This fund was tax-efficient, but now it has 40% potential capital gains tax exposure.

Hi Sven,
Thank you for the question(s), which from my understanding is … What did I do on the way up? I hope the below explains this.
Last summer when equities had pulled back I was a buyer of equities and moved money from form the cash ballast side of my portfolio into some special equity ballast positions. Through purchase and capital appreciation these special equity ballast positions combined with my normal core equity holdings grew to a total equity range of 63% to 64% of the portfolio. With this, I began to sell some of them off and book profit. Thus far, from this year alone, my profit in the sell of equity ballast positions is better than ten percent plus their appreciation from the time of purchase last summer puts my overall gain for them in a range from fifteen to twenty percent and a few even hgiher. Not bad gains, form my thoughts, in making excess cash productive ... and, it is much better than the 5% that I was earning in my CD ladder.
This summer, should equities pull back as I expect, I’ll be a buyer of equity ballast again, S&P 500 Index or something similar, if its P/E Ratio approaches 12. With 2012 forward estimated earnings of the S&P 500 Index to be around the $105.00 range this would put the S&P 500 Index at around 1260, by my math, and about where it started the year. Currently, I have the Index pegged at about a forward P/E Ratio of 13 with its current value around 1370. Heck if the market does not pull back … I have already made good money with the sell down of my special positions.
Also, within my equity holdings I am heavily invested in what I consider the big three defensive sectors, utilities, healthcare and consumer staples plus two other sectors which are technology and telecom. Combine these sectors account for better than 50% of my equities. Since four of these sectors are also good dividend generators they should better meet a pull back than the other equity positions and sectors I own. When you combine cash of 25% with the income area at 25% and half of my equities in what I consider good defensive equity positions then I feel I am well positioned to meet a downdraft of equity headwinds moderately well. I am not a holder of any special arbitrage strategy funds although I do hold some funds that can and do employee some short strategies from time-to-time based upon market conditions. From review of a recent Instant Xray report, of my portfolio, reflects that I am currently overall 105% long and 5% short. Note this will vary form time-to-time as some of the funds I own execute their short and long strategies.
A main theme that I do utilize is to build and to maintain a higher level of cash during the equity off season which usually starts around May and goes through October. Historically, the best six months for equities for me has been November through April which I refer to the equity season. It is during this period that I buy and ramp up my allocation to equities, hold them through the season or until I become substantially become overweight in them and then sell some of this equity ballast off, as I did during the first quarter of this year, thus reducing my equity exposure.
I hope my answer provides you with a better understanding of how I govern my portfolio and position it. As I have said before, what I do might not be right for you.
I wish you … “Good Investing.”
Skeeter

A 13-14 % reduction in equity is significant. Hope you have done so on the way up before the decline over the last two weeks. Next week will tell if selling continues.
Next question, what are your plans for capital preservation? Several days ago there were discussion on alternate funds including long/short, arbitrage strategy and etc. Have you consider them? Just curious since you have a considerable cash position.
Sven

I would not alter my allocation because of tax considerations, e.g. I would not put everything into muni bonds just to avoid taxes. IMHO the question is how to invest in each bucket efficiently.
If you are a buy-and-hold indexer, then buying low turnover, broad based index funds (or tax managed funds, which are really not that much different) is a good way to go. You'll pay taxes on the dividends as you go along, but the funds won't generate capital gains, and you won't realize gains until you sell. And even then, I'm confident that the capital gains tax rate will be lower than the ordinary income rate. So you'll have a rough equivalent of a non-deductible IRA - funded with post tax dollars, tax-deferred (since you don't realize gains until you sell), but taxed at a lower rate than the IRA (cap gains, not ordinary income).
If you like to swap funds, even every few years, then Catch's suggestion of a VA (after maxing out all other tax-advantaged options) is worth consideration. I'll discuss VA options below.
On the bond side, I've read that one can build a diversified muni bond portfolio with $50K or more (I'm guessing that's 10 or more different bonds). If you're looking at bond funds, and you have a low or no state income tax, Vanguard has excellent national muni bond funds of all maturities. I would not go too long now, but then that's a bit of market timing, and I'm just as likely to be wrong as right. If you're in a high tax state, you'll likely want a state-specific fund. I'm not a fan of long term bond funds in any economic climate (too volatile for any extra yield you get), and especially not now. That rules out most muni bond funds, but there's still a pretty good selection of intermediate term state-specific funds.
Another option is to look at Vanguard's Tax-Managed Balanced Fund VTMFX. I don't know of another balanced fund that mixes low turnover equity with muni bonds.
Regarding VAs - to me, these only make sense if you're going to be investing for decades. Otherwise it's difficult to make up the wrapper costs and the fact that they convert capital gains into ordinary taxable interest upon withdrawal. Fidelity has a reasonable VA, but its fund offerings are either Fidelity funds (which are okay, not great, on the growth side, and pretty weak on the value side) or pretty expensive outside funds. A couple of different options are TIAA-CREF, which costs 35 basis points for a $100K annuity (but that drops down to a mere 10 basis points after a decade), and Monument VA from Jefferson National. It is priced at $240/year, independent of the assets in the account. (So for a $100K annuity, it costs 24 basis points.)
Both TIAA-CREF and Monument are no load VAs. TIAA-CREF offers several very cheap in-house funds as well as funds from over a dozen other houses (Calamos, PIMCO, Franklin Templeton, Royce, etc.). Monument offers a ridiculous number of funds (360), and includes very low cost funds like Vanguard (but for these low cost funds, you have to pay a $50 transaction fee, not unlike the TF you'd pay at a brokerage). TIAA-CREF is a highly rated insurance company, Jefferson National (that brings you Monument) is not highly rated. So if one buys Monument, one is likely better off not relying on any of the insurance, and just buying the VA for the underlying portfolios.
There are still a few tax shelters available, like investing in low income housing, but I don't suggest these unless you really know what you are doing.

Howdy Art,
Are you still able to invest in a 401k, trad. IRA or Roth IRA; based against your employment status and/or wage? As you noted; the Roth is the first best step in my opinion.
Beyond that; very tax efficient funds could be used to take advantage of long term capital gains/dividends. Although the status of taxation of these two areas is a coin toss going into 2013. I don't have knowledge or a list of tax efficient funds; although I know there are those here who do; and a list could be found.
One other plain jane option that I noted in a recent thread is a variable annuity that shelters current taxation, but would be taxed at the ordinary tax rate for withdrawals.
Fidelilty offers such an account which consists of 57 funds, with about 8 or 9 being non-Fidelity, including 3 Pimco bond funds. From my recall the average expense ration is about .75% for the funds. The ER is the same as for a normal retail fund, without any markups. The only other fee is a .25% annuity expense fee. There are no surrender time frames and/or fees and this annuity is not the more traditional lifetime payout schedule and does not include any for of insurance protection. It is just an area where one may invest tax deferred after other avenues have been exhausted. Note; I do not recommend the various annuities offered by full service insurance companies.
Another option could be muni bond funds which would keep taxes to a lower rate, depending on what type of fund was being used; being state specific or a more broad based U.S. muni bond fund.
At the below link you will find info about the Fido annuity. Along the right page side you will find a funds list link in the research section. Also, you may have a Fidelity investor center in your area for a face to face discovery.
I have no affiliation with Fidelity; other than having personal accounts.
https://www.fidelity.com/annuities/variable-annuity
My two cents worth.
Regards,
Catch

I have been out of pocket and on holiday since Thursday afternoon, just returned, and have been going through my mail, etc. I wanted to get back to those that had questions with my thoughts.
Q: Request for thoughts on the markets form John Newton. Hi John, I feel stocks will be going soft as corporate earnings reporting works its way through the upcoming earning season and stock valuations will remain soft on into and through the summer. After we get through the November elections I feel the S&P 500 Index will close around a forward P/E Ratio of 14. With forward 2012 earnings estimates being in the $105.00 range this would put the S&P 500 Index some where around 1470 at years end. During the summer I believe it is possible that we could see a retreat back to a P/E Ratio in the 12 range and with this that would put the S&P Index around the 1250 range. That would be a high to low range with a spread of about 17% or so. There are many global happenings and events that could have a big bearing on this out look … but, you now have my current “SWAG.” It is for certain that no body knows what will transpire until after the fact. In addition, I feel bond valuations will go soft as interest rates rise in the coming months so this is something on the radar screen that needs to be given some thought as well … not just equities.
Q: Where do you put your cash form the sale of equities? Hi Cathy G, thank you for the question. Currently, most of my cash is liquid with the exception being what remains of a CD ladder that still has a couple CD positions that are paying in the 5% interest range. They will be maturing in the near term so with this all my cash will be liquid with no time deposits. It does not take much for one to figure out where I am with my cash allocation if equities and other assets are now at 54% and income is at 25% … then this leaves cash at 21%. The way I have been making my cash productive is to use it to fund special short term investment positions and other investment strategies. Some might recall I was a buyer of equities back during the summer going into early fall. When the market turned upwards this resulted in capital appreciation on these special positions and my equity allocation grew to about 63% to 64% of the portfolio. I then began to scale equities back and this resulted in booking capital gains form the sale of the special short term investments. This is one way I used some of my cash to make it productive. I’ll admit with cash having little or no yield it is not much of a productive asset class unless you can do something with it as I have. However, when equity and bond valuations start pulling back in their value, cash will remain a stable force and help stabilize the portfolio in the upcoming anticipated downdraft. A high cash position should help soften the down turn form my thoughts. Plus it will provide me a means to taken advantage of a stock market pull back when and if it takes place allowing me to reload my portfolio with some special short term investment positions. So, carrying this amount of cash does not bother me at this time.
Q: What vehicles do you use to get precise percentages? Hi MikeM, thank you for the question. The percentages I referenced were for the Master portfolio. The Master portfolio consists of the sum of several portfolios … taxable account, 401K and IRA. In adding the valuation of equities from all the portfolios together resulted in a percentage that I expressed out to the tenth … I believe it was 55.3%. I usually reference only whole numbers by rounding. Sorry if this misled you into thinking otherwise.
I hope this response answers your questions as I tried to cover everything that was asked. If I missed something … please let me know.
Have a great week … and, Good Investing,
Skeeter

Reply to @msf: Thanks so much, mfs, for your follow-up. I have always been constantly amazed at how generous the people like you here in this forum are with taking so much of your time to help others.
The end result for me after reading all the links is that I'm just not comfortable transferring any of our accounts to this Company. They, and the advisor, may be good but if I'm this dubious now, it can't be a start of a good relationship. I will most likely wait until the end of this summer to see if there is any good news about actual economic fixes, then transfer the 0.45% Roth cd's to Scottrade and, assuming another bad Spring, maybe get in at the lower end of the prices for the funds I invest in. There just seems to be no point in keeping Roth's at this ridiculous rate when the whole point is to not have to pay taxes on the gains.
P.S. I did wonder why it was law firms like the one I found that made such a strong, negative review of Raymond James. Guess they want clients who have had bad experiences there.

Howdy,
Again, a thank you to all who post the links and also 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 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..... Mega, as in the recent lottery; and the word fickle indicates: is erratic, undecided, or unpredictable.
A few personal notes for reminders, or for those reading this for the first time. Surely there are those who view this portfolio mix as a possible clunker, not containing enough forward growth and/or value. In the current investment environment as this house views this area; the first and primary aspect is to retain capital. We will surely miss opportunities and turns in this sector or that, which will cause losses in some areas and gains in others. With this we must ride and adjust to the best of our ability. Also to this, with our misses and hits we find our portfolio in company with bright minds over the past few years; hedge funds, J.P. Morgan (in 2010, spring; the 10 year Treasury will move to 5%) and Pimco Total Return (PTTRX) missing the Treasury run and other bright minds on a global scale attempting to do the same thing. Horn blowing; no ! We all get lucky and find our monies in the right place at the right time, eh?
To the Mega: Would this portfolio look different if we were a Mega Million lottery winner? Without a doubt. Would we feel sad about a 20% loss to the downside, if we were farily wealthy? But, if we still had $8 million remaining of a $10 million portfolio; we would surely not be stretched into a poor lifestyle. Some many things are from one's perspective, eh?
The fickle side will be an addendum, as the write ran into the text limiter.............................
As usual, the markets and the sectors within the markets were scattered every which way this past week. I will note a few areas:
--- U.S. equity funds = +.45 through - 1.77 % (week avg= -.79/YTD +13.2%)
--- Int'l equity funds = +.32 through - 3.1 % (week avg= - 1.63/YTD +12.6%)
--- Sector equity funds = + .94 through - 6.6 % (week avg= - 1.09/YTD +12.8%)
--- Investment grade bond funds = +.74 through - .0% (week avg= +.15/YTD +.3%)
--- HY/HI bond funds = + .0 through - .41 % (week avg= -.23/YTD +4.9%)
--- Multi sector bond funds = >>>to be revised
--- Emerging markets bond funds = >>>to be revised
Average of 200 combined funds across all sectors above (week avg= -.73/YTD +9.4%)
The above numbers provide some value as to how one chooses to arrange their portfolio, not only relative to weighting of sectors; but also how confident one feels with using very narrow sector investments or broad based funds, be they active managed funds, indexes or etf's. The above list and the variances of gains or losses, of course; are nothing new. But as this house moves along with our portfolio, we continue to reshape and attempt to understand methods of how to best provide for positive returns going forward.
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 + .003 % move this past week. Yes, that is 3/1000's. Well.......we'll sit with our current mix to find what this Monday brings. Our 50% reduction in FSAGX several weeks ago still finds the remaining holding to get whacked (-6.6% last week). Most of our equity holdings were down a bit last week; as well as the high yield bond sectors; while the mixed bag of other bonds were flat to slightly positive. To those holding 50% or more in equity postions, I salute you; as you should be at a most favorable YTD return, far surpassing our performance.
The old Funds Boat is at anchor, riding in the small waves and watching the weather. 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.
This 1st link to Bloomberg is for their list of balanced funds; although I don't always agree with the placement of fund styles in their categories.
http://www.bloomberg.com/apps/data?Sector=888&pid=invest_mutualfunds&ListBy=YTD&Term=1
These next two links are for conservative and moderate fund leaders YTD, per MSN.
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Symbol=$HF&Category=CA
http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MA&Type=&symbol=$HF
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 4 funds we watch for benchmarking are the following:
***Note: these YTD's per M*
VWINX ....YTD = + 3.39% - .30 week
PRPFX ....YTD = + 4.40% - .82 week
SIRRX .....YTD = + 2.07% + .09 week
HSTRX ....YTD = - .34% - .26 week
None of these 4 are twins to our holdings, but we do watch these as a type of rough guage.
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 March 9, 2012---
U.S.Stocks 10.5%
Foreign Stocks 6.8%
Bonds 78.5% ***
Other 4.2%
Not Classified 0.00%
***about 35% of the bond total are high yield category (equity related cousins)
---This % listing is kinda generic, by fund "name"
-Investment grade bond funds 26.8%
-Diversified bond funds 19.8%
-HY/HI bond funds 23.2%
-Total bond funds 17.8%
-Foreign EM/debt bond funds 4.3%
-U.S./Int'l equity/speciality funds 8.1%
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 Fed High Income
DIHYX TransAmerica HY
---Total Bond funds
FTBFX Fid Total
PTTRX Pimco Total
---Investment Grade Bonds
APOIX 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
TEGBX Templeton Global (load waived)
LSBDX Loomis Sayles
---Speciality Funds (sectors or mixed allocation)
FRIFX Fidelity Real Estate Income (bond/equity mix)
FDLSX Fidelity Select Leisure
FSAGX Fidelity Select Precious Metals
RNCOX RiverNorth Core Opportunity (bond/equity)
---Equity-Domestic/Foreign
FDVLX Fidelity Value
FSLVX Fidelity Lg. Cap Value
FLPSX Fidelity Low Price Stock
MACSX Matthews Asia Growth-Income

Howdy Cathy,
Okay, I will presume I have enough coffee in my body to be sensible this morning.
First, this is a link to the VA you mentioned. If you have not read through parts of this, once the page is open....do the "control and f key" on the pc to bring up the search/find window. Type in the word........fee........... Click find. You will find the base fees for the various functions of this VA.
http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=7762216&SessionID=g0fHHe9tsQ5lnl7
Second. I did read your link regarding the various machinations of the RJ company. I find any of this troubling, regardless of the company. Would be a good upfront question to one of their brokers, eh? Like: "What are your (RJ adviser) feelings about all of this?"
Third. You mentioned you are appalled by the young adviser's political leanings. His/her political views should find no place in a discussion with a potential client. Only if I knew a person very well, would such a discussion subject be involved.
Fourth. You mentioned consolidation of accts......credit union and Scottrade. If a married couple each has a Roth and Trad IRA, you'll still have a total of 4 different accts.; no matter where the accts. are held and this is the least number a couple would have. Now if the couple has more than one of each type of IRA with different vendors, then consolidation may be the way to go. But, in the end; each person will remain with one of each type, eh?
What caused you to consider a VA? Our house would have a VA on a long list of choices, but not for any death benefits or long term payout functions. All VA's are not the same; although likely 99% have the common thread as used by most insurance companies.
As Mark and msf noted, too; a VA may have a place, after all other avenues are exhausted. Some of this depends on one's current employment or being retired. Being the ability (income limitations) to contribute to an IRA and related.
In the money !!! If our house were to come upon a fairly large sum of money via inheritance or lottery or........ We would have to consider what to do with these monies. A few quick and dirty thoughts come to mind.
1. Trad. IRA's could be converted to Roth's
2. Split the monies into taxable and deferred tax accts.
--- the taxable could go to muni funds and/or the most efficient and viable funds available for dividend/long term captial gains taxation rates.
--- another choice could find a VA here, too. Current tax law would find these monies taxed as ordinary income upon withdrawal. The VA of choice today (without further in depth study) would be from Fidelity. Their plain jane VA is for deferring current taxation. No bells and whistles for future guaranteed payouts, no death benefit and no surrender period charges. One has access to 57 funds, most of which are Fidelity. One pays the normal expense ratio (same paid by other retail holders) of the fund, plus a .25% fee.
In the near future, our house will rollover accts from employment accts. (401k's and 403b's) into existing trad. IRA accts.
In the end, we each will hold a Roth and trad. IRA via Fidelity.
Your house surely has much different considerations via California and the tax rates there.
We currently do not have any investments in ongoing taxable accts.
As to the credit union IRA's you mentioned. This money surely is not earning much, eh? But, it is insured via NCUA, yes?; if this is a part of a consideration.
Past this, you may choose to consolidate the trad. and Roth IRA's to one vendor. As noted, we will remain with Fidelity, as we are most satisfied with their "paperwork", easy of use, very nice online acct. pages and functions and access to more investment areas than one could fit onto a list.
I suppose your choice(s) boil down with which vendor to remain with for your taxable and IRA accts.
But, I would not personally choose a VA of the type mentioned.
Lastly, as to muni bonds (potential problems), bonds in general and let us not forget equities, eh? Nothing much has changed. I will not dismiss that yields are very low and should have no place to go; but up. One may ask the same of equities in the current market. Do they have more room to move upward? I will attempt to note some of this in the Funds Boat, as my time this weekend adjusts. Although anything can happen over the weekend, I do suggest to note what direction Treasury issues take this Monday opening and through the day.
Okay, I must get to some chores.
Take care,
Catch

Reply to @msf: Thanks so much, MSF, for taking the time to send me such a great, comprehensive response! I will check out your links on Raymond James. Would you mind taking a quick look at the link I found below... and let me know if the awful complaints there seem valid to you?
http://www.stockbroker-fraud.com/lawyer-attorney-1222573.html
The advisor is just a young kid (well, to me anyway), but was recommended as "someone who will bend over backwards to comply with client's goals and wishes, even at his detriment." He does seem sharp and knowledgeable, but it's hard to completely disregard his political views (appalling to me).
I would only be transferring about 25% of my total investments if I decide to do this, but it would be so nice to let them manage the 3 out of 4 smaller portfolios so I could concentrate completely on the largest one. I already don't fully understand all the funds I manage that I would like to at least understand all a lot better.
I don't mind paying the percentage fees... IF there is enough expertise and active management of my portfolios and they are able to do slightly better than the 75% portfolio I will continue to manage. I definitely do NOT want USB-type management that kept some investments for a century, and most others for decades, not only making my taxable gains on non-step-up accounts horrendous, but mainly by doing almost NO rebalancing over the last 100 years, letting losing funds drop 80% and having 85%+ equities for almost all retired beneficiaries. Still makes my blood boil, especially since they still have the largest Trust there which doesn't dissolve until 2021.

Reply to @CathyG: The various Arbitrage funds - Merger (MERFX) or Arbitrage (ARBFX) or AQR Diversified Arb (ADANX, I think?) would be a place to park low-key (although there is certainly still *some* risk) non fixed-income money I'd consider personally. Certainly would be more risk, but Sierra Core Retirement (SIRIX) is a conservative fund-of-funds geared towards retirees with an "absolute return" goal (emphasis on *goal* - I believe the goal is an 8% total return - capital gain + dividend on average per year *over a market cycle*, so there may be years less and more. It handled 2008 and 2009 well, but has been quieter since.)
There are likely a number of lower-risk fixed income options that others will likely be able to offer if you didn't want to go to cash. I'm not in cash at all - I own what I want to own for the mid-to-long term (especially long-term for a series of various stocks) and am really trying to make very little in the way of moves for the next year or two.
Or one can always look at going to cash (MM/CD/etc) as at least not putting money at risk (aside from inflationary risk.)

Yes, there is a way, but it sounds like you may not be clear on what creates that tax deduction. It's the fact that you're contributing money to a spousal IRA. It doesn't matter where that money comes from.
If the only way you can come up with the cash to fund that IRA is by taking a distribution from another retirement account, then perhaps that deduction isn't doing too much for you now, and you'd be better leaving the money in a tax-exempt account growing tax-exempt, rather than moving it to a tax-deferred account, where the growth will ultimately get taxed as ordinary income.
If this is a short term cash flow problem, you can move the money to the new employer account and borrow against it. (Something else that's not advisable, but it can beat outright withdrawing the money.) Technically, that's a way of taking 401K money and getting it somewhere else. At least for awhile. Note that you can do this only with a current employer's 401K, and the loan is due upon termination of the job, if not sooner.
As I described in a prior post, if you take a distribution of the Roth401K, roll most of it into a Roth IRA, then the remainder may be tax (and penalty) free. Then you have the cash to do with as you will - contribute to your wife's IRA, go on vacation, whatever. For example, say that you've contributed $6K to the Roth 401K, and it's now worth $9K. If you transfer $4K to a Roth IRA, the IRS says that this $4K includes the $3K of gains and $1K of original contributions. The remaining $5K consists entirely of contributions. They're tax-free. No penalty. That gets you $5K to play with. But also as I noted above (as did BobC), watch out for possible withholding on the distribution.

The main issue with this asset class when dealing with individual MLPs are the K-1 tax forms that are generated. This does not occur with the funds.
Personally, I owned Salient MLP Energy and Infrastructure, which I think is an excellent and unique MLP closed-end fund (SMF), which can hedge. However, it ran up and I took profit; I think people really piled into this asset class because of the yields and they are overbought. I own BIP (Brookfield Infrastructure) and that's the only single MLP I currently own, as for me that's a unique and long-term holding. I also own TTO (Tortoise Capital), which is a private equity MLP fund that is transitioning to be an infrastructure REIT, and I'm in that to a mild degree as I'm interested in the infrastructure REIT it will eventually transition towards.
I do think MLPs are interesting longer-term, but as a smaller, supporting player investment. In the short-term, I think interest in the asset class is a little overdone, but seems to be calming down since the start of the year.
This is definitely not a conservative asset class, as well - while MLPs provide a big yield, they also went down quite a lot in 2008.

I have discovered that I can buy Steelpath MLPDX.lw with the load waived through Vanguard which seemed an attractive option until I reviewed the Tax Analysis on M* and found the comparison to AMLP and AMJ for example was not so compelling regardless of the 7.38% current yield. In my research there is also mention of paying capital gains on the accrued tax liability when selling the fund which I am not sure how to quantify (there is an estimated 17.05% allowance made in the expense ratio for deferred taxes shown in the Prospectus if realised). Yes, the yield is attractive but are there dangers lurking over and above the general risks associated with this asset class?
I know there have been prior discussions on MLP's but would be grateful for any thoughts on this particular subject. As my first post please take it easy on me until I get up to speed.

FYI:
Regards,
Ted
http://finance.yahoo.com/news/time-mutual-funds-join-21st-110000412.html

I "hear" you, Scott. Over time, I'll be deliberately working to dilute that heavy concentration in my top three. But at the moment, I don't want to break it up just to break it up. I WANT that PREMX monthly dividend to GROW. I'm reinvesting ALL dividends and cap. gains in ALL holdings. MAPIX, MAINX and DODIX give quarterly payouts. MACSX is twice per year. MSCFX = annually.

Reply to @David_Snowball: Thank you for your comments, David - they are always appreciated. There is the Global Hedge fund holdings ETF, which you mentioned, but there is also an ETF coming called Global X Listed Hedge Funds ETF (The fund holds securities and GDRs of publicly listed hedge funds globally.) This would appear to be a fund of listed hedge funds/hedge fund feeder funds, such as the ones in Europe.
If I'm reading that right, my curiosity is how they're going to fill a fund with maybe a handful of positions at most, unless what qualifies as a "listed hedge fund" (such as Greenlight Reinsurance and its roundabout connection to David Einhorn's Greenlight Capital) covers a wide variety of things.
GTAA manager Meb Faber (who wrote a chapter in his book on these funds) also apparently addressed this fund from Global X the other day:
http://www.mebanefaber.com/2012/03/27/13f-listed-hedge-funds-etfs-on-the-way - and apparently he had tried (and scrapped) his attempt to offer a fund-of-funds ETN for these publicly listed hedge funds in 2008 before the market tumble. His comments on the fund of hedge fund positions is also interesting.

The S&P 400 Mid-Cap Index was up today. I have always recommended the 400 over the S&P 500 long-term. I have about 25% of my capital appreciation portfolio in IJH.
Regards,
Ted
http://www.bloomberg.com/quote/MID:IND

Reply to @catch22:
Thanks Catch...this could be one reason:
http://www.bloomberg.com/news/2012-02-23/barrick-s-regent-says-gold-miners-losing-capital-to-etfs.html
Eric Sprout has his thoughts too (from an article either you or Scott linked):
"Looking back at the trading data on February 29th, the sell-off in gold and silver appears to have been an exclusively paper-market affair. We were surprised, for example, to note that between the hours of 10:30 am and 11:30 am, the volume of the COMEX front month silver futures contracts equaled the paper equivalent of 173 million ounces of physical silver. Keep in mind that the world only produces 730 million ounces of physical silver PER YEAR. The problem from a pricing standpoint is the simple fact that the parties who were on the selling side of those 173 million paper ounces couldn't possibly have had the physical silver to back-up their sell orders. And the way the futures markets are designed, they don't have to. But if that's the case, how can the silver price be smashed by sell orders that don't involve any real physical?"
Source:
http://sprott.com/markets-at-a-glance/the-[recovery]-has-no-clothes/

Reply to @BobC:
Thanks for the reply. Short of re-balancing when one of my funds has outsized periodic gains or losses I try to dig a little deeper to get a handle on investments that lag for long periods of time.
USAGX is one that has me scratching my head. With gold anywhere above $1100 (the cost of mining) I would think there would be incredible profits for the mining companies. There must be something at work here that I am just not getting.
Here's a price chart of GDX (Miners) vs GLD (Metal) from July 2009 to Apr 2011:

Here's the same 2 year time frame back from today. You can see the two separate in May of 2011:

Finally this one year chart shows the separation clearly. The price ratio at between the two shares at the beginning of this chart (last year) was ($146.74:$62.63) or (2.34:1) today the price ratio is ($162.94:$50.39) or (3.23:1)

I'm thinking either gold drops in price (continued weaken currencies probably won't allow this) or miners revert upwards.