Some really big YTD gains in bond funds of all stripes and colors
-- Not RSIVX = 0.67 YTD

"In May we’re also hoping to provide new profiles of two old friends: Aston River Road Independent Value and Matthews Asian Growth & Income."
My take: no passive or actively managed fund should become an "old friend." Such attachment may result in holding on to an underperforming fund for too long. Hope is not a strategy in politics or investing. Hanging on to poor performing funds with relatively high expenses is all too common among common investors, and that is why such investors routinely underperform passive funds over long periods.
As I see it, ARIVX continues to be the poster child for indexing, and any attractive risk metric it has is largely due to its crazy-high cash position, which is currently 82%. This fund cannot objectively be compared with true SCV equity funds due to its historically high cash position. Currently, this is a MMF which is dabbling in SCV stocks, and primarily provides the diversification of MMF but not SCV equities.
And when fund managers say that cash positions have increased due to decreased investment opportunities, they are in fact engaging in market timing and nothing more sophisticated. And as we all know, market timing has never worked over long periods. I hate to be so down on this fund, but I firmly believe such funds are not in the best interest of long-term investors, and I would never own such a fund or recommend such a fund to friends or family. And as much as I respect Dr. Snowball for all of his wonderful contributions at FA and MFO, I continue to be bewildered by his support for ARIVX.
As for MACSX, this is a rock-solid fund which remains true to its investment objective, and does not try to time the market with high cash positions.
Kevin

Some really nice commentary/insights kevindow I concur about the respect for the professor and his contributions here primarily the fact that he keeps this site running as a freebie and he doesn't rule with a heavy hand. He can chime in but he appears to have a low tolerance for risk (witness also RPHYX among others ) and a long time horizon (RSIVX) and I can't fault him for those traits.

Bonds are roaring...awesome ! Maybe I'll get back to even with RSIVX.

Yep, you're exactly right about my handle, Hank. I grew up a Buckeye's and Woody Hayes fan. I have come to the same conclusion as you about RSIVX which is why I'm now seriously thinking about selling it and moving the money to PTIAX, like MikeM did.

Always happy to weigh in on matters I know nothing about :)
"Three Yards and a cloud of dust" (Woody Hayes) is a great handle - perhaps applicable to some investment styles.
Not clear to me from the discussion is that RSIVX looks like a junk bond fund. M* puts the sub-BBB holdings at around 75% (if I'm seeing it right). Most of the remaining 20+% are BBB rated (investment grade with some speculative characteristics). Junk's been a dicey area recently depending on the sector and tier. Lower quality hasn't fared well. I suspect even the brightest of managers might have easily been tripped up in the recent environment, and so I would be slow to cast blame.
Lost in discussion, seems to me, is What do the holdings within this fund add to one's overall portfolio strength or attributes? I'm not one who believes every asset owned needs to rise all the time. The concept behind diversification, seems to me, is that in any given environment, some holdings rise and others fall. (Obviously, winners should outnumber losers over time.) I wouldn't buy this fund. I expect better, more experienced junk bond managers can be had for lower cost. In fact, I haven't felt a compelling reason to own junk bonds for some time.
Thanks guys for the lively discussion. Time to go run the snowblower.

Thanks so much David_Snowball for providing some valuable and interesting insights about RSIVX! Like MikeM, I would have loved to get into RPHYX, but since that wasn't an option, I decided to puchase RSIVX in order to get exposure to another David Sherman fund based on my research at the time.

PTIAX
Corrected per heezsafe
Total Assets Dec 31 Fact Sheet
$223.02 mil
Total Assets March 23, 2016 per M*
$ 370.3 mil
66 % increase in assets under management. Y T D
Management probably thought Who needs These ?'12B-1 Fee'
BREAKING DOWN '12B-1 Fee'
Back in the early days of the mutual fund business, the 12b-1 fee was thought to help investors. It was believed that by marketing a mutual fund, its assets would increase and management could lower expenses because of economies of scale. This has yet to be proved. With mutual fund assets passing the $10 trillion mark and growing steadily, critics of this fee, which today is mainly used to reward intermediaries for selling a fund's shares, are seriously questioning the justification for using it. As a commission paid to salespersons, it is currently believed to do nothing to enhance the performance of a fund.
Read more: 12B-1 Fee Definition | Investopedia http://www.investopedia.com/terms/1/12b-1fees.asp#ixzz43ljR5V55
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From November Discussion
Here's my response to RSIVX, In My Schwab I R A
PTIAX was a $5000.minimum @ Schwab now $100 (see Ted's post here;" Schwab Slashes Minimums On OneSource NTF Mutual
http://www.mutualfundobserver.com/discuss/discussion/comment/71734/#Comment_71734
PTIAX is no longer a Mutual Fund OneSource® fund.
Now (Minimum: $5,000.00 Additional $500.00) with transaction fee.
@MikeM and @BenWP
It was great @ Schwab while it lasted !

But David, your last paragraph is again saying your happy with RPHYX, insinuating that RSIVX having the same manager must mean RSIVX will be good too. It hasn't been. Your also saying that the sound strategy is being negatively influenced by the un-sound market. Heck, Hussman has been saying that for years (not to insinuate this manager is as bad as Hussman in allocating money). I just think good managers can come up with good investment theories, but it doesn't mean they'll work in real life. This fund may turn out to have great 5 year risk adjusted returns. But why not wait until proven? So far not so good.
P.S. if I could get into RPHYX I would. Proof is in the pudding.

Hey, 3yards.
Sorry, not trying to snub anybody.
Here's my fundamental problem: I'm concerned that the market is currently forked up. Really. Zero and negative interest rate policies fundamentally distort investors' allocations. Why are interest rates at or below zero? Because, despite falling unemployment, global growth is at or below zero. We're about to register a fourth consecutive quarter of falling year-over-year earnings (Factset, March 2016). And still the stock market is rising at above average rates over the past three years; VTSMX is up 11% annually in that period. At the base of the market trough in February 2016, valuations were higher (at least in small caps, maybe broadly) than they were at the peak preceding the 2007 crash. The liquidity available to fixed income market makers is down by 90% since the end of the crisis. In theory, those guys provide the circuit breaker in a falling market: if you want to sell a share of Google, they'll buy it immediately then sell it as quickly as they can find an ultimate buyer for it which pocketing a few bps for their trouble. In the absence of that sort of liquidity, selloffs accelerate.
That's relevant here because I'm reluctant to make too strong an argument against what appears to be a sensible strategy that's performing poorly in a senseless market, especially when the manager has reasonable arguments about the malformations in the market. Similarly, I'm about to buy a small cap fund that's 50-80% cash and that most of you folks think of as appropriate for the Thanksgiving table.
In short, I own RSIVX personally and in an account for MFO. The positions aren't huge, but then none of mine are. I'm not happy that the strategy has been losing money over the past several quarters but I'm also not selling based on that experience nor am I willing to say that the strategy is a bad one. I am pretty happy with RPHYX (up 1% YTD) which continues to be a low-vol alternative to cash for me.
As ever,
David

I sold it last year and moved to PTIAX. A multisector bond fund that has been around at least 5 years with high returns and below average risk. Happy with this one.
And that's what I was hoping for with RSIVX. RSIVX is a pretty good example of a group-think fund, I believe. Why gamble with a fund with little to no tract record? Because the manager did well with another new fund, RPHYX? And that manager gets rave reviews here. But as it turns out, that doesn't mean very much.
By the time I'm dead, I plan to make every investment mistake possible, but hopefully fewer in-between as I learn along the way. This was mistake number 128 if we're keeping tract :)

RSIVX is currently my worst performing fund for 2016 (bond or stock fund). It went down .44% yesterday, none of my other funds came close. I've owned the fund since Dec. 2013 and I'm down 1.5%. I could do better in cash. At least I would break even. I'm starting to wonder if there is any point in owning this fund? I am still curious if David Snowball still owns the fund, but he snubbed me when I originally presented the question. Should I continue to hold this fund?

@expatsp: I own both. RSIVX has indeed been a disaster. Sherman noted making a few bad choices in his recent letter. Still...

Unfortunately Mr. Sherman's sister fund, RSIVX / RSIIX has been a disaster. @David_Snowball, any ideas why?

RSIVX WBMAX ARIVX PRPFX AQRNX MFLDX WAFMX SFGIX I just hope GPMCX is not the next.

Not arguing with your overall point, but I don't think WAFMX and SFGIX deserve to be on that list. Sure, they've lost a good amount of money on an absolute basis, but they have still performed much better than the rest of the emerging markets sector. Folks that "jumped on the bandwagon" for these funds are still better off than if they had put their money in almost any other emerging markets fund.

Completely agree and I apologize. They are five star funds and I can understand long term investors being in them. I just have a thing about holding losers over a long period of time as I want my capital compounding on a *consistent* basis. I realize though 3 years is not a "long period of time" for most investors. Unlike most here, I don't have a salary or pension to fall back on during the lean times.

RSIVX WBMAX ARIVX PRPFX AQRNX MFLDX WAFMX SFGIX I just hope GPMCX is not the next.

Not arguing with your overall point, but I don't think WAFMX and SFGIX deserve to be on that list. Sure, they've lost a good amount of money on an absolute basis, but they have still performed much better than the rest of the emerging markets sector. Folks that "jumped on the bandwagon" for these funds are still better off than if they had put their money in almost any other emerging markets fund.

RSIVX WBMAX ARIVX PRPFX AQRNX MFLDX WAFMX SFGIX I just hope GPMCX is not the next.

;-)

RSIVX WBMAX ARIVX PRPFX AQRNX MFLDX WAFMX SFGIX I just hope GPMCX is not the next.

Consistent with capital preservation is a phrase in lot of equity fund prospectuses too. Now I am ass dissapointed with rsivx as anyone, but let's not quote this and perpetuate the notion rsivx is a cash substitute.

Per Morningstar -- rphyx 43.57 % -- rsivx 18.22 %
ps- rsivx 12 MO. LOSS =4.91%

There are both similarities and differences of faults with hedge funds and open end funds. In one sense, you're right about people tending to pile into some funds based on manager past performance.
People piled into Gundlach's funds, even though they use "exotic financial derivatives like total return swaps". (See below.) IMHO use of exotic derivatives has become more commonplace - they're not limited to hedge funds and a few offbeat mutual funds as the article suggested. Though they're still insignificant if not absent from vanilla funds.
People piled into DoubleLine, into Yacktman, and others based on the managers' long term past performance at substantially identical funds. Not on a short term (3 year) record at a fund that was substantially different. RSIVX by design holds longer term, often illiquid bonds, than RPHYX, as opposed short term bonds ("think 30-90 day maturity").
So ISTM there is a qualitative difference between piling into funds like RSIVX (unproven management for that type of fund) or TFCIX or WBMAX (both with untested strategies for open end funds), and piling into proven management and strategies in the hedge fund arena. Another example of a mismatch between strategies and open end funds - stable value funds. There were (as I recall) over a dozen open end stable value funds attempted. They couldn't handle the open end fund daily redemption requirement.
YACKX also floundered for its first couple of years. It was only in 1994, in a relatively flat market, that it began to shine. Yet people stuck with him. Quoting Yacktman: "My only real fear in 1993 was that people who put their money in during 1992 would take it out at a loss. I didn't want this to happen, because I knew my performance would come back. ... As it turned out, more money came in than went out."
With hedge funds, accredited investors have the responsibility (and supposedly the opportunity) of investigating the offering. These "sophisticated" investors don't get the same disclosures as are required of open end funds. If managers have buried past failures, it's up to the investors to discover that.
The mandated disclosures of open end funds are supposed to make it easier for the other 99%. It is their choice to accept or reject a disclosure that discloses little other than: "just trust us".
DoubleLine funds and total return swaps:
Reuters, Nov 16, 2015: RiverNorth/DoubleLine Strategic Income Fund possesses economic exposure to an aggregate of 1,103,373 shares of Common Stock [of FSC] due to certain cash-settled total return swap agreements."

ThinkAdvisor, Nov 22, 2013“It’s [DSEEX] put together using a total-return swap,” Gundlach said of the fixed-income side of the fund.
Probably other funds; this was a quick search.