Permanent Portfolio Family of Funds to offer "A" and "C" classes in registration

TheShadow

http://www.sec.gov/Archives/edgar/data/357298/000089843216002113/a485apos.htm


"N" class for existing investors.


Excerpt from filing:
Who Can Buy Class N Shares

Class N shares are offered without any sales charge to the following types of investors (see “Opening an Account”):

•Clients of financial intermediaries who: (i) charge such clients a fee for advisory, investment, consulting or similar services; or (ii) have entered into an agreement to offer Class N shares through a no-load program or investment platform.

•Investors who invest directly in a Portfolio.

•Shareholders who owned shares of any Portfolio prior to May 31, 2016 may continue to purchase Class N shares of any Portfolio.

•Retirement and other benefit plans.

•Endowment funds and foundations.

•Any state, county or city, or its instrumentality, department, authority or agency.

•Accounts registered to insurance companies, trust companies and bank trust departments.

•Any entity that is considered a corporation for tax purposes.

•Investment companies.

•Trustees, officers and other individuals who are affiliated with the Trust or the Investment Adviser.

BobC

Not surprising, since PRPFX has lost $14 billion (or more than 80%) of its assets since 2012. That's bottom 8% for 3 yrs and bottom 5% for 5 yrs. Yeah, this year in top 1%, but that's because of its gold allocation. So nothing changes in this fund's allocation, and there is next to nothing going on from an active management standpoint, but annual expenses have actually increased each of the last three years. Perhaps with sales by commission brokers the fund will gain some assets? But for many advisors who left the fund, the A & C shares are a desperate measure to even stay afloat as a company. The fund company's other three funds have gone nowhere. Even it's Short-Term Treasury fund has lost money every year for the past 7 years. That is pretty hard to do.

Derf

I have a small holding & have been thinking of selling along with taking a + fund & selling for (zero gain). With the above info coming out, will a stampede for the door start? Your thoughts appreciated .
Derf

hank

Hi Derf,

The very best time to buy a fund is right after three or more consecutive years of outperformance during which time assets under management have at least tripled. (If they've quadrupled that's even better.)
What could possibly go wrong?
---
PS - Derf, you're OK as long as you checked the box on your application allowing them to sell your assets should the fund liquidate and redeem proceeds in cash. If you didn't, however, than you could receive assets in kind, meaning you might wake up some morning to find gold bars, stacks of plywood, Swiss Francs and whatever else the fund invests in on your doorstep.

hank

Dumb question - What happens to existing shareholders? Do we automatically convert to Class A? Or will our current shares have a new designation? I assume current shareholders will be grandfathered in at the lower Class A fees?

TheShadow

@hank

Shareholders who owned shares of any Portfolio prior to May 31, 2016 may continue to purchase Class N shares of any Portfolio.

hank

@ TheShadow, Thanks much.

msf

Also, N shares will remain open to new shareholders who purchase directly.

I'm wondering whether PRPFX will remain NTF at brokerages. If it does, the N class shares will remain available to new shareholders who purchase through brokerages. Often when share classes with 12b-1 fees are added, the no 12b-1 fee share class is no longer offered NTF.

Maybe it will remain NTF, maybe the A shares (that cost more than N shares because of an extra 12b-1 fee) will be offered NTF (load-waived).

hank

@msf, I had same thought. They don't want to discourage any new money.
I later noticed (after posting my question) that N shares have lower fees than A.

Whatever management can do to stem the flows of hot money rushing in and out is fine with me. That's one (slight) advantage of having loads. Causes some to think twice before buying and twice before selling.