Reply to @MikeM: Before buying RGHVX I wondered about this up/down as well, and whether it would continue (roughly) or change. I went ahead and also did the equivalent purchase with ARLSX, which I see has not entered into this discussion. (Ted?)

Reply to @Ted: what I'm looking at is upside downside capture ratio. In the last year the fund has captured 97% of SPY. It has only seen 72% of SPY's losses. This has only been a mutual fund since Apr. 2012. Before that it was a hedge fund. Using hedge fund data over the last 5 years RGHVX has captured 88% of SPY and only 57% of downside insurance. So that my friend is what I was after. I know alternative funds aren't your cup of tea.
P.S,, the Bears really screwed themselves on that Roger's fumble. That will be talked about for a long time. Being a Bills fan I can feel your pain. My favorite team through the playoffs will be any team playing the Patriots!!!

Reply to @cman: As Scott pointed out in 2008, SPY was down 36.81%, while RGHVX was down 34.42%. Please, I hardly call that "insurance".
Regards,
Ted

Reply to @Ted: It depends on how you value "insurance" and whether you feel the need. Insurance premiums always look like a bad idea in retrospect except in the few cases when you are glad you had it.
As to whether RGHVX would have provided that insurance if and when is a contra-factual and more difficult one to answer. Like most insurance, you never know how good it is until you have to rely on it!
I think it eventually boils down to whether one can sleep better without it or with it because you cannot make the decision to buy in retrospect.
A live chicken is better than a slaughtered bull.

Reply to @MikeM: To each his/ her own, the price you pay for being chicken.
SPY: YTD: 31.70% ER: 0.09%
RGHVX: YTD: 28.80%: ER: 1.50%
Regards,
Ted

This fund sells call options against a value portfolio, and has been written up as a Star in the Shadows. I'm leery of the market continuing it's climb, but reluctant to reduce equity holdings. This fund seems like a good place to be for a chicken bull. I'd be interested in the opinion of others,

I've been thinking about the Junkster coined term,

MFO Group Think Funds

. I believe he is absolutely right with that phrase. But I don't think it is necessarily a bad thing. Some really good funds appear here on MFO that I may not have heard of any place else. But I have bought into funds that didn't feel right after I brought them into my line-up. At least they didn't feel right as long term holdings after purchase.
So, I thought I would list the GTF (group think funds) that have been talked about here on MFO over the years, the ones I've tried that worked and the ones that didn't fit so well.
My GTF's that worked out well:
YAFFX, MACSX, FPACX, PRHSX, FAAFX, LSBRX, ODVYX,
And though I only bought into these funds this year, GPGOX and RGHVX are becoming favorites.
Some that didn't work out:
ARIVX, yes, all managers miscalculate at times, but this one felt Hussman-esk
USAGX, TGLDX, worst buys I ever made. not for a buy and hold portfolio imho, Vegas betting only
MAINX, why? it fills such a small nitch
HSTRX, HSGFX, huge alkaloids before and after 2008. but the manager's (lack of) skills became evident.
PAUIX, just wasn't right for me. In fact PIMCO's derivative games just don't set well with me.
PRPFX, great when gold and long treasuries were strong, but that static portfolio for the next 10 years?
Anyone else want to give there best and worst

Group Think Funds

Reply to @hank:
PRWCX is a perfectly fine fund, but if you are (still) shopping, compare its 6y chart with GLRBX, JABAX, FPACX, MAPOX, and ICMBX (my fave in the bunch, from MFO). It had a nontrivially larger dip in 09 (which is why I chose 6y) with equal or worse recovery, fwiw. Its risk ratings in M* and Lipper are no better than the others. I see no compelling reason to *prefer* it, although its much more recent performance is a bit stronger. Just two cents to consider, since we presumably look to balanced funds for downside protection. (Thanks to MFO, I myself am now slowly adding or subbing in ARLSX and RGHVX for those nearer-term accounts where I have had balanced funds.)

Reply to @MikeM: I like small funds as much as the next reader here, but at $29 million I'd be worried that it is a bit *too* small for what is likely a relatively expensive strategy. RiverPark liquidated their small cap fund earlier this year, although that had terrible performance and even fewer assets. Hopefully the good performance of RGHVX will help it avoid a similar fate.
It depends on the asset class, but I think there's a sweet spot around $100m-$500m AUM where I'm more comfortable that the fund will be both nimble and sustainable.

Comment to Charles; I agree WBMIX is an interesting, tactical new fund. But David had a nice, positive write up about RGHVX a while back and that fund seems to be doing better than WBMIX. The RGHVX fund never seems to get brougt up much. I started buying RGHVX back in June and have worked up to a 5% stake in it. I've been very happy with the results and how it's performed - so far.
RGHVX has only been a mutual fund for about a year and a half. M* gives back data as a hedge fund, but I'm not sure that is apples to apples to the fund. Fund inception date is about the same time as WBMIX (the whitebox bund is about 5 months older), so the two investment approaches would make a nice comparison.
I actually hope RGHVX can stay under the radar. It only has about 29m in assets which makes it pretty nimble.

FYI:
Regards,
Ted
http://www.mutualfundobserver.com/2013/10/october-1-2013/

My choice for the Long /short category would be RGHVX, MFLDX or FMLSX.

Hi Heather. Although I think you are set up too conservatively for a +20 year time frame, I think your portfolio is constructed pretty well. And the reason I believe that is that it looks very similar to the way I set mine up. Very similar. We have different names for our categories, but we have the same desire to use proven active management with flexible investment styles. But of course, I am only 2 1/2 years to retirement (hopefully).
You have categories called global asset allocators and tactile long/short. I just lump that together and call it balanced and alternative strategies. But it's similar in that we want good managers to have a lot of investment flexibility, geographically and with asset allocation.
You, 55% in:
WABIX, FPACX, SGENX, GHUIX, AQMIX
me, 40% in
FPACX, FAAFX, MACSX, PAUIX, RGHVX
Then we have your more conventional equity/bond mix.
you 50/50 mix, YAFFX, SFGIX / DBLTX, OSTIX, TTRZX, FPNIX
me 60/40 mix, YAFFX, ARIVX, GPGOX, OAKIX, ODVYX / MWTRX, LSBRX, PRWBX, FGBRX
I will say, I keep ~10% out of this "core" part of the portfolio to move around with the hopes of adding alpha. Not sure I really do.
So, can't argue with your portfolio structure, but, I'll give my 2cents on other stuff. I don't know much about some of your flexible allocation funds, but I do think you have way to much allocated to them. I can see where you are coming from - trying to reduce volatility, but 55% of the portfolio? I'd knock that back to maybe 30% with FPACX, WABIX and one other. I might then go with 50% in stock funds and 20% in bond funds. There are some real good capital-preservation equity managers listed on this sight to chose from - or even index funds to fill some of the large cap equity portion. Re-evaluate in 10 years and bring it closer to a 60:40 or 50:50 mix down the road if you like.
Anyway, I like what you did and I guess you have to go with your gut on risk versus reward. But keep in mind, like others have said, volatility is not the same as risk over a long investment horizon (by the way, I do equate volatility to risk for shorter horizons).
Good luck and nice job.

My opinion is 5-10% is a good place to be if you have conviction for the fund's management and if you consider it a core holding in your portfolio. At this time, I have 10% in both YAFFX and FPACX. I'm considering adding another 5% to FPACX. I have plenty of others at 5% or more, MACSX, ARIVX, FAAFX, PAUIX, RGHVX, MWTRX, FGBRX.
I'll add another opinion, and I'm sure this will be unpopular with many here, having less than 2% is kind of a waste of time for that fund to affect the total return in your portfolio. But I guess that would just take us into the the old 'what is the number of funds' needed in a portfolio.

I'm in the same boat as you. A couple months ago I sold my stake in PGDPX and looked at where to put that money. I put it in RGHVX. Since purchase, I've been watching it closely and it has actually handled the last couple months market volatility very well.
David has a nice write-up on the fund. A couple of side facts that sold me was that it has very low EUM which I think gives it quick response if needed, and much of the money in the fund belongs to management and their families.
I also cut my PAUIX in half and that money is waiting to be allocated. My two choices right now are to up my stake in FPACX (from 10 to 15%) or after listening to Hank in another post, put it in a tried and true fund - PRWCX.

Some good points made here. I think one of the traps we fall into, my self included, is the search for the ultimate fund that has a gimmick that proclaims to do well in up and down markets - that alternative fund. It gets ballyhooed here on MFO while it's in style. Then we find out whoops, it's not working like I thought. Lets take ARIVX, PAUDX, AQRIX for example. How many of us have bailed on one or more of those in the last few months? I remember back in 2008 there being a lot of talk about the Hussman fund, HSTRX. Not much talk anymore and probably not held by many here. Could other alternatives like the White Box funds and Marketfield be the next funds to dump when things aren't playing out like we thought? Probably.
I like what Hank said about sticking with tried and true funds like PRWCX. Nothing flashy or gimmicky, just steady-eddie over the test of time.
All that said, I'm still searching. At least with a small percentage of my portfolio. I still own RGHVX, will I never learn... :)

Reply to @andrei: FPACX has been my largest holding for quite a few years now. So I'd say that fund is a best option. But I like to hold 40% of my portfolio in balanced, allocation or alternative type funds with managers having good long term records and a lot of flexibility. Not sure all those descriptions, allocation/alternative/balanced, don't over-lap in many ways.
Within that 40% I like to hold 4-5 funds. My 3 main-stays in that group have been FPACX, MACSX and FAAFX. Two other funds in that group have been performing poorly, mainly because they are bond oriented - PAUIX and PGDPX. I've been moving out of those 2 funds because I don't see manager's flexibility to move out of bonds. I've been putting that money in RGHVX and adding to FPACX.
I actually wanted to add the Marketfield fund or one of the Whitebox funds, but they are not available to me. I liked what I read about RGHVX from David's commentary and the funds web site. So far so good.

Few Alt funds, that I watch, that were up today:
WBLSX +0.19%
WBMAX +0.48%
BPLEX +0.60%
RGHVX +0.24%
ASANX +0.20%
AQRNX +0.09%

Reply to @Investor: I didn't even click on the link. Just another gimmick like risk parity funds and other alternatives. I am glad someone ( I shoudn't be surprised it was you) had the knowledge to report on survivorship bias. That bias is even worse in commodity (futures) funds.
Edit: RGHVX, I must admit, not bad returns for a long/short equity fund

Reply to @MikeM:
RGHVX looks interesting, but is it the best option? Since inception, almost 15 years ago, it delivered less than OAKBX and FPACX with greater volatility.