Time to Bail out of Perkins Midcap Value (JMCVX)

Mulder420

I hold Perkins MidCap Value Fund (JMCVX) in my IRA at Fidelity. I have been with this fund for almost a decade. I have seen the good side and now seeing the bad side.
I have finally decided to bail out of this MidCap Value fund (only time will tell if my timing is bad and narrowed by choices to one of
following:

- Harbor MidCap Value NTF at Fidelity (HIMVX)
- Fidelity MidCap Value (FSMVX)
- Vanguard Selected Value (VASVX, not a NTF at Fidelity)

Since, I hold a large amount of this fund in Rollover IRA, I will be planning to liquidate this fund 5% at a time, so that I can then divert
the proceeds to one of the above fund monthly. I do not want to liquidate all at once and be in cash and I do not want to put a big lumpsump into
one of the above funds in one transaction.

If you were in my shoes, what would be your choice from above? Also, any other Midcap value funds to consider.

Thanks

Mulder

Ted

@Mulder420; Yes, even Tom's brother Bob Perkins, a friend of mine for many years, would say its time to go. Bob got into the business with the Omni Fund, which then became Berger Small-Cap Value Fund which was owned by Kansas City Southern Railroad and eventually sold to Janus. For your information, I've linked some MCV Funds ranked by U.S. & World Report.
Regards,
Ted
http://money.usnews.com/funds/mutual-funds/rankings/mid-cap-value?int=9c0d08

Janus History:
http://www.fundinguniverse.com/company-histories/janus-capital-group-inc-history/

AKAFlack

Mulder420,
You might look at VOE.

Mona

Mulder,

Since you are considering VASVX, you might want to look into VMVAX for the following reasons.

1. VMVAX is more of pure mid cap value fund. 36% of VASVX is large cap.
2. VIMAX has superior 1 and 3 year returns and while Admiral shares have not not been in existence for 5 years, VMVIX has better 5 year returns.
3. VMVAX has an expense ratio of 0.09%. VASVX has an expense ratio of 0.41%.

While I think VASVX is a fine actively managed fund, I believe that is primarily attributable to Jim Barrow, its lead manager and secondarily, Mark Giambrone, both of Barrow, Hanley, Mewhinney & Strauss. Jim will be 75 in the next few months and in preparation of his eventual retirement, Vanguard has has added two fund advisers (Donald Smith & Co and Pzena Investment Management), which I feel dilutes the good ideas from Barrow and Giambrone.

Mona

LLJB

Hi Mulder, if I had to choose from the three funds you mentioned, I'd probably choose VASVX for the lower risk and only slightly lower returns than Fidelity. In the last 13 full years, Fidelity beat Vanguard 7 times and Vanguard won the other 6, so both are doing well. I'd have to do more research about what seem to be frequent subadvisor changes at the Vanguard fund and that might push me in the direction of Fidelity. Vanguard's expense ratio is clearly better, which means the Fidelity fund is actually performing that much better before expenses.

David's done a nice write-up of SCMFX, which falls more in the mid blend box but the returns have been good compared to the above with the exception of 2013 when they trailed badly.

ron

I hold IJJ long term and don't panic.

BenWP

I have been extremely happy with HIMVX. I would take a look at LSV Asset Management's web site for an appreciation of their style of value investing. The fund swooned during the crisis, but it's been superb since. Harbor does a good job of picking their managers.

ducrow

The Lead Manager Jeff Kautz Is Resigning Effective 4/5/15

VintageFreak

I own JPVDX. Regarding HIMVX, Ben, you must have bought after 2009 I think?

BenWP

I did buy after 2009.

msf

JMCVX is a conservative (M* rates it low risk), broadly diversified (almost 100 securities) fund that sits on the value/blend border (oscillating from year to year), tending toward large cap. It is not focused on midcap value, it just averages out that way.

How much of this is important to you in seeking a replacement? FSMVX matches most attributes - its portfolio leans a bit more toward large cap, and a bit more toward value, but both in minor ways. More significant is that its risk is rated average - still not a very risky fund.

VASVX is also slightly more value oriented, though with an average market cap matching JMCVX. M* rates its risk as below average - not quite as low as JMCVX, but in the "next" ballpark. Mona is correct that Vanguard recently added Penza Investment Management recently, but Donald G. Smith and Richard L Greenberg (of Donald Smith & Co.) came on board a decade ago, just three years after Mark Giambrone.

If you want to get a sense of how Barrow/Giambrone work with Penza and his team, you might look at American Beacon Mid Cap Value (AMPAX). From the fund inception until 2014, these two teams were responsible for the day-to-day management of that fund. ISTM that this is a respectable, though not awe inspiring fund - good risk/return, similar attributes to JMCVX, average risk and a bit pricy (compared with the other funds mentioned). Not a fund I'd look at to purchase, but one to see how these teams work together in a co-managed fund.

HIMVX isn't as close a match as the other funds. Its risk is higher (above average per M*) which IMHO goes along with a deep value leaning (vs. sitting on the value/blend line as do the other funds). On the other hand, it has somewhat more securities in its portfolio (about 175). Overall, it gives a bit greater variety in company cap sizes, and a bit less along the value/growth axis. While it has done well in the past few years (with markets soaring), its ten year record is almost identical to AMPAX - and management has been pretty stable for both funds over that period of time (making the comparison valid). Another indicator that the fund is more risky/volatile than the others - better in good times, worse in bad ones.

All of this gets me back to the question - what are you looking for in a replacement? If you're looking for a fund that spans a broad swath of companies, then a fund narrowly focused on mid cap value, whether active or index like VOE/VMVAX isn't going to do it.

Are you willing to look outside of Fidelity, or are you at least open to the idea of doing a move all at once (to facilitate purchasing TF funds at Fidelity)? In that case, you might also consider DHMIX (TF at Fidelity, more compact portfolio, leaning more toward small cap), or VETAX (NTF at Schwab, and a somewhat more focused market cap range, though not nearly as narrow as VOE/VMVAX).

Or if all you're looking for is a better fund, nominally labeled MCV, you might even look at FLPSX. A bit of a contrarian play in the sense that the fund is nearly a world fund, and the US market has been doing much better over the past few years.

JohnChisum

Out of curiosity I ran a comparison snapshot on the WSJ snapshot feature (Lipper) on JMCVX and a mid cap value fund I own, ACMVX. The fact that JMCVX is waffling between mid and large, value and blend sounds like the managers are trying to achieve higher returns but are failing in that respect.

I have been very happy with ACMVX.

msf

In writing that JMCVX oscillates between value and blend, I didn't mean to imply that it's moving around much - just that it really sits squarely on the border.

This is a modest turnover fund. The attributes of the underlying holdings will move around - that doesn't mean that a company it owns has "decided" to become a larger company or more "growthy". The bouncing around of the portfolio is likely more an artifact of a boolean classification system (are you value? Yes or No) than management waffling.

This is why M* doesn't automatically reclassify a fund just because its current portfolio happens to meander a little outside of its current box. It's also why indexes that are designed to be implemented by funds now include "buffer zones" - where stocks are not automatically thrown out of the index just because they happened to meander outside of the index's box.

Regarding ACMVX - its a good fund, though closed now, and best used in a tax-advantaged vehicle (such as the OP's IRA).

JohnChisum

I had to go to American Century's website to clarify that ACMVX was closed. That is the first time I have heard that. M* has it as "limited". ACI website has it as open. It might be closed to outside accounts. It looks like direct investment through ACI is still open. A phone call would clear the situation up.

Good comment @msf. Funds are tending to stretch their borders more these days so I see how M* can classify it wrong unless one looks at a broader time period. That might be hard if one is not a premium member at M*?

Old_Joe

John, where on the AC website did you find that info? I downloaded the "Fund Fact Sheet" but didn't see anything about that there. By the way, Schwab show "available to existing shareholders".

JohnChisum

@Old_Joe, I didn't see any closure info on the AC website. I am guessing they might have a soft close in effect for third party investors. I don't know where to look for that unless one has advisor credentials. So as far as I know, it is open to investors through AC.

Old_Joe

Thanks, John- I misunderstood your post, above.

msf

My apologies - normally I'm more careful about a fund's status, especially when it is described as "limited" by M*. As John speculated, it has a soft close for accounts through third parties. You can find that information on the AC website by looking at the fund's prospectus there:
http://prospectus.americancentury.com/summary.asp?doctype=pros&clientid=amercentll&fundid=025076654

Follow the link in the prospectus to "Purchase and Sale of Fund Shares":

As of November 1, 2013, the fund will generally be closed to new investors other than those who (i) invest directly with American Century (where American Century is listed as the dealer of record); (ii) invest through certain financial intermediaries selected by American Century; or (iii) otherwise qualify for an exemption under American Century's closed fund policy.

Maybe I was thinking of Janus' policy - they no longer sell funds directly to new investors (these would be 'D' shares); you have to go through intermediaries (and purchase their traditional 'T' shares). (But even there, I believe that if you're an existing direct shareholder, you can open investments in other funds directly through Janus.)

JohnChisum

Thanks for that info @msf. Sometimes the answers are on the advisor side of the website versus the retail investor side.