returns. Over the past five-, 10-, and 15-year periods, Oakmark Select (ticker: OAKLX ) has generated annual returns of 21.99%, 8.4% and 9.18% easily outpacing the S&P 500 at 18.17%, 7.7% and 4.2%. Year-to-date, the fund has returned 7.59%, compared to the index at 4.2%.
Name: William Nygren
Age: 55
Title: Co-portfolio manager
Education: B.S. in accounting, University of Minnesota; M.S. in finance, University of Wisconsin
Hobbies: Chicago Blackhawks and Cubs sports fan
Nygren, who has run the fund since 1996, can also nimbly navigate down markets. In 2001, his fund surged 26%, outpacing the S&P by a staggering 38 percentage points. Morningstar rightly named Nygren its Domestic Stock Fund Manager of the Year. Today, Morningstar rates the fund four stars and assigns it a gold rating.
As a concentrated fund, Oakmark Select may not be for the faint of heart. Its top five holdings comprise roughly 30% of the portfolio, and the fund holds just 20 stocks. Nygren's enviable track record should assuage concerns, however. His secret sauce? Nygren looks for names trading at a large discount to their intrinsic business value; a business value that grows over time; and management that is economically aligned with outside shareholders.
Barrons.com recently spoke with Nygren about his long-term outperformance and where he sees value today.
Barrons.com: What has contributed to your long-term success?
Bill Nygren: We bring a private-equity perspective to public-equity investing. By that, I mean we take the very long-term time horizon that private equity firms typically take, and try to anticipate how investors might view a company differently five years from now. We are very, very long-term investors and being able to buy a great business at an average price is just as much value investing as buying an average business at a great price.
Q: There's a guy from Nebraska who takes a similar approach. Looking at sectors, your fund is overweight in financials. Let's talk about that.
A: First up is Bank of America ( BAC ), which sells at about two-thirds of book value. We believe that within a couple of years, they should be earning at least 10% on that book value. If they do that, then the stock is selling today at about seven times earnings. Even if they can't grow organically because of the high quality of their balance sheet, (they basically are at Basel III standards already) all of the earnings can be returned to shareholders through dividends and share repurchase. So, even if you don't believe that long growth provides great opportunity for the banks, a stock like this is very cheap.
Fund Facts
(as of May 20, 2014)
Oakmark Select Fund (OAKLX)
Assets: $5.1 billion
Expense Ratio: 1.01%
Front Load: None
Annual Portfolio Turnover: 24%
Yield: 0.09%
Source: Morningstar
Q: Tell us about some other financial names.
A: I used Bank of America as an example, but really, the story for any of the financial names in our portfolio would be similar. American International Group ( AIG ) is selling at about 70% of book value, JPMorgan Chase ( JPM ) sells at a significant discount-to-book value. Capital One Financial ( COF ) is at a small discount-to-book value, but it doesn't have as many legacy-housing-cost issues as JPMorgan and Bank of America have, so it's at a little lower current P/E, but not at quite as much recovery potential as the other two have. The P/E distribution in the market today has become extremely narrow, so most stocks sell pretty close to the market multiple if you look at just a couple of years.
Q: Another financial name you own is MasterCard ( MA ).
A: MasterCard has a tremendous tailwind because of the global conversion of cash transactions to plastic. They will have an above-average-growth rate for as far into the future as we can see, adjusted for the quality of their balance-sheet forecasting out just a couple of years. The market isn't demanding investors pay much of a premium at all for MasterCard. So rather than saying because everything is priced the same, there's nothing to do, we are taking the opportunity to buy higher-quality businesses.
Q: Your top holding is TRW Automotive ( TRW ). What's the story there?
A: If you look across the auto parts industry today, most companies are selling at about 15 times earnings. At $80, TRW is selling at about 11 times. One of the reasons is they have made large investments in plants in China. We anticipate that within about two years, the plants will become highly profitable and TRW in two to three years could be making $10 a share and selling at the same 15 times earnings which the average auto parts company is selling at.
Q: Moving to the energy space, I see you own Apache ( APA ). Tell us about your conviction here.
A: In the oil and gas industry, it's rare to find management teams that are as good at capital allocation as in the rest of the market. Most oil and gas executives reinvest all of the cash flow they generate because they are focused mostly on top-line growth. Apache is a little bit different in that they are willing to grow per-share value through shrinking the number of shares outstanding. Most analysis looking through asset by asset would suggest that Apache is at a much larger discount-to-value than the average oil and gas stock. Management has been active in selling assets that they can get 90 cents on the dollar for and using those proceeds to buy back their own stock at 60 cents on the dollar. When we find management teams that are as excited about growth through a shrinking share base, as they are through a top-line growth, we find that those companies tend to perform much better over the long term.
Top 10 Holdings
(as of March 31, 2014)
TRW Automotive Holdings (TRW)
TE Connectivity (TEL)
Bank of America (BAC)
Capital One Financial (COF)
Apache (APA)
Medtronic (MDT)
DirecTV (DTV)
American International Group (AIG)
MasterCard (MA)
JPMorgan Chase (JPM)
Source: Morningstar
Q: Two of your holdings, DirecTV ( DTV ) and Comcast ( CMCSK ), are making headlines right now on acquisition news. What do you like about the companies and where do you see them headed?
A: One of the things we've most admired about DirecTV's management team is their willingness to commit all of their excess capital to repurchasing stock when they thought it was the most value-added acquisition they could make. Over the course of the last five years, Direct TV has reduced their shares outstanding by over 50%. The recent $95 per-share deal with AT&T (T) would have been something much smaller than that had management not so aggressively reduced the number of shares outstanding.
Q: And Comcast?
A: One of the reasons we own Comcast is the management team there has also done a very good job of capital allocation, largely adding value through share repurchases. We believe the Time Warner Cable ( TWC ) acquisition will get done at a price that was even less than Comcast's own stock was selling for after we consider synergies. It's likely that the transaction gets approved by the Justice Department. They don't operate in the same communities, so it is not reducing choice for customers, in fact, approval of a deal like Comcast Time Warner is actually pro-consumer because it gives the cable supplier more ammunition in the fight against higher-programming fees.
Q: Thank you for your time.
M* Snapshot Of OAKLX: http://quotes.morningstar.com/fund/oaklx/f?t=oaklx
Fund Is Ranked # 36 In The (LCB) Category By U.S. news & World Report:
http://money.usnews.com/funds/mutual-funds/large-blend/oakmark-select-fund/oaklx

For anyone with a relationship at Fidelity, I would suggest the "load waved" moderate allocation fund HWIAX. It's investment objectives: the fund seeks high current income and long-term growth of income, as well as capital appreciation.
It is a small, very under advertised fund but has begun to accumulate AUM since going "load waved" at Fidelity.
The fund is managed using a "team" approach. The stock portion of the fund currently holds mega-cap high quality U.S. dividend payers and has an international component. The bond portion is high yield and is managed by Hotchkis and Wiley's credible high yield bond fund managers. The fund pays it's dividend monthly.
I own and use this fund as part of my core holdings...and find that the bond portion of this fund matches up very nicely with other conservative or moderate allocation funds that hold higher quality bonds. Check out it's statics and you will see that it has been a very easy fund to own.

Late Evening Takes From Around the World June 1st/2nd
Forecasts for a rebound in U.S. growth in the second quarter and stimulus from central banks in Japan, Europe and China, along with higher-than-estimated corporate earnings, helped send the value of global shares to a record $64 trillion last week.
The Chicago Board Options Exchange Volatility Index, a gauge of options prices known as VIX, slipped 1.5 percent to 11.40 on May 30. The measure closed for a fifth straight day below 12, the longest stretch since February 2007, data compiled by Bloomberg show.
The S&P 500 traded at 16.3 times estimated earnings, compared with 13 on the MSCI Asia Pacific Index and 15.4 on the Europe Stoxx 600 Index, according to data compiled by Bloomberg.
China’s Communist Party has stepped up the pace of stimulus measures, including faster spending from government budgets and increased railway investment, to help meet an official growth target of about 7.5 percent this year. Asia’s biggest economy is projected by analysts to grow 7.3 percent in 2014, which would be the weakest pace since 1990.
“Policy fine-tuning announcements in China continue to mount up, adding to confidence that growth will be supported around 7.5 percent this year,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $133 billion. “More easing measures are likely.”
Economists forecast European Central Bank President Mario Draghi and policy makers will cut the deposit rate when they meet on June 5, with a euro-area factory report today estimated to hold steady at the lowest level since November. Equity markets in China, Hong Kong and New Zealand are closed today for holidays.
http://www.bloomberg.com/news/2014-06-01/copper-climbs-as-japan-stock-index-futures-rise-after-china-data.html
“The so-called mini-stimulus is helping to stabilize the economy,” said Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. At the same time, the rebound in PMI isn’t as strong compared with the same period in previous years, and the “central government needs to make a bigger move,” he said.
http://www.bloomberg.com/news/2014-06-02/china-manufacturing-gauge-rises-to-five-month-high.html
Are China Funds a Bargain? Most are Down Y T D
http://news.morningstar.com/fund-category-returns/china-region/$FOCA$CH.aspx
China News
Alibaba’s Listing Date Greatly Anticipated
E-Commerce Feeds China Online Banking Growth
China’s Provinces and Cities to Issue First Muni Bonds
China Takes Bold Steps to Develop Renewable Energy
Another Chinese City to Surpass Hong Kong in Growth
http://kraneshares.com/resources/kraneshares_capitalvue_may20.pdf?utm_source=KraneShares+Weekly+-+General&utm_campaign=0293c09488-KraneShares_Weekly_Email10_17_2013&utm_medium=email&utm_term=0_6d32ba24ce-0293c09488-27509461
Thai Army Rulers Prepare Emergency Economic Measures
The military junta running Thailand has drawn up a list of emergency measures such as price caps on fuel and loan guarantees for small firms to kick-start an economy threatened by recession after months of political turmoil.
The plans, outlined by Air Chief Marshal Prajin Juntong late on Sunday after a meeting with officials at economic ministries, take in longer-term measures such as the development of special economic zones on the borders with Myanmar, Laos and Malaysia.
The military toppled the remnants of former Prime Minister Yingluck Shinawatra's administration on May 22 after months of protests that had forced government ministries to close, hurt business confidence and caused the economy to shrink.
In a televised address on Friday, Prayuth said the military would need time to reconcile Thailand's antagonistic political forces and push through reforms, indicating there would be no general election for 15 months at least.
The United States, European Union countries and others have called for the military to restore democracy quickly, release political detainees and end censorship.
http://www.reuters.com/article/2014/06/02/us-thailand-politics-idUSKBN0ED06C20140602?feedType=RSS&feedName=topNews
Government vs Governance
Joshua M Brown June 1st, 2014http://www.thereformedbroker.com/2014/06/01/government-vs-governance/
Eric Peters via wkndnotes:
Overall: “The focus should be on minimum government but maximum governance,” announced Narenda Modi, a fierce Hindu Nationalist, born the low-caste son of a tea stall owner. India’s 15th Prime Minister presides over the 1st parliamentary majority in 25yrs, paving the way for red-tape reform. Of course, India is the great hope for a planet starved of growth. For the next decade, 1mm Indians will join the workforce each and every month. Peacefully harnessing that potential requires good governance, education, investment, innovation, infrastructure. And as Modi replaced his hopeless predecessor’s 71 ministers with a team of 45, speaking of India’s “Glorious Future,” Premier Li promised a mind-numbing series of macro-prudential policies to stimulate growth. You see, for the next decade, 100k Chinese will leave the workforce each and every month. Not even the most nimble Shanghai Acrobat, perched perilously upon earth’s most bodacious bubble, can keep so many overpriced assets spinning atop long wobbly poles. Facing such a fierce demographic headwind. Without robust growth, inflation. Or a bit of nationalist fervor. So Chinese ships sank a fishing boat. Inside Vietnam’s territorial waters. As Japan’s nationalist Abe re-armed.
Anyhow, Modi wasn’t the only nationalist elected. French and British nationalists trounced centrist opponents. Thailand’s King backed the coup. Egypt’s military dictator won a stunning 93% landslide (the remaining 7 voters posted Facebook selfies with 700 virgins). Poroshenko crushed the opposition, promising to “end the war, end chaos, and bring peace to a united Ukraine.” Then popped a bunch of Russian commandos disguised as Novorossiya nationalists. Moscow’s nationalist-in-chief declared, “Strictly speaking it was impossible to hold elections.” Assad prepared for his June 3rd landslide. And Obama rambled on about new terrorist threats now emanating from the Syrian power vacuum that he himself created. As across the globe, nationalism creeps into the cracks. Left by maximum government and minimum governance.
***
Brilliant, as always.
http://www.wkndnotes.com/

Hi Crash ... Old_Skeet here:
Look at the retail offering of TIBIX which is TIBAX which has a lower entry at $5,000 in a taxable account and $2,000 in an IRA. In addition, you might wish to look at SVAAX as it too boast a good yield at about 4.75% and pays out monthly.
If you wish to look at some other type of funds that I call distribution funds and they do offer a good yield and pay out monthly then look at FKINX (about a five percent yield), IGPAX (about a six percent yield), AZNAX (Disburses a fixed rate at 8.75 cents per month for about a 8.2% distribution yield WITH Not All COMING from income and dividends as some is paid out from capital gains.) and finally PGBAX which pays out monthly and has a yield of about 4.75%. The yields I noted are based upon TTM and current valuation.
I own all that I have noted above including TIBAX; and, you should do your own research to better determine if these funds that I noted might be right for you.
Steady as she goes as I keep on keeping-on and staying my investment course.
I wish all ... "Good Investing."
Old_Skeet

Like so much, this depends on what you want the fund to do. If you want current income, VDIGX and PRBLX aren't for you. If you want a long term hold focusing on quality dividend growth for capital appreciation, they're both very good. Not really familiar with it, but HULIX costs too much to be an effective dividend oriented fund.
The differences in construction between VIG/VDAIX and VYM/VHDYX or DVY are instructive. If what you want is high yield that opens up other doors.
Edit: Also check out ted's link to the Jason Zweig article on dividend growth funds and how they might behave in different markets.