I have an IRA with T Rowe Price and have some dry powder ready to buy on the next correction. (I know, I've been waiting an awfully long time!) Most of my funds are in house but I have a brokerage account which provides a pretty good selection of funds from other families. The obvious choice is PRDGX but it has lost a Morningstar * recently, though it's still a great fund. I already have BPAVX and FOCPX.
Most of my funds are growth based but I think value will catch up this year. Any recommendations (especially from personal experience) would be much appreciated.
Cheers.
Comments
https://www-1012.aig.com/pdf/focused-dividend-strategy-portfolio-fact-sheet_s5110fs1.aspx
Don't get too hung up on the M* ratings. First, because they're retrospective; second because changes can just as easily reflect some especially good (or bad) year falling out of view (e.g. 2007 now off the radar, 2012 out of the five year weighting); third because they are risk adjusted while one may be focused on raw performance or prefer a different perspective of risk (e.g. symmetric vs. counting downside volatility more heavily).
So long as a fund is well managed, has an approach you like (see BrianW above), is reasonably priced, and available for you to purchase, it merits consideration regardless of what's in its stars.
Regards,
Ted
https://money.usnews.com/funds/mutual-funds/rankings/large-value
I certainly am looking hard at RPG.
“I have an IRA with T. Rowe Price” - Good. It doesn’t get much better than these guys.
“and have some dry powder ready to buy on the next correction” - Not me. I believe the next “correction” from these levels will more closely resemble a trap door over a rather deep pit (maybe something out of Alice in Wonderland).
“I've been waiting an awfully long time” - That’s not your fault. It’s silly season in the equity markets.
“The obvious choice is PRDGX but it has lost a Morningstar” * - Don’t be seduced by the stars. Read the Prospectus and a couple recent annual or semi-annual fund reports to garner the flavor of the fund and how it invests. Always balance out the M* reviews with at least 2 other opinions. I like Lipper and Max Funds.
Suggestions:?
It’s a big fund universe. My own experience is limited to about a dozen families. But you did say you wanted answers based on personal experience.
(1) Dodge and Cox are deep value investors. Low fees. Solid long term performance. However, their flagship DODGX lost over 43% in 2008. (How strong is your stomach?)
(2) OAKBX doesn’t advertise itself as deep value, but in owning it and reading their commentaries for over a decade, I’m convinced it is run like deep value. They bought GM 4-5 years ago when you couldn’t give the stock away (slight exaggeration). It eventually paid off. The nice thing about this fund is it does a pretty good job hedging against steep losses. It lost 16.2% in 2008 - less than half as much as DODGX. I’ll point out that the former is normally classified as a stock fund and the latter a balanced fund. I’m not sure those distinctions mean a whole lot at this point in time. It’s more about your risk appetite and willingness to stick to your investment decisions.
The growth and value labels can be confusing. Sometimes value houses move into traditionally “growth” areas because they find the price attractive. And I suppose it could work the other way around as well.
Regards,
Ted
YTD: RPG 8.24%
YTD: RPV 6.04%
1yr. RPG 33.68%
1yr. RPV 24.52%
3yr. RPG 13.03%
3yr. RPV 12.28%
5yr. RPG 17.59%
5yr. RPV 16.16%
10yr. RPG 13.68%
10yr. RPV 11.91%
(Source M*)
Please do tell where one may go to purchase those returns.
>> classified as a stock fund and the latter a balanced fund. I’m not sure those labels mean a whole lot. It’s more about your risk appetite.
?? It's about whether the fund holds bonds+cash, innit?
DODGX holds ~1%, OAKBX over a third.
Growth and value are plenty distinct in most people's minds, I think; just look at p/e and similar measures of FCNTX and TRBCX vs TWEIX and DODGX.
(Actually, Lipper shows DODGX holding 1% cash.)
As for your knowledge, was quoting your
>> I’m not sure those labels mean a whole lot.
I understand your point @davidmoran. I did rephrase my statement above in an attempt to be more lucid.
Notwithstanding, some funds with a hefty dose of bonds actually manage to compare quite favorably with other more focused equity funds.
If you've ever used "mean regression" as a mantra, how does that apply here? I agree with hank that "a decade is a pretty short period".
RPG and RPV go back barely a decade. Using VIVAX and VIGRX instead (going back to 1992), here are their last 10 year cumulative returns, their their previous 10 year cumulative returns, the cumulative returns for those 20 years, and their lifetime cumulative returns (11/2/1992 through 1/22/2018).
last 10 yr: 196.29% (growth) vs. 141.12% (value)
prev 10 yr: 44.05% (growth) vs. 76.08% (value)
last 20 yr: ; 326.80% (growth) vs. 324.55% (value) - a virtual dead heat
lifetime: 983.07% (growth) vs. 991.05% (value) - a virtual dead heat
You can get these figures from M*'s chart here (just tweak the date ranges).
Annualized, the first three are:
last 10 yr: 11.47% (growth) vs. 9.20% (value)
prev 10 yr: 3.72% (growth) vs. 5.82% (value)
last 20 yr: 6.10% (growth) vs. 6.06% (value)