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FT cautions me not to copy & paste - so I say - note the last couple of paragraphs about a new TRP division called T Rowe Price Investment Management (TRPIM), scheduled to be live next year.
I swear, in the CNBC interview, at 1:28, he says he’s lowered his equity allocation “100-200 BIPS”. What is that? The FT article says from 70% equities down to mid 50s. So, there you go, a BIP is 0.1%. Give or take.
Good stuff. Hard to believe Giroux has been running the fund for near 15 years. I have a modest weighting in PRWCX along with about the same amount in DODBX.
Read D&C’s semi-annual last evening. They have the fund invested 66% in equities. Their stocks overall have a much lower average PE than the S&P. In fact, they hold a 4% short position on the S&P which they see as overvalued. They like financials (which do well when interest rates are rising) but have sold some off recently. Also overweight energy.
Here’s a brief (possibly “suspect”) quotation: “The equity portfolio’s composition is very different from the overall market, and trades at a meaningful discount to both the broad-based market and value universe: 13.9 times forward earnings compared to 22.3 times for the S&P 500 and 17.9 times for the R1000V. Stocks that benefit from rising interest rates are currently trading at particularly low relative valuations, and represent an area of emphasis for the portfolio.”
Not to cast aspersions, and remember I also hold a large PRWCX position, but it's also worth remembering such OEF reports are, annoyingly, usually at least 2 months old by the time they come out.
OEF reports are, annoyingly, usually at least 2 months old by the time they come out.
Right. Seems to me D&C emailed me the link to the semi-annual within the past few days. But I could be wrong. Agree that the June 30 date on the D&C report is pretty old. Looks like the FT article is recent, bearing an August 25 date. Yet, when I look at the CNBC clip @Sven posted, it’s dated April 23. So, apparently, Giroux was already scaling back on equities and publicly stating that as far back as April.
Unlike active managed And passively managed ETFs, open-ended mutual funds are required to report their holdings every 6 months in semi-annual and annual reports. The delay is necessary to avoid front-running the fund manager’s trading that may run up the stock prices. The business is cut throat. That is particularly true in thinly traded stocks in smaller cap funds.
Actually selling is harder on a timely basis. Sitting on large cash position is a drag on performance that may reflect poorly on the fund manager, especially in bull markets. Saw an interview with Giroux that he deployed his cash and bought many stocks, including GE during the height of COVID. Right now I cannot seem to located that footage. But it revealed TRP trading strategies - quick and deliberate.
Sounds about right @Sven. According to Investopedia they have up to 60 days after a quarter’s end to file their holdings with the SEC. If this is tantamount to a “public release”, than the near 2-month delay in D&C providing the semi-annual report to investors makes sense.
The current Barron’s contains an article “A fresh Batch of Active ETFs“ written by some guy named Lewis Braham. In it he mentions the issue of front-running when fund holdings are revealed too early. Different companies and managers have differing views. But TRP was singled out in particular as one house that likes to withhold such information as long as legally possible. I’d be willing to bet D&C is another.
Agree with previous comments regarding OEF holdings disclosures from TRP. There is not a lot of advantage for an individual investor to be gained from rather stale lists of stocks held. For ETFs, as @hank alludes to, the problem for the managers is tricky. ARK funds practically advertise their trades daily while Alger has two "semi-transparent" actively-managed ETFs, FRTY and ATFV. Disclosure of the Alger holdings is quarterly, I believe. I have been building a stake in FRTY because it's managed by proven winner Amy Zhang whose SCG and MCG OEFs are either closed or open to big machers only.
Fidelity and T. Rowe Price opted for semitransparent structures that don’t disclose all their holdings daily for ETF
I read elsewhere where a manager described it is challenging to build a sizable positions without revealing what you are buying. Often it takes several months to buy say X millions shares of company Y increments without causing the price to spike upward.
BRKB is even less transparent until W. Buffet files them in their reports. An an individual investor, that is why you hire these fund managers to run your funds.
Just a comment that anyone paying attention/owning, PRWCX would have noticed a definite change had occurred at LEAST early in the year as PRWCX started to lag a little (compared to earlier). The fund seemingly became more defensive/less volatile than had been the case. I think Giroux was a little early, but was apparently pulling in the reins on 'risk' well before now. I suspect a lot of this aforementioned "cutting" was taking place long ago. If he IS cutting further, I'd be interested to know what is replacing the equity!
Just a comment that anyone paying attention/owning, PRWCX would have noticed a definite change had occurred at LEAST early in the year as PRWCX started to lag a little (compared to earlier). The fund seemingly became more defensive/less volatile than had been the case. I think Giroux was a little early, but was apparently pulling in the reins on 'risk' well before now. I suspect a lot of this aforementioned "cutting" was taking place long ago. If he IS cutting further, I'd be interested to know what is replacing the equity!
What's replacing the equity? Apparently, CASH. Over 10% cash in the portf. by now, per Morningstar. Looks like he thinks the Market is overpriced, and he's right. In the meantime, we shareholders lose out on the current batch of lofty, frothy heights being reached by this over-stretched market. Seems to me that my stuff's been range-bound all year--- except for PRIDX, VERY recently. But I will, nevertheless, stick with Giroux.
Bond divs coming on 31st August...... Holdings: BRUFX PRWCX PRSNX RPSIX PRIDX PRDSX PTIAX ENIC.
The link I provided above (Fidelity) showed 68% in equity as of 6/30/21, which is the typical range he runs the fund. Comparing to the composition of the portfolio to a year ago, there is more defensive positions (11% utility) and cash.
Here's a thought...you might want to access the TRP site (What? There is one? Who knew?) to get the latest published stock allocations as of 07/31/21 which was (if my addition is correct) 70.4%.
TRP website lists the top 10 end of month holdings around a week or so into the following month. Not sure why TRP has not listed the asset allocation for PRWCX on the website recently while most other TRP funds do?
Having caddied from the ages of 9-16 and played since I could walk, I've caddied for, seen, and played with a LOT of golfers.
So I know there's a LOT of truth in your comment for a LOT of people who attempt to play the game (and those who sadly end up in their groups).
Don't even get me started on what Ladies Day at our club looked like circa late 60's/early 70's. Note however their outfit color coordination, down to the tees in their shoe strings, was impeccable.
Here's hoping you and the rest of those walk spoilers stay off the courses!
Here is the PRWCX portfolio as of 8/31/2021 from the TRP website.
Portfolio $52.23 billion Total Net Assets as of 8/31/2021 Asset Allocation Domestic Stock 68.90% Other 28.00% Domestic Bond 1.40% Foreign Stock 0.90% Convertibles 0.80%
Top 10 Holdings 8/31/2021
Microsoft 6.90% Amazon.com 5.70% GE 4.43% Alphabet Class C 3.29% Danaher 3.24% Marsh & McLennan 3.16% PNC Financial Services Group 3.12% Yum! Brands 3.07% UnitedHealth Group 3.02% Thermo Fisher Scientific 2.78%
Some of those top holdings are just the companies I love to hate. Crap. But I can't pull out now.
“… for those … who might be wondering, if you put a dollar into the S&P, 41 cents goes toward Apple, Microsoft, Google, Amazon, and Facebook, with 59 cents going into the other 495 names.”
Bill Fleckenstein - “Market Rap” (paid subscription) 9/14/21
Some of those top holdings are just the companies I love to hate. Crap. But I can't pull out now.
“… for those … who might be wondering, if you put a dollar into the S&P, 41 cents goes toward Apple, Microsoft, Google, Amazon, and Facebook, with 59 cents going into the other 495 names.”
Bill Fleckenstein - “Market Rap” (paid subscription) 9/14/21
Exactly why I hate market-cap weightings in funds and indices!!
No fund I own holds 100% stuff I agree with, but I am more than comfortable with Giroux's team and PRWCX's investing style to rest easy while sitting on a large slug of it.
Comments
https://cnbc.com/video/2021/04/23/t-rowe-prices-david-giroux-we-are-underweight-equities.html
TRP division called T Rowe Price Investment Management (TRPIM), scheduled to be live next year.
1 bp = 0.01%
https://www.investopedia.com/ask/answers/what-basis-point-bps/
https://fundresearch.fidelity.com/mutual-funds/composition/77954M105?type=o-NavBar
Read D&C’s semi-annual last evening. They have the fund invested 66% in equities. Their stocks overall have a much lower average PE than the S&P. In fact, they hold a 4% short position on the S&P which they see as overvalued. They like financials (which do well when interest rates are rising) but have sold some off recently. Also overweight energy.
Here’s a brief (possibly “suspect”) quotation: “The equity portfolio’s composition is very different from the overall market, and trades at a meaningful discount to both the broad-based market and value universe: 13.9 times forward earnings compared to 22.3 times for the S&P 500 and 17.9 times for the R1000V. Stocks that benefit from rising interest rates are currently trading at particularly low relative valuations, and represent an area of emphasis for the portfolio.”
LINK to June 30, 2021 Report /// DODBX
Apologies for any thread drift. Hard for me to view one fund without comparing it to the other, as both are integral to my approach.
Here’s Sven’s link again. https://www.cnbc.com/video/2021/04/23/t-rowe-prices-david-giroux-we-are-underweight-equities.html
Actually selling is harder on a timely basis. Sitting on large cash position is a drag on performance that may reflect poorly on the fund manager, especially in bull markets. Saw an interview with Giroux that he deployed his cash and bought many stocks, including GE during the height of COVID. Right now I cannot seem to located that footage. But it revealed TRP trading strategies - quick and deliberate.
The current Barron’s contains an article “A fresh Batch of Active ETFs“ written by some guy named Lewis Braham. In it he mentions the issue of front-running when fund holdings are revealed too early. Different companies and managers have differing views. But TRP was singled out in particular as one house that likes to withhold such information as long as legally possible. I’d be willing to bet D&C is another.
Link to Barron’s Article (subscription required): https://www.barrons.com/articles/capital-groups-american-funds-is-finally-getting-into-etfs-51630089111
Note: The online article carries a different title from the print version which I read. Same content.
BRKB is even less transparent until W. Buffet files them in their reports. An an individual investor, that is why you hire these fund managers to run your funds.
Bond divs coming on 31st August......
Holdings: BRUFX PRWCX PRSNX RPSIX PRIDX PRDSX PTIAX ENIC.
https://www.troweprice.com/personal-investing/tools/fund-research/PRWCX?src=USIFundRedirect&adobe_mc_sdid=SDID=7593B66782D33635-0C1AF59A7D98C5A2|MCORGID=D15D15F354F647770A4C98A4@AdobeOrg|TS=1630353056&adobe_mc_ref=https://www.google.com/#content-portfolio
And if you are a poster/investor questioning Giroux's allocation decisions, you might want to go play a round of golf and think that through a bit.
“But Giroux has cut the fund’s equity exposure down from about 70 per cent at the market low of 2020 to the mid-50s per cent level now …”
Lipper, which is usually pretty accurate, still has it at 70%.
So I know there's a LOT of truth in your comment for a LOT of people who attempt to play the game (and those who sadly end up in their groups).
Don't even get me started on what Ladies Day at our club looked like circa late 60's/early 70's. Note however their outfit color coordination, down to the tees in their shoe strings, was impeccable.
Here's hoping you and the rest of those walk spoilers stay off the courses!
https://stockcharts.com/freecharts/perf.php?FPURX,VWENX,VBAIX,FPACX,DODBX,JABAX,JAGIX,OAKBX,PRWCX
Portfolio
$52.23 billion
Total Net Assets as of 8/31/2021
Asset
Allocation
Domestic Stock
68.90%
Other
28.00%
Domestic Bond
1.40%
Foreign Stock
0.90%
Convertibles
0.80%
Top 10 Holdings 8/31/2021
Microsoft
6.90%
Amazon.com
5.70%
GE
4.43%
Alphabet Class C
3.29%
Danaher
3.24%
Marsh & McLennan
3.16%
PNC Financial Services Group
3.12%
Yum! Brands
3.07%
UnitedHealth Group
3.02%
Thermo Fisher Scientific
2.78%
https://morningstar.com/funds/xnas/prwcx/portfolio
Bill Fleckenstein - “Market Rap” (paid subscription) 9/14/21
No fund I own holds 100% stuff I agree with, but I am more than comfortable with Giroux's team and PRWCX's investing style to rest easy while sitting on a large slug of it.