David Sherman of Cohanzick, manager of RiverPark Short-Term High Yield (RPHYX), is set to manage a new fund. By all appearances it will be much more aggressive and flexible that RPHYX but will still be an exceptionally cautious take on risky asset classes.
Per the SEC filing: "RiverPark Strategic Income seeks high current income and capital appreciation consistent with the preservation of capital by investing in both investment grade and non-investment grade debt, preferred stock, convertible bonds, bank loans, high yield bonds and income producing equities." But the bonds must be Money-Good; that is, in the worst case, they can be held to maturity and the issuer will be in a position to redeem them at full value. Up to 35% of the fund might be foreign fixed-income and up to 35% might be dividend paying equities. $1000 minimum, 1.25% opening e.r.

Interesting interview. Positions himself against the “brilliant pessimists” whose clients have now missed four years of phenomenal gains. Their thesis is correct (as were most of the tech investor theses in 1999) but optimism has been in such short supply that it became valuable. Pretty much the top performing LCB fund around. Launched in 2007. Assets have grown from $50M - $350M in the last year; as a result, the e.r. is getting cut in the near future. He argues that the fund universe is 35% passive, 5% active and 60% overly active. Trading costs associated with overactivity costs the average fund 100-200 bps. So he tries to find companies so excellent that he can hold them from between 10 years and forever. Expects a commodities implosion (soon).

3.3% expense ratio on the Versus Capital fund. Nice!
BWG

Hi, guys.
The Morningstar Investment Conference adventure begins today, the slowest day of the three. On tap:
interview with Bill Smead, manager of Smead Value (SMLVX), mostly domestic, mostly large cap, 27 stocks, low turnover, five-star, top 2% returns. A bit pricey (1.4%) given assets ($300M), but we'll talk.
lunch at Northern Trust, presentations on efficient investing in emerging and frontier markets
Bill Nygren and Steven Wymer presenting on active share and active management
interview with Jake Mortell about Versus Capital, an interval fund that invests solely in private real estate. There's pretty good evidence that securitized real estate (REITs, for example) lose most of their diversification value and become less attractive on a risk/return basis than private r.e. Looks interesting, looks pricey.
Thought you'd like to know. I'll try to post a days end folow-up.
David

Like Hank says the EM space is where the growth is.Keep re-investing those monthly divs and through another market cycle you will be rewarded!
From M* Quick Rank
Highest Returning EM Bond Funds
Ticker Name 10 Year
total return
GMCDX GMO Emerging Country Debt III 12.17
LSHIX Loomis Sayles Instl High Income 11.22
AGDAX AllianceBern High Income A 10.64
TGEIX TCW Emerging Markets Income I 10.52
DPHYX Delaware Pooled High-Yield Bond 10.31
FNMIX Fidelity New Markets Income 9.72
SITEX SEI Instl Intl Tr Emerging Markets Dbt A 9.67
FAGIX Fidelity Capital & Income 9.62
MEDAX MFS Emerging Markets Debt A 9.49
CPHYX Principal High Yield A 9.42
FAEMX Fidelity Advisor Emerging Markets Inc T 9.39
FAHDX Fidelity Advisor High Income Advantage A 9.30
FHYTX Federated High Yield Trust Service 9.26
PREMX T. Rowe Price Emerging Markets Bond 9.26

Hi Guys,
The decision with respect to either a Roth IRA or a Traditional IRA or a conversion is not simple; it is not a no-brainer. Like most investment choices and options, a final decision depends.
The Roth IRA decision is not easy since it is multidimensional with several forecasts as required input. One size definitely does not fit all.
It depends on several factors. I faced this challenge a number of years ago when the Roth option was originally introduced by our government. I did a boatload of calculations that eventually included many random Monte Carlo simulations. I finally decided on a mixed approach since many of the influencing parameters are unknown.
I did not keep a copy of my studies, but I do recall some of the pertinent outcomes.
A Roth only works if the expected taxes at planned withdrawal are below the current tax schedule. A Roth is not attractive if the monies to pay the current tax bill for the conversion or purchase must be extracted from what would be used to buy the Roth itself. It is these extra, auxiliary funds that make the decision in favor of the Roth attractive.
Further, the time scale before planned withdrawals and the expected rate of return for the IRA also enter the decision equation. A Roth is more attractive as the time horizon expands, making it more useful for estate planning objectives. If the anticipated IRA portfolio annual payoff is low, it takes a longer time to recover the initial tax bite for purchasing a Roth rather than a Traditional IRA. Low future portfolio return rates penalize the Roth option.
I’m surely not a tax wizard and the research that I did on this topic is dated. I’m not so sure of the details. So I recommend consulting a tax specialist before making a major commitment.
Here is a reference to a technical study that addresses some of these issues. It documents required future get-even tax rates as a function of time scale and portfolio investment return rates. The paper’s tables help to provide guidance towards any IRA decision:
http://www.academyfinancial.org/10Conference/10Proceedings/(3A)%20Krishnan.pdf
This paper by professor V. S. Krishnan titled “Roth IRA Conversion and Estate Planning” presents some tradeoff studies that illustrate the interactive complexity of time scale and portfolio return when making an option selection. The tables that he includes at the conclusion of the paper show the trendlines.
Also, all the major mutual fund houses provide informative articles on this subject matter. Here is one sample from T. Rowe Price:
http://individual.troweprice.com/public/Retail/Retirement/IRA/Traditional-vs.-Roth
A final decision does demand some committed time to explore the wide ranging likely future outcomes. Roth/Traditional IRA decisions are never easy given future investment return and tax uncertainties.
The Roth gains much of its superiority from its estate planning, pass-through features. Since that is the stated goal of the original post, the Roth IRA option seems to be in a wheelhouse position for Pangolin’s situation assuming that current tax consequences from any conversion can be conveniently handled from other than those funds dedicated to the IRA itself.
Of course, all this discussion assumes that at some juncture, the 401K pot will be converted to IRA status.
I hope this is of some service to you.
Best Wishes.

Reply to @msf: Your analysis (last paragraph) is on-target. The shakiness you reference finally caught up with us in '08. The first publicly acknowledged company bailout of a sick MM fund I recall was Strong's in '97. The Merc Capital mess made front pages and there was no way Strong could keep their involvement quiet. However, over the years, several other investment companies similarly afflicted apparently succeeded in keeping their interventions largely out of the public eye.
'97 article on Strong's intervention: http://articles.chicagotribune.com/1997-02-26/business/9702260088_1_money-funds-strong-capital-management-fund-s-portfolio

Dividend and Capital Gains Distributions PTTRX
05/31/2013 11.07 0.0267
04/30/2013 11.34 0.0322
03/28/2013 11.24 0.0272

Reply to @hank:
I've started reading through the 698 page proposal. Interesting, and moderately light reading (at least it's not like reading regulations - much more direct, narrative style).
A couple of interesting items in the first 50 pages (as far as I've gotten):
- the number of times that fund families had to step in (or request "no action" assurance from the SEC) was far from zero. See Table 1 on pp. 23-24 in the proposal. Four funds in 1989, 21 in 1990, 10 in 1991, 83 in 1994 (half due to Orange County's bankruptcy), 3 in 1997, 25 in 1999, 6 in 2001, 51 in 2007, 109 in 2008 (no surprise there), and 3 in each of 2010 and 2011.
This table reflects only the number of funds reacting to a few specific events (such as Orange County's bankruptcy); it's not the total for each year. That's clear because the BusinessWeek article you cited says there were 30 funds needing help in 1997, but the SEC table shows only 3 (due to Mercury Finance defaulting). I take all these figures as showing how shaky the whole industry was and is.
- when the NAV of a fund drops below $1 (e.g. to $0.9975, which is still reported as $1), there's very little the fund itself can do to bring the NAV back up. For example, it cannot use received interest to rebuild capital, since the fund must distribute substantially all its earnings. My inference is that any permanent loss of value (e.g. due to a default) most likely has to be made up by the fund family. The problem Reserve Fund had was that the family didn't have the resources to prop up its Primary Fund (and also that 1.2% of the fund was invested in Lehman Bros).

We all know there are some folks in the Fed and they have been consistently against QE etc. In each meeting, they dissent the decision. There are not enough of them to change the policy or they are not voting members at this time. So, while the press gives a lot of coverage of these folks, the policy still firmly remains in place. I see it is natural that these things are discussed in FOMC and the meeting minutes reflect that. I would be worried if these guys come together and not discuss all aspects of the policy.
At some point, the bond buying will indeed taper. Fed has given the conditions for that several times and I see no change on that. Inflation rise above 2-2.5% range, or unemployment below 6.5%. It is solid guidance. The two actually are related. It cannot get simpler than that.
Based on projection We are unlikely to get to 6.5% unemployment until middle of 2014. Maybe even 2014. While private sector is adding jobs (good), the government is still shedding jobs creating a headwind there. In 2000 recession we came out of the recession because government (federal, state, local) has been adding jobs significantly. Not this time around. Local and State governments have stabilized but now with sequester we have federal government going negative growth again. It is also holding companies that does business with government as well. A lot of defense companies for example have laid of or put an hold on employment growth as their projects are slowed down or put on hold. People have this simplistic vision government and private sectors are separate and government is just paper pushers. Well, government is the buyer of services and goods of private sector businesses. The government employees themselves use a lot of private sector services as well. I guess you get the idea. If you shrink government sector your private sectors have to shrink somewhat or slow down. This is what is happening in the US today. Anyway, going back to 6.5%, we are not going to have much improvement there until mid-2014 or maybe even towards end of 2014. And the dysfunction of congress is unlikely to change so Fed policy that tries to compensate that is unlikely to change
Inflation, by the Fed measure which is the one for the basis of decision, is also significantly below and is unlikely to pick up significantly with Europe still struggling, our own misguided fiscal headwinds via sequester + tax hikes. There are two basic sources inflation. A strong labor market demanding higher wages. The wage growth has been stagnant as unemployment stayed high. Besides, we do not have strong unions anymore. On the resource basis inflation is also slow as China is in big trouble. If you have been looking at the commodities and futures, we have excess capacity in many ways. Oil has also declined as China output has been slow and Europe still in crisis has not been consuming as much. Add in the increasing shale gas and oil, oil prices which is one of the major price components of goods sold in US has declined. These are all keeping the inflation in check. The only big gainers in inflation are education costs (some families) and medical costs (predominately older families). They have been consistently high. Housing has been on the mend so housing inflation has picked up recently a bit. Because of under-building in some markets in recent years, now we have housing shortage. Overall, the inflation is unlikely to pick up and get out of range. In fact, I think unemployment and inflation targets of the Fed are likely to be hit around the same time.
So, what happens if we taper. If it comes with growing economic prospects, the effects will be less. Bonds may lose but equities might be on better footing on growth prospects. If it is coming due to some misguided policy change at an unfortunate time (like Europe's insistence of keeping interest rates high while fires were burning), it will cause sell-off in equity and bond markets. In a sell of, it is possible that Treasuries might assume its long tradition of safe haven asset. But corporate bonds are positively correlated with equities and they will decline as well (perhaps not as much but they do not gain typically as much either so losses will be high proportionally with gains of the asset class).
But as I said, the policy is not changing. The market jitters might be a typical summer swoon and perhaps an opportunity for buying. In this sense, we are following typical yearly pattern.

Reply to @ron:
Hi ron,
I will soon be joining the ranks of the retired and I have already started celebrating my upcoing retirement. The markets concern me ... esecially, the fixed income area. Bonds unlike stocks are fixed in what they give you. However, good companies should grow thier revenue and earnings over time increasing the dividends that some of them pay out to their share holders. My portfolio, has some good dividend equity holdings that were inherited from my great grandfather, my grandfather and my father.
Years ago, the family decided to sell off farm land and move from growing cash crops from the soil to havesting cash dividends from what some companies pay out. Although I recently reduced some of my fixed income and equity holdings I am still with my great grandfaters master plan. "Let others work for you and collect the dividends through your capital investments." Smart man. And, his great grandson thanks him.
My thoughts ... Think trough this and play the hand as it is delt. Sometimes this is called folding the hand especially when the cards are against you. I think it prudent to respect, value and protect your principal.
My best,
Skeeter

Hi again MJG. Thanks for kind words of encouragement on new rating system.
I do indeed have Mr. Martin's book, entitled "The Investor's Guide to Fidelity Funds - Winning Strategies for Mutual Fund Investing," where the retracement index (aka Ulcer Index) is introduced. It's a good book with several topics covered, including other risk measures, like beta and its relationship to theoretical Capital Asset Pricing Model (CAPM), which Prof Sharpe helped develop.
I thought it was interesting that when the book was first published in 1989, there was of course no mention of value or cap size parameters now recognized in the Fama/French three factor model. Think some day a momentum factor will be added? I believe Peter Martin and his co-author Byron McCann were both students of Prof Sharpe at Stanford, but have yet to confirm.
While the new return ratings key on Martin because of its sensitivity to both excess return and draw down, the risk ratings utilize three measures - standard deviation, downside, and Ulcer, which are the denominators of Sharpe, Sortino, and Martin, respectively.
Numerous risk and risk adjusted return measures have been developed, but Sharpe and Sortino certainly seem to be most popular, like you note. M* publishes these two along with beta, alpha, r-squared (correlation), Treynor, upside/down side capture. M* still has a place for something called "Bear Market Percentile Rank," which appeals to me, but its reference is so specific (the 5 year window) and is published so infrequently that I've stopped relying on it.
Other measures include Modigliani, Calmar, Sterling, and maximum draw down (MAXDD), which are tougher to find, like Ulcer and Martin. Maybe it's just because some of them are harder to calculate? I believe that the draw down measures are becoming more common in today's trading software programs.
After 2008, I think we all got more sensitive to draw down as a measure, but it's still not often published. For example, M* shows both gold rated funds DODGX and LLSCX performance at about -43% in 2008 or 6% below market. But they actually drew down nearly 60% by Feb 2009. MAXDD is included in the new MFO ratings tabulation, along with the Ulcer and Martin measures of draw down extent and duration. I suppose that given the choice, most folks would want to achieve comparable absolute return while experiencing less draw down. (But I'm heavy FAAFX, so I recuse myself from consideration.)
All these measures are so-called ex post...historical, after the fact. Beta has been shown to have tendency to persistent, but certainly alpha does not. I believe CAPM predicts that those investing in riskier funds can expect higher returns over time. But has the debate been settled on whether there is an "optimal" risk level for a portfolio?
I personally think Ulcer Index and attendant Martin Ratio are best measures available for identifying funds that have delivered superior returns while avoiding draw downs. In addition to the previous references posted, here are a couple supporting opinions: The Ulcer Index and The Ulcer Index: A better measure of risk. (I tried searching for contradictory opinions but came up empty.)
I do find it gratifying that the new system highlights top notch 20 year funds, like VWINX, PRWCX, VWELX, OAKIX, SEQUX, YACKX, FMILX, MERDX, BCSIX as well as perhaps lesser known GLRBX, MAPOX, BHBFX, GASFX. In the forthcoming 10, 5, and 3 years ratings, you will find WRHIX, TGLMX, ARTKX, SGOVX, VILLX, PAAIX, TBGVX, PONAX, NSTLX, WBALX, WSCVX, MFLDX, PVFIX, COBYX, AKRIX, AQMIX, VVPSX among the stand-outs.
Will their performance persist? So far so good, but your guess is probably better than mine regarding future. I do know that if Ulcer Index is creeping up on a fund I own, I'd want to know, especially if I expected it to maintain good down side behavior.
Our hope was that the MFO community would find the new ratings both unique and helpful, like the legacy Three Alarm system. The system is not all encompassing, as it emphasizes certain measures and is based strictly on historical numerical returns. No other due diligence performed. No assessment of fund shop, manager's strategy, style drift, stewardship, etc. Those assessments can be found in David's many profiles and commentaries, on the active MFO board, and elsewhere (like M* with premium membership).
Sorry for delayed response but have been a little busy lately and wanted to do the homework your posts often demand...to my betterment usually =).
Hope all is well and thanks again.

The great E-ticket ride: is it over? This years gains slipping like sand through our fingers. Without (continued) gov't intervention, looks like Mr. Market will retreat into his den.
http://finance.yahoo.com/news/fed-stimulus-jitters-drive-asian-034401998.html

I used to invest a lot a few years ago till things went pear shaped and had to get out. I am trying to figure out if its worth investing when we will get the bejezzus taxed out of our gains, also trying to find a good all around fund for LNG or oil. Thanks Jim

Reply to @MarkM: Going all cash if he is not sanguine in the market would not get him many investors. Also buying and selling generates capital gains.
But now I don't know why one needs Market Neutral funds. Long/Short I get. Market neutral I don't.
I really don't thing we have a good "diversifier" other than buy a bear fund. Which again would make us Market Neutral !!!
Your post is now making me think. I considered TFSHX and HSGFX to be my "diversifiers".

When you say yields, you are saying dividends. In taxable account you want capital appreciation more than dividends. In retirement accounts you are right I think.
Also NAVs are adjusted on their dividends. Did you get dividend adjusted NAV from Yahoo. If you got raw NAV then with every distribution - cap gains and dividends - NAV drop will be more pronounced. A lot of times on yahoo, the charts are also not adjusted for distributions so you see unnecessary spikes downward for various funds.
So not saying you numbers are wrong, but they may not be 100% accurate.

http://www.sec.gov/Archives/edgar/data/924727/000110465913046292/a13-12957_1497.htm
FPA FUNDS TRUST’S FPA CRESCENT FUND
SUPPLEMENT DATED JUNE 2, 2013, TO PROSPECTUS DATED APRIL 30, 2013
Effective June 2, 2013, Mark Landecker and Brian A. Selmo have been appointed Portfolio Managers of FPA Crescent Fund (the “Fund”).
Effective June 2, 2013, the Fund’s Prospectus will be revised as described below.
The Section in the Fund’s Prospectus entitled “Portfolio Manager” is deleted and replaced as follows:
Portfolio Managers. Steven T. Romick, Mark Landecker and Brian A. Selmo are primarily responsible for the day-to-day management of the Fund’s portfolio. Mr. Romick has been a portfolio manager since the inception of the Fund on June 2, 1993. Mark Landecker and Brian A. Selmo have been portfolio managers of the Fund since June 2, 2013.
The Section in the summary portion of the Fund’s Prospectus entitled “Portfolio Manager” under the Section “MANAGEMENT AND ORGANIZATION” is deleted and replaced as follows:
Portfolio Managers
Steven T. Romick, Mark Landecker and Brian A. Selmo are primarily responsible for the day-to-day management of the Fund’s portfolio. Mr. Romick has been a portfolio manager since the inception of the Fund on June 2, 1993. He has also been the Trustee, President and Chief Investment Officer of the Fund for more than the past five years and a Managing Partner of the Adviser since January 2010. Mr. Romick has also been a Partner of the Adviser for more than the past five years.
Mark Landecker has been a portfolio manager of the Fund since June 2, 2013. Mr. Landecker is currently a Managing Director of the Adviser and was a Vice President of the Adviser from 2009 to 2012. Prior to joining the Adviser, he was a portfolio manager at Kinney Asset Management from 2005 to 2008.
Brian A. Selmo has been a portfolio manager of the Fund since June 2, 2013. Mr. Selmo is currently a Managing Director of the Adviser and was a Vice President of the Adviser from 2008 to 2012. Prior to joining the Adviser, he was the Founder and Managing Member of Eagle Lake Capital, LLC from 2006 to 2008.
The SAI provides additional information about the Portfolio Managers’ compensation, other accounts managed, and ownership of shares of the Fund.

Reply to @CathyG: Good question. I do not have a crystal ball so take my evaluation with a grain of salt.
I personally think the returns for bonds is likely to be limited going on but again I did not expect bonds to return as much as it did in 2012 either. Now the yields are even lower, there is very very limited potential for capital appreciation. Even bond heavy fund houses are trying to establish other funds for the eventuality that one day bonds will lose money and investors will head for the exits. Gundluch started some equity funds. Gross recently tweeted that bull market in bonds ended April 30 and PIMCO has other funds to offer to clients.
We had a bond selloff because Fed participants just discussed the conditions of tapering the bond purchases. I do not expect any major policy change for the rest of 2013 while inflation is much below the Fed target and unemployment is higher than Fed target and there is fiscal drag thanks to congress which is not rowing in the same direction. A few days ago I posted projections of unemployment rate and it is pointing to sometime in 2014. This might be the usual summer volatility after a good run YTD so it may settle down.
If you are uncomfortable by these movements than move to shorter duration bonds or cash but you will have to accept lower income.
Also, take a look at the following blog. It might help form your opinion:
http://oldprof.typepad.com/a_dash_of_insight/2013/06/weighing-the-week-ahead-will-the-interest-rate-surge-continue.html

http://news.morningstar.com/articlenet/article.aspx?id=598449
* Lower Fees for 4 Vanguard Mutual Funds, 1 ETF
* Oppenheimer Manager Departure
* Wasatch Implements More Restrictions on Emerging-Markets Small-Cap Fund
* Templeton Frontier Markets Closes to New Investors
* Fund Manager Changes at Bridgeway
* Former Janus Portfolio Managers Resurface at Denver Hedge Fund
* Fidelity Selling Its BostonCoach Limo Company
* Fairholme Capital Takes $500M Preferred Stake in Fannie, Freddie

http://www.sec.gov/Archives/edgar/data/923184/000114420413032182/v346546_497.htm (individual)
http://www.sec.gov/Archives/edgar/data/923184/000114420413032181/v346547_497.htm (institutional)
497 1 v346546_497.htm 497
SUPPLEMENT DATED MAY 30, 2013
TO THE PROSPECTUS OF MATTHEWS ASIA FUNDS
DATED APRIL 30, 2013
For all existing and prospective shareholders of Matthews Asia Dividend Fund - Investor Class (MAPIX)
Effective at market close on June 14, 2013, the Matthews Asia Dividend Fund (the “Asia Dividend Fund”) will be closed to most new investors. The Asia Dividend Fund will continue to accept investments from existing shareholders. However, once a shareholder closes an account, additional investments in the Asia Dividend Fund will not be accepted from that shareholder.
The following section entitled “Who Can Invest in a Closed Fund?” is hereby added to page 74 of the prospectus immediately before the section entitled “Exchanging Shares”:
Who Can Invest in a Closed Fund?
The Asia Dividend Fund has limited sales of its shares after June 14, 2013 because Matthews and the Trustees believe continued unlimited sales may adversely affect the Asia Dividend Fund’s ability to achieve its investment objective.
If you were a shareholder of the Asia Dividend Fund when it closed and your account remains open, you may make additional investments in the Asia Dividend Fund, reinvest any dividends or capital gains distributions in that account or open additional accounts in the Asia Dividend Fund under the same primary Social Security Number. To establish a new account in the Asia Dividend Fund, you must provide written proof of your existing account (e.g., a copy of the account statement) to the Asia Dividend Fund. A request to open a new account in the Asia Dividend Fund will not be deemed to be “in good order” until you provide sufficient written proof of existing ownership of the Asia Dividend Fund to the Asia Dividend Fund or its representative.
In addition, the following categories of investors may continue to invest in the Asia Dividend Fund:
• Financial advisors and discretionary programs with existing clients in the Asia Dividend Fund
• Retirement plans or platforms with participants that currently invest in the Asia Dividend Fund
• Model-based programs with existing accounts in the Asia Dividend Fund
• Trustees, officers and employees of the Funds and Matthews, and their family members
Please note that some intermediaries may not be able to operationally accommodate additional investments in a closed Fund. The Board of Trustees reserves the right to close a Fund to new investments at any time (including further restrictions on one or more of the above categories of investors) or to re-open a closed Fund to all investors at any future date. If you have any questions about whether you are able to purchase shares of a closed Fund, please call 800-789-ASIA [2742].