"if I buy a US Treasury Bond Index fund...", the fund is marked to market every day and you and other investors can redeem at each day's NAV, which means you can loose a small (or large) fortune should interest rates rise. If a fund is called something like Long Duration Treasury Fund, how nimble do you think the manager could be? He can't buy equities or high yield even if he sees the interest rate freight train coming. the 2% coupons will not protect against a huge loss of capital. And don't forget that as soon as it starts plunging, the investors will want their money back, which means, even if you're very patient and prudent, the fund manager will be selling long bonds before maturity at firesale prices to pay other investors and the fund's value will go down. Never confuse a bond with a bond fund.

In my mind it all depends on your penchant for holding Japanese equities. MAPIX is there with +25% Japan stocks presumably for the dividends they generate in tune with the fund being called the Asian dividend fund. MASCX, on the other hand, eschews Japan for the most part and doesn't appear to miss them all that much. I am hard pressed to pound the table for one over the other outside of this. I bought and still hold MAPIX simply because at inception I thought they were getting Japanese stocks at bargain prices and I was looking for a little capital appreciation to go along with a hopefully rising dividend. I haven't really gotten either but I can't say that I am disappointed all that much.
If I had an over supply of investment funds I might own both just to give me a sense of being diversified even though I think that's mostly an illusion in my own mind. Both funds have just been solid, albeit unspectacular, offerings which suits me just fine.

The high yield bond sector bucked the trend on Monday with the HY sector moving in the opposite direction of U.S. equities.
HYG = +.51%
JNK = +.38%
These two were likely candidates for hedge funds and other large trading groups. Profit taking for this daily blip will likely show its face soon enough.
Some of this move spilled into the active managed HY bond funds where gains were in the +.11through +.15 ranges for the more plain jane HY bond funds.
A day, so not a trend; but an interesting situation for those who monitor this area.
Regards,
Catch

Reply to @AndyJ: you're right about the cash driving down the yield, but it is also a function of capital appreciation. if you buy a fund investing in bonds paying (i am simplifying here) fixed coupons at inception, let's say $100 monthly, and the fund's assets appreciate, but the underlying bonds still pay the same $100 monthly, then your yield goes down to accommodate the price appreciation. that's why Total Return is what matters in investing -- capital appreciation + interest (or dividend, for equities). Many bond funds had huge capital appreciation, but there is a limit to it, that's why going forward all you can get is current yield. (i am optimistically rejecting a huge spike in interest rate scenario and predicting continuous muddle-thru.)

Hi bee,

fixed-income investors are going to likely earn their coupon with less and less prospect for capital appreciation

An aside, which has been discussed here; are the millions of others who are not investors, but those perhaps ages 65-100 years who will travel in few other investment areas other than CD's at their local bank or credit union. These folks are really in the money grinder, as the paltry rates of return, which in most cases will also be taxed by federal, state and/or local governments will also be offset by inflation creep. A most sad state of affairs for too many good folks.
Take care,
Catch

Hi Ted,
Many of us here are with you on this manager and all of his fund's iterations (PIMIX, PONAX, PONCX, PONDX, PONPX, PONRX and PDI (CEF version)).
I believe PIMIX is available through Vanguard brokerage:
click here
His ending comment is worth noting:
"When you look at the trajectory of yields of the past few years, we are certainly at a point now where we are not at the destination, but we are pretty close to the destination," Ivascyn says. "Increasingly, fixed-income investors are going to likely earn their coupon with less and less prospect for capital appreciation." That means he'll have to sift very carefully through the opportunities.

http://www.sec.gov/Archives/edgar/data/1342947/000089109212007111/e50948_497.htm
The following information supplements, and to the extent inconsistent therewith, supersedes, certain information in the Prospectus. Defined terms not otherwise defined in this supplement have the same meaning as set forth in the Prospectus.
Effective close of business on November 30, 2012, and subject to certain exceptions, BBH Core Select (the “Fund”) is closed to new investors. An existing investor that has been a shareholder in the Fund continuously since November 30, 2012, either directly or as the beneficial owner of shares held in another account (an “Existing Shareholder”), may make additional investments in the Fund and reinvest dividends and capital gain distributions. In addition, an employee benefit plan that is an Existing Shareholder may continue to buy shares in the ordinary course of the plan’s operations, even for new plan participants. The Fund’s closure to new investors does not restrict any shareholders from redeeming shares of the Fund.
In addition to Existing Shareholders, the Fund will remain open to:
• shareholders of any of the funds in the BBH Trust that have at the time of investment in the Fund a combined balance of $100,000 in any of the funds in the BBH Trust (in their own name or as beneficial owner of shares held in someone else’s name);
• shareholders that received shares of the Fund after November 30, 2012, as a gift or inheritance from an
Existing Shareholder of the Fund;
• an account for an employee benefit plan sponsored by an organization that is an Existing Shareholder or an affiliated organization;
• an employee benefit plan or other type of corporate or charitable trust account sponsored by or affiliated with an organization that also sponsors or is affiliated with (or is related to an organization that sponsors or is affiliated with) another employee benefit plan or corporate or charitable trust account that is an Existing Shareholder of the Fund;
• a director or officer of the BBH Trust, or a partner or employee of BBH or its affiliates, or a member of the immediate family of any of those persons;
• a client of BBH or entity that otherwise has an existing business relationship with BBH, provided that, in the judgment of BBH, the proposed investment in the Fund would not adversely affect BBH’s ability to manage the Fund effectively;
• a client of a financial advisor or a financial planner, or an affiliate of such financial advisor or financial planner, that has been notified by BBH that its clients may invest in the Fund;
• an investor purchasing Fund shares through a sponsored fee-based program pursuant to an agreement with BBH, BBH Trust or its distributor, provided that the sponsor has been specifically notified in writing that shares may continue to be offered through such program;
• a client of an institutional consultant, provided that BBH has notified the consultant in writing that the client may invest in the Fund.
The Fund will accept new accounts for an employee benefit plan if the employee benefit plan is sponsored by an organization that also sponsors (or is affiliated with a sponsor of) another plan that is an Existing Shareholder. In addition, the Fund may accept new accounts for an employee benefit plan if the plan is a client of an institutional consultant or a Registered Investment Advisor that has an existing business relationship with BBH or BBH Trust, provided that BBH or BBH Trust has notified that consultant or Registered Investment Advisor in writing that the plan may invest in the Fund.
Investors may be asked to verify that they meet one of the exceptions above prior to opening a new account in the Fund. The Fund may permit you to open a new account if the Fund reasonably believes that you are eligible. The Fund also may decline to permit you to open a new account if the Fund believes that doing so would be in the best interests of the Fund and its shareholders, even if you would be eligible to open a new account under these exceptions.
The Fund’s ability to enforce the closure of the Fund and the exceptions listed above with respect to accounts held by financial intermediaries may vary depending on the systems capabilities of those intermediaries, applicable contractual and legal restrictions and cooperation of those intermediaries.
To ask questions about your ability to invest in the Fund, please call BBH at 1-800-625-5759.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.

Reply to @Investor: nope. pure tax-related decisions. taking long-term gains this year is almost done. much of re-investment is on hold until clarity in further tax developments.

Reply to @MaxBialystock: Hey Max,
Both his intermediate bond funds are set up on a barbell; the T's in Core FI and the gov't mortgages in Total Return are the risk-off counterweights to the riskier assets in the funds ... mainly EM bonds in the former and non-agency mortgages in the latter. If the T's in Core FI head into a rough patch, for example, the EMs will appreciate, ~ offsetting the capital loss in the former.
Both have very low durations for a core bond fund. The way they're positioned, there isn't much interest rate risk in either fund. Check out the durations on the DBL web site, or on M*. JG and team are good at this.
You probably already know this, but in case not, there's another web cast coming up on Core and TR on Dec.11.
Edit:in the article Scott linked, the counterweight strategy I mentioned is explained for DBLTX under the heading "Mortgage Holdings."

Reply to @bee: It temporarily could create some volatility but they will be buying back again right away. It is not like selling and going to cash. It is realizing gains now and maintain the same asset exposure at a higher cost basis to pay less future taxes.

IMHO, should be just the opposite.
The idea is to recognize cap gains this year, rather than defer them into future years. That is, if one purchased a share at $10 and it is now worth $12, one can sell/rebuy - recognize the gain now (pay 15% of $2), and reset the cost basis to $12. Thus, the future gain (taxed at as much as 23.8%) is reduced by $2.
You'll notice that I said nothing about distributions. If you're applying this tactic (and I have done so in anticipation of large distributions), you sell on the record date (so that you don't get the dividend), and buy back the next date. I'll use some numbers below to illustrate why, but the idea is that by selling before distribution, you pay 15% on your gain; if you sell after distribution, your gains are reduced by the amount of the distribution, but that distribution might be taxed at more than 15%.
Here's the example - same hypothesis - $10 share, now worth $12, and we'll throw in a $2 distribution.
Sell (and rebuy) after the distribution, and your cap gain is $0 (after a $2 distribution, the $12 share drops to $10 - your original cost). But you pay taxes on that distribution - at best 15% of $2, but possibly more.
Sell before the distribution and rebuy afterward: your cap gain is $2, your tax is 15% of $2, and you don't pay any tax on the distributions. So you're paying no more, and possibly less, than if you'd sold after the distribution.
As I said, I've used this tactic - for example, when I have shares that have not appreciated, I can skirt the distribution by selling before the distribution and buying back after. But that only works with funds that let you buy back shares immediately. Selected Shares has a policy of protecting shareholders, by not allowing this. Not only because of the usual reason (high turnover costing long term investors), but because this tactic harms investors who don't use it.
What happens is that with lots of people selling (albeit for 1 day), the distributions are divided among fewer shares. So those people just holding tight get a disproportionately high distribution. It's as though they bought a dividend just by standing pat. Not fair to them.

From your link:
" Selected American Shares (SLASX) will waive their normal 30-day trading restriction through Dec. 31. According to parent company Davis Selected Advisers, outside shareholders requested that they be allowed to realize gains before a potential capital gains tax hike in 2013."
Does anyone have statistics on mutual fund redemptions based on this dynamic? I would assume this would happen just after the fund distributes these gains...varies by mutual fund...but happening soon.

It's not just asking why hasn't the category done well (it's not as if there's many successful long/short hedge funds - Third Point, Greenlight and many others - calling it a failed strategy, as if it's never been successful, is absurd), but trying to get an understanding of what has broadly caused the broad mutual fund l/s category not to fare well - managerial fault? Taking the long/short definition too strictly and not adjusting in the face of changing market environment (in other words, I'm not going to dial down the short side because I'm a long/short fund and I always have to have distinct l/s sides? The restrictions on mutual funds vs hedge funds?
Here's a big question, and this isn't intended to offend the manager interviewed: why would the big talents want to run a l/s mutual fund when they can get 2 and 20 running a l/s hedge fund? In other words, has the category not fared well as a whole because it's not attracting talent, who are going to hedge funds instead? A number of high-profile mutual fund managers have gone that way in the last year or two (Rao, Iben, Decker, there's most likely others I'm not remembering). I don't know the current status of Heebner's hedge fund (Wayfarer Capital), but maybe that's proven to have gotten more focus than, well, CGM Focus (which now has something like a tenth of the assets it did at its peak.)
This could also be rephrased to the manager interviewed: why run a mutual fund when a hedge fund is potentially much more lucrative? A hedge fund company can offer mutual funds (Whitebox, for example) in order to increase AUM and find new business, but in terms of hedge fund managers leaving entirely to run mutual funds or mutual fund managers leaving to run hedge funds, there's been more of the latter than the former in recent years.

Howdy scott,
You noted:

I think catch is well aware that fixed income performance will not go on like this (although timing the turn is not possible), but I think what some on the board are curious about is what does catch view as the general plan in terms of indicators to look at that to start moving out of fixed income, etc.?

>>>>> A proper question, and one that we all ask ourselves; whether equity, bond or any other sector holdings. I suppose, among other word choices, too; is that I look for "flatlining" of funds we hold, as well as "flatlining" in areas that affect various types of bonds. A prime example at this time is our holding of FBNDX. The 30 day S.E.C. yield is now at 1.6%. This is not much of a yield to "write home about" and won't buy the groceries going forward, eh? 'Course the yield is so low because of the buyers who continue to move into bond sectors. But, we all ask the question of our holdings; "What are ya do'in for me today?" I watch our bond funds to look for a trend, not unlike with an equity holding or other. FBNDX has a 1 month return of +.28% , a 3 month return of +1.4% and a YTD of 6.2%. Our overall portfolio is about +11.5% for the year, or about 1% a month on average. Obviously, FBNDX is not pulling its weigh at this time and has reduced the average against higher returns from our other holdings. This does not imply that other bond funds similar to FBNDX have not done better, and perhaps we just don't have the best of the breed with this holding. The fund is on the watch list for a rotation; but we will likely wait to find what happens in the next few months from D.C.land.
Fixed income, as a name; well, it is what has been used for many years, but, as we know, is a very broad area of bonds and there is little fixed with fixed income. Nearly fixed income for me would be a CD, money market, stable value holdings, annuity or similar product rate.
As has been noted in the weekly report, --- what we are watching to help understand the money flows: SHY, IEF, TLT, TIPZ, STPZ, LTPZ, LQD, EMB, HYG; we also note U.S. Treasury issues for price/yield. The slight problem with etf's and pricing moves is that this area is also the playground of the large money houses, including hedge funds; so, we can't always use these as a guage in a short time frame (one month or so). 'Course, many of these moving in the same direction and perhaps in concert with Treasury issues could have real meaning.
So, we watch these etf's and government pricing/yields to match against moves in the active managed bond funds. This area (managed funds) will likely be the most critical area for anyone holding bond funds and sells going forward.
"IF and when" one finds gov't. issue(s) yields moving up in a sustained fashion, which of course, means pricing is moving down and loss of value/capital appreciation; and also shows the same pattern within numerous bond sectors etf's and then moves into the same pattern with "some" managed bond funds; the sell signal for at least a portion of some funds would likely be triggered. At this point, one would need to know and ask why are yields trending and staying higher? Have the big trading houses and/or other very large players decided to take revenge on the U.S. Treasury by ganging up to "sell short" and make some quick cash?
Have other factors, both in the U.S. and globally changed enough to support higher yields; which should have already shown in the equity sectors in a rally mode?
The hugh amount of U.S. gov't. Treasury issues is a blessing and a curse of the times today. The dollar amounts held by other sovereign funds and/or governments is massive, which is a problem, too; but also tempers who, when and why as to a large and fast selling of these issues. China is likely not happy about many events and words thrown their way by the U.S.; but they are also reliant (at this time) upon the well being of our consumer economy. If China's Treasury holdings were to encounter a 10% loss within a 6 month period, I will suspect they will merely eat the loss; and move along with other business, but I am not convinced they would also start to unload their holdings. I can not currently find a recent report regarding more net purchases of U.S. Treasury issues in the past month from a mix of numerous other countries. The U.S. is still the best turd pile in the global pasture.
Noteable changes in bond returns will surely come some day.
1. watch Treasury pricing/yields; as well as bunds, gilts, Japanese bonds
2. watch reactions from 1 in bond eft's in all bond sectors
3. watch reactions from from 1 & 2 in active managed bond funds; and in particular, the more narrowly focused managed bond funds. (Most TIPs funds closely follow reactions in LTPZ, STPZ, TIPZ and TIP)
4. if one is watching 1, 2 & 3; perhaps 5 is already taking place
5. watch your favorite broad based equity eft's or fund's, as they may have already started a sustained upward move.
6. the tougher part is that there is going to be the right sectors of either bonds or equity that will do well, regardless of broad market trends. This is the really hard work portion; and in particular, that the market place is adjusted and perverted from central bank policies.
Not all bond funds, of course; are going to react in the same fashion in a rising rate environment and the picking and choosing is important with this.
Even with some ups and downs this year (not related to rising interest rates), FNMIX and other EM bond funds should do well for the entire year. FNMIX is currently at +17.6% YTD.
If my best friend stopped at the house today and stated that they didn't want any part of the equity markets, only bonds; I would instruct them to find the 10 best multi-sector bond funds over the past 5 years, look at 2008 returns and again at 2011 returns in particular, as well as the short time periods of the spring periods of 2010 and 2011. When their list of 10 was finished, they then place 10% into each fund. Perhaps to even convince them to do 10% each into 7 of the bond funds and 10% each to the best 3 large cap/blend equity funds. Sounds so simple, eh? :)
Lastly, is the risk and reward all of us have to measure against our own particular circumstances. When our house wins the "PowerBall" lotto, you will see a different actively managed portfolio from this desk.:)
Does what our house is trying to watch regarding bond funds make sense from the written words? Tis most difficult to get the full feeling and meaning with so very few words.
Take care,
Catch

FYI:
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2012/11/27/yes-you-may-owe-capital-gains-on-the-etf-you-still-own/tab/print/

Howdy Charles,
You noted:

" I know the composition is for "near retirement, capital preservation and to stay ahead of inflation creep," but surprised to see it virtually devoid of equity."

>>>>>The M* breakdown of the portfolio "thinks" the mix is about 1.9% equity. There are times, it appears, when M* can't quite determine a full accurate reading. We are okay with this and are pleased that we are able to have a view of the mix from their angle. We do have some equity slant from FAGIX, which at times may run as high as 20% equity holdings and currently reads about 8%. FRIFX is a conservative real estate fund and generally holds about a 40% equity/60% bond mix. LSBDX may hold up to about 20% equities. The HY bond funds are generally cousins to equity as related to market moves. For 2012, an ongoing review has shown our HY funds are currently close to returns with the S&P 500 indexes. This, of course, has varied throughout the year, too. As the markets have tossed and turned for 2012, one week will find support from the above funds noted; while another week finds support from the bond funds more tilted towards the investment grade sectors. A slow and sideways portfolio mix attempting to generate some continued capital appreciation from bond pricing, while throwing off yield; generally paid and reinvested monthly.

"Maybe it really is a reluctant bull, if not "A Bull Market In Fear."

>>>>> We were not a house of bonds prior to June, 2008; with only about 10% in bonds at that time. We have held up to 30% in equity at various times beginning in 2009 and through 2012. As to the "reluctant bull"; our portfolio feels like an investment orphan at times, as so much news is oriented towards owning equity to move forward with one's portfolio growth. We do not disagree with this notion; and must be aware of which equity sectors may benefit going forward, whether broad equity markets remain "sideways" or not. Not unlike bond sectors, there are always equity sectors that may remain more favorable than others for any number of reasons. This is what all of we investors are attempting to discover, eh? I can not imagine that our portfolio will remain naked in the equity sector going forward, regardless of retirement. We will have to continue to obtain capital appreciation from one area or another, or both. However, we feel at this time; "that this time is different" and although historical investment charts are of benefit to study, this is not my parent's, nor my generation's (age 65) market place. Things have changed and sorting a forward investment path has become more difficult; in my/our opinion.

"I used to think that owning an equity share was owning a piece of a company. Has that changed? Gives me pause to think nobody wants to own companies anymore, just their debt. Has owning debt become a proxy for owning the company?"

>>>>>I don't think this has changed. Equity is still owning a part of a company; and a company's debt (bond issues) is money one is lending to a company, for hopefully; a well thought plan. Utimately, one could hold both areas for a given company with buying some of their equity, as well as some of their bonds, too. I suppose this becomes a "balanced" portfolio. I will not disagree, as has been noted here in discussion, and with linked articles; that too many folks likely do not understand the full implication of market forces that can throw their bond holdings into a negative direction. Our house is aware of this; but it will be the timing and/or vision of when a more permanent trend has begun that could cause losses in some bond holdings. What the retiring boomer generation (reportedly 10,000/day) is going to do with their monies will likely have a fairly large impact on some investment areas for the next 20 years.
As to equity and bonds, and an example; we try to view these investment areas in this fashion. We and 1,000 friends in our area have pooled our money; and are well aware of the quality or lack of, the surrounding 25 mile radius of homes for sale. We feel we know the neighborhoods and trends affecting these areas. We decide that some of the homes are worth an outright purchase (equity, growth and/or value) for future monetary growth; while other homes do not meet this criteria; we do know folks who are willing and able to do what is needed to get homes in more marginal areas into shape for sale or rent. These folks have the qualifications and desire, but do not have ready access to, or the needed money. We lend (bonds, some will be investment grade and some will be junk status) these folks some of our money for a price.....interest rate/yield. In both cases, we hope all of the this works out to our monetary benefit, with a psuedo balanced investment portfolio.
Lastly, and something we need to continue to watch; is the ongoing bond flood. As Robin might say to Batman, "Holy crap, Batman; the ECB is issuing bonds to buy bonds !!!". Well, this is taking place in too many places (central banks/govt's) around the globe; including this country. I don't like this at all. There is a limit, eh? The whole thing is like a realtime and ongoing story from a "Twilight Zone" mini-series.
It would be much easier to pursue this with a real conversation at a table at the "mutual fund cafe". Hopefully, I was able to place some of the thinking properly, into the words here.
Take care,
Catch

Just for reference: in first talking with a66, I suggested that a hybrid fund might be appropriate even for long-term investors. That reflected my view that Treasuries are horrendously overpriced, that stocks are no real steal and that cash is good mostly because it's neither stocks nor bonds. Having an inexpensive, broadly diversified portfolio whose manager had at least some room to reallocate capital on your behalf makes some sense to me.
My short-list of funds to look at:
T. Rowe Price Spectrum Income (RPSIX) - a low cost fund of funds, about 20% equities but also a slug of high yield and international bonds.
T. Rowe Price Personal Strategy Income (PRSIX) - a more stock-centered fund that combines funds and individual securities.
Northern Global Tactical Asset Allocation (BBALX) - a retail fund-of-funds that inherited the expense ratio of its institutional share class and that gained a lot more flexibility three years ago.
PIMCO All Asset (PASDX) - a go-anywhere vehicle driven, with great success, by Rob Arnott. It's a sort of benchmark-free fund of funds, which has quickly grown huge.
PIMCO All Asset All Authority (PAUDX) - the above fund, using leverage and charging more.
For what it's worth,
David

Thanks Catch. A good year indeed.
Think this is first time I really looked at the details, sad to say.
I know the composition is for "near retirement, capital preservation and to stay ahead of inflation creep," but surprised to see it virtually devoid of equity.
Maybe it really is a reluctant bull, if not "A Bull Market In Fear."
I used to think that owning an equity share was owning a piece of a company. Has that changed? Gives me pause to think nobody wants to own companies anymore, just their debt. Has owning debt become a proxy for owning the company?
In any case, very much appreciate you sharing results for your boat each week. I will be following more closely going forward, and hoping always it is going full steam.

Howdy,
A thank you to all who post the links, start and participate in the many fine commentaries woven into the message threads.
For those who don't know; I ramble away about this and that, at least once each week.
NOTE: For those who visit MFO, this portfolio is designed for near retirement, capital preservation and to stay ahead of inflation creep. This is not a buy and hold portfolio, and is subject to change on any given day; based upon perceptions of market directions. All assets in this portfolio are in tax-sheltered accounts; and any fund distributions are reinvested in the funds. Gains or losses are computed from actual account values.
While looking around.....That's more like it, eh? Good old November has been an interesting investment month. U.S. equites, broadly noting; started the month a bit negative and had two weeks of a -1.5% and -2.2% and bounced up +3.8% last week. Our broad based bond mix has been stuck between +11.72 and +11.51% YTD for the month. I will suppose that an equity rally through year end could add 10% to equities and shave no more than 1% from our bond mix. The "fiscal cliff" thingy will likely find a blended fix; but I don't have a clue as to the blend; nor the ramifications upon investment sectors. Some U.S. companies have issued special distributions to allow investors an opportunity to perhaps obtain a lower tax rate for 2012 monies, versus potential rate changes for 2013. I am sure many companies still remain in stall mode relative to capital spending plans, too. All and all, quite a mess of unknowns remain. "That's more like it", should place the very best of traders and machine trades into the money round; as both may thrive from volatility. We continue to watch the housing/construction sector; which has already had a good yearly run. No more time remains on my personal clock, at this time; finding a short report.
The data/numbers below have been updated.
As to sector rotations below (Fidelity funds); for the past week: (Note: any given fund in any of these sectors will have varing degrees of performance based upon where the manager(s) choose to be invested and will not directly reflect upon your particular fund holdings from other vendors.) Sidenote: The average weekly return of 200 combined Fidelity retail funds across all sectors (week avg = + 2.4%, YTD +11.68%).
--- U.S. equity + 3.0% through + 4.9%, week avg. = + 3 .8% YTD = + 14.5%
--- Int'l equity + .8% through + 5.9%, week avg. = + 3.5% YTD = + 13.6%
--- Select eq. sectors - .05% through + 1.3%, week avg. = + 3.8% YTD = + 14.1%
--- U.S./Int'l bonds - 1.63% through + .68%, week avg. = - .32% YTD = + 3.76%
--- HY bonds + .10% through + .86%, week avg. = + .44% YTD = + 11.6%
A Decent Overview, M* 1 Month through 5 Year, Multiple Indexes
You may consider our portfolio to be quite boring, but you may be assured that it moves and bends each and every day; from forces beyond our control.
I have added a few blips related to our portfolio and market observations at the below SELLs/BUYs and Portfolio Thoughts.
SELLs/BUYs THIS PAST WEEK: = NONE.

Portfolio Thoughts:
Our holdings had a + .06 % move this past week. We'll continue to watch; but do not have plans at this time, to enter into equity areas.
b> Still plodding along, and we will retain the below write from previous weeks; as what we are watching, still applies.
--- commodity pricing, especially the energy and base materials areas; copper and related.
--- the $US broad basket value, and in particular against the Euro and Aussie dollar (EU zone and China/Asia uncertainties).
--- price directions of U.S. treasury's, German bunds, U.K. gilts, Japanese bonds; and continued monitoring of Spanish/Italian bond pricing/yield.
--- what we are watching to help understand the money flows: SHY, IEF, TLT, TIPZ, STPZ, LTPZ, LQD, EMB, HYG, IWM, IYT & VWO; all of which offer insights reflected from the big traders as to the quality/risk, or lack of quality/risk; in various equity/bond sectors.
The Funds Boat is at anchor, riding in the small waves, watching the weather and behind the breakwater barrier. To the high praise of MFO and the members, it is very difficult to find a topic to note here that has not been placed into the discussion boards. Excellence, as usual.
I have retained the following links for those who may choose to do their own holdings comparison against the fund types noted.
The first two links to Bloomberg are for their list of balanced/flexible funds; although I don't always agree with the placement of fund styles in their categories.
Bloomberg Balanced
Bloomberg Flexible
These next two links are for conservative and moderate fund leaders YTD, per MSN.
Conservative Allocation
Moderate Allocation
A reflection upon the links above. We attempt to establish a "benchmark" for our portfolio to help us "see" how our funds are performing. Aside from viewing many funds within the balanced/flexible funds rankings (the above links), a quick and dirty group of 5 funds (below) we watch for psuedo benchmarking are the following:
***Note: these week/YTD's per M*
VWINX .... + .91% week, YTD = + 9.42%
PRPFX .... + 1.86% week, YTD = + 6.96%
SIRRX ..... + .21% week, YTD = + 6.73%
TRRFX .... + 1.57% week, YTD = + 9.66%
VTENX ... + 1.33% week, YTD = + 8.74%
Such are the numerous battles with investments attempting to capture a decent return and minimize the risk.
We live and invest in interesting times, eh? Hey, I probably forgot something; and hopefully the words make some sense. Comments and questions always welcomed.
Good fortune to you, yours and the investments.
Take care,
Catch
---Below is what M* x-ray has attempted to sort for our portfolio, as of Nov. 1, 2012 ---
From what I find, M* has a difficult time sorting out the holdings with bond funds.
U.S./Foreign Stocks 1.9%
Bonds 93.9% ***
Other 4.2%
Not Classified 0.00%
Avg yield = 3.99%
Avg expense = .57%
***about 18% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"; which doesn't always imply the holdings, eh?
-Investment grade bond funds 28.2%
-Diversified bond funds 22.4%
-HY/HI bond funds 14.5%
-Total bond funds 32.4%
-Foreign EM/debt bond funds .6%
-U.S./Int'l equity/speciality funds 1.9%
This is our current list: (NOTE: I have added a speciality grouping below for a few of fund types)
---High Yield/High Income Bond funds
FAGIX Fid Capital & Income
SPHIX Fid High Income
FHIIX.LW Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
ACITX Amer. Cent. TIPS Bond
DGCIX Delaware Corp. Bd
FBNDX Fid Invest Grade
FINPX Fidelity TIPS Bond
OPBYX Oppenheimer Core Bond
---Global/Diversified Bonds
FSICX Fid Strategic Income
FNMIX Fid New Markets
DPFFX Delaware Diversified
LSBDX Loomis Sayles
PONDX Pimco Income fund (steroid version)
PLDDX Pimco Low Duration (domestic/foreign)
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
---Equity-Domestic/Foreign
NONE outright, with the exception of equities held inside some of the above funds.

One article I glimpsed recently favored investment grade corporates. The case: (1) valuations are not as "frothy" as for lower tier bonds. (2) they do well in an improving economy as rating agencies raise issuer's ratings in response to improving financial health. (Ie: an upgrade from BBB to A-B). Capital appreciation comes not from falling rates, but from improved fundamentals reflected in bond valuations. fwiw