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I am lookin for a growth fund that is not heavily weighted on Tech, not above 50 % at least. I saw a TCW fund, TCW New America Premier Equities Fund (TGUNX). What is your take on it ? Any other options ?
BIAWX is a great choice. Read Davids review this month. I also like HNASX which is managed by T Rowe Price. Both have strong long term performance and held up well last Fall. For small cap, take a look at WAMCX.
I agree with the recommendation of POGRX, which is 30% to Tech, but is also 30% to healthcare. Not sure if that’s a concern for you. All the PRIMECAP funds skew that way. POSKX may be more to your liking- trims tech and HC for financials.
”I am lookin for a growth fund that is not heavily weighted on Tech, not above 50 % at least.”
Your question suggests that such a fund would be an exception to the rule or an aberration from norm. Frankly, I’m not aware of any diversified growth funds that would ever exceed 50% in technology under normal circumstances. With growth funds I think the most important thing is to buy-in for the long haul. Each will have its day - but their performances diverge sharply over shorter periods as various sectors wax and wane. Trying to always own the best performing one might be the equivalent of the proverbial elephant chasing his tail.
Lots of fine growth funds out there. Just a couple that come to mind:
Different rating services and observers may define “technology” companies differently. One might include a company like Amazon under consumer retail and another might consider it a technology company. Telecommunications is sometimes listed as a separate category and at other times considered part of the broader technology area. Some of that is just games people play. But sometimes it’s because there’s considerable “gray area” when deciding where a particular company best fits.
That said, Lord help anyone who ends up in a “diversified” fund that has committed over 50% to the technology sector. It’s one of the most volatile areas in which to invest.
Also, Morningstar splits Technology from Communications. As such, PRMTX is “only” 28% tech. Another 29% is comm.
In my book PRMTX is not a diversified growth fund, but rather, a specialty fund. Investors know up-front that it concentrates holdings in the media and telecommunications sectors. From Investopedia: https://www.investopedia.com/terms/d/diversifiedfund.asp
I had the impression there was also a legal distinction between the two - but am unable to substantiate that. From what I see, PRMTX is probably legally considered a diversified fund due to its broad company diversification - although it is not a diversified fund as the term is commonly applied to funds.
BIAWX is a great choice. Read Davids review this month. I also like HNASX which is managed by T Rowe Price. Both have strong long term performance and held up well last Fall. For small cap, take a look at WAMCX.
...After reading, I just sent for a starter kit for BIAWX.
@msf - Re: SEC - “Truth in labeling”? That’s new to me. That would suggest HSGFX should have omitted the word “growth” from its name. Maybe HS#FX.
From your source “The rule requires a fund with a name suggesting that the fund focuses on a particular type of investment (e.g., "stocks" or "bonds") to invest at least 80% of its assets accordingly. Under Commission staff positions, these funds previously were subject to a 65% investment requirement.”
Not what I had in mind, but very interesting. PRMTX must than be legally obligated to have 80% in those 2 sectors? (Fortunately, it’s a spectacular fund).
What I had in mind was the rule referenced in a Zack’s article (cited below). The article’s so skimpy I was reluctant to post it. (And I’d previously assumed - incorrectly - that by law “diversified” funds could not concentrate heavily in one sector.)
From the prospectus: "The fund will normally invest at least 80% of its net assets (including any borrowings for investment purposes) in securities of communications and technology companies."
”I am lookin for a growth fund that is not heavily weighted on Tech, not above 50 % at least.”
Your question suggests that such a fund would be an exception to the rule or an aberration from norm. Frankly, I’m not aware of any diversified growth funds that would ever exceed 50% in technology under normal circumstances. With growth funds I think the most important thing is to buy-in for the long haul. Each will have its day - but their performances diverge sharply over shorter periods as various sectors wax and wane. Trying to always own the best performing one might be the equivalent of the proverbial elephant chasing his tail.
Lots of fine growth funds out there. Just a couple that come to mind:
Different rating services and observers may define “technology” companies differently. One might include a company like Amazon under consumer retail and another might consider it a technology company. Telecommunications is sometimes listed as a separate category and at other times considered part of the broader technology area. Some of that is just games people play. But sometimes it’s because there’s considerable “gray area” when deciding where a particular company best fits.
That said, Lord help anyone who ends up in a “diversified” fund that has committed over 50% to the technology sector. It’s one of the most volatile areas in which to invest.
@hank, Dodge & Cox is most definitely not a Growth shop....
Thanks. I’ve emailed Dodge and Cox and directed them to stop using the word “growth” in describing any of their funds in light of your comment and msf’s above reference to “truth in labeling”. This should take place by tomorrow if not sooner. Quoting one well known individual, “Nobody disobeys my orders.”
With regard to D&C, whatever you prefer to call them, they run a good shop with relatively low fees. I’m always hesitant to sing their praises on the board because it’s not in the interest of long term holders like myself to have hot money flowing in and out of a fund (or funds) like theirs.
Thank you for all your inputs. Some of your recommendations are TF funds on Fido platform, some of them a little pricy. I like TRP funds, and may pick one there. Just wonder some of you have some bias toward TCW, why ?
Glad to hear you found folks’ suggestions helpful. Not sure what you’re looking for or where you are in the investment cycle. While it doesn’t seem like it today, an ability (disposition) to withstand the inevitable market shocks both here and abroad is one consideration. Doesn’t do any good to own a top performer if the first 35% spanking is going to find you standing out on a ledge mumbling incoherently to yourself (figuratively of course).
An overlooked fund that’s not a category leader, but would be a nice middle of the road growth fund, is Price’s PRSGX (Spectrum Growth). I happen to believe there’s a margin of safety in numbers. This one invests in about a dozen different TRP funds - several of them top flight. And, unexpectedly, it’s got 36% in foreign holdings. Lipper has it middle of the pack (3/5) on return. But it leads its Lipper’s category for capital preservation.
I realize most here will shun a fund like that. But if you’re more of a “set-it-and-forget-it” type - or just too busy to pay a lot of attention, I think it’s a great long term pick. One reason it lags its Lipper peers is the substantial foreign weighting (higher than the peers it’s being ranked against). But that will turn one of these days. Just a thought since you like TRP. I like them also for many reasons.
@young - I have no bias against TCW because frankly I don't know that much about them. However, the particular fund you inquired about gives me pause because: °It is a very concentrated fund, +52% in the top ten holdings, +12% in the top holding, There's nothing wrong particularly about that except be very aware of what you're buying. °The fund has a pretty short history (3 years). I'd like to see a longer performance history, more info on the manager, and more info on how the fund is managed. °Expenses or should I say the expense ratio, is all that you can control when choosing funds and this one is a bit high given most of the other growth fund options out there. °This is a small fund in terms of AUM, $87 million. Given the concentration of the portfolio you'd better hope that the manager is on his stock picking game.
So again I repeat, there's nothing inherently wrong here but be very aware of what you're buying.
Comments
Lots of fine growth funds out there. Just a couple that come to mind:
TRBCX - 28% technology - per Lipper http://www.funds.reuters.wallst.com/US/funds/holdings.asp?YYY622_FomFGKRzy/Zlxw7oh/nFxhuZTH3KwZb8EX/lL+8rQLf+NFFYgOPjGud+qERLyR7v
DODGX - 15% technology - per Lipper http://www.funds.reuters.wallst.com/US/funds/holdings.asp?YYY622_ku+B2TlKptBi+tpivKaWyBuZTH3KwZb8EX/lL+8rQLf8SJRq1qRCsCbi0+hJj/WI
Different rating services and observers may define “technology” companies differently. One might include a company like Amazon under consumer retail and another might consider it a technology company. Telecommunications is sometimes listed as a separate category and at other times considered part of the broader technology area. Some of that is just games people play. But sometimes it’s because there’s considerable “gray area” when deciding where a particular company best fits.
That said, Lord help anyone who ends up in a “diversified” fund that has committed over 50% to the technology sector. It’s one of the most volatile areas in which to invest.
From Investopedia: https://www.investopedia.com/terms/d/diversifiedfund.asp
I had the impression there was also a legal distinction between the two - but am unable to substantiate that. From what I see, PRMTX is probably legally considered a diversified fund due to its broad company diversification - although it is not a diversified fund as the term is commonly applied to funds.
https://www.sec.gov/news/headlines/mfnames.htm (PR)
https://www.sec.gov/rules/final/ic-24828.htm (Rule)
(I've been at this too long; it seems like only yesterday ...)
From your source “The rule requires a fund with a name suggesting that the fund focuses on a particular type of investment (e.g., "stocks" or "bonds") to invest at least 80% of its assets accordingly. Under Commission staff positions, these funds previously were subject to a 65% investment requirement.”
Not what I had in mind, but very interesting. PRMTX must than be legally obligated to have 80% in those 2 sectors? (Fortunately, it’s a spectacular fund).
What I had in mind was the rule referenced in a Zack’s article (cited below). The article’s so skimpy I was reluctant to post it. (And I’d previously assumed - incorrectly - that by law “diversified” funds could not concentrate heavily in one sector.)
(From Zacks) “Diversified funds cast a wide net for assets, catching bonds, cash, and stocks from many companies. Under federal law, a fund cannot tie more than 5 percent of its value in a single company's stock.” https://finance.zacks.com/difference-between-diversified-nondiversified-mutual-fund-5139.html
Now you know where that 80% number came from.
@JoJo26,
Thanks. I’ve emailed Dodge and Cox and directed them to stop using the word “growth” in describing any of their funds in light of your comment and msf’s above reference to “truth in labeling”. This should take place by tomorrow if not sooner. Quoting one well known individual, “Nobody disobeys my orders.”
With regard to D&C, whatever you prefer to call them, they run a good shop with relatively low fees. I’m always hesitant to sing their praises on the board because it’s not in the interest of long term holders like myself to have hot money flowing in and out of a fund (or funds) like theirs.
FWIW - Regards and thanks for commenting.
https://www.marketwatch.com/press-release/tcw-new-america-premier-equities-fund-marks-3-year-anniversary-with-5-star-overall-morningstar-ratingtm-2019-02-07
It will be interesting to see if it continues this out-performance. Never heard of the fund before, thanks for sharing.
Derf
Glad to hear you found folks’ suggestions helpful. Not sure what you’re looking for or where you are in the investment cycle. While it doesn’t seem like it today, an ability (disposition) to withstand the inevitable market shocks both here and abroad is one consideration. Doesn’t do any good to own a top performer if the first 35% spanking is going to find you standing out on a ledge mumbling incoherently to yourself (figuratively of course).
An overlooked fund that’s not a category leader, but would be a nice middle of the road growth fund, is Price’s PRSGX (Spectrum Growth). I happen to believe there’s a margin of safety in numbers. This one invests in about a dozen different TRP funds - several of them top flight. And, unexpectedly, it’s got 36% in foreign holdings. Lipper has it middle of the pack (3/5) on return. But it leads its Lipper’s category for capital preservation.
I realize most here will shun a fund like that. But if you’re more of a “set-it-and-forget-it” type - or just too busy to pay a lot of attention, I think it’s a great long term pick. One reason it lags its Lipper peers is the substantial foreign weighting (higher than the peers it’s being ranked against). But that will turn one of these days. Just a thought since you like TRP. I like them also for many reasons.
Hope you get a response on the TCW question.
°It is a very concentrated fund, +52% in the top ten holdings, +12% in the top holding, There's nothing wrong particularly about that except be very aware of what you're buying.
°The fund has a pretty short history (3 years). I'd like to see a longer performance history, more info on the manager, and more info on how the fund is managed.
°Expenses or should I say the expense ratio, is all that you can control when choosing funds and this one is a bit high given most of the other growth fund options out there.
°This is a small fund in terms of AUM, $87 million. Given the concentration of the portfolio you'd better hope that the manager is on his stock picking game.
So again I repeat, there's nothing inherently wrong here but be very aware of what you're buying.