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I have been in the closed VG VHCAX for years and been watching VG PRIMECAP also for years. I now have minimum+ in these reopened funds. As to why, I will worry about that later.
Eight or nine years of redemptions probably explains it.
BTW, those consistent redemptions have resulted in years and years of significant capital gains distributions. On an after-tax basis both of these funds have underperformed the S&P 500, by more than 100 bps a year for over a decade.
This almost feels like the moment when PRWCX announced closure and I snuck in before building a sizable position that's done okay by me .... I'd be inclined to get a toehold in it now, but not thrilled about having to create another account just for it, so not jumping anytime soon. Blergh.
Its heyday may be over? Last 5 years 2019-2023 or YTD it hasn't even kept up with the SP500 (VOO) Why pay ER .31 (VPMAX adm) vs ER .03 (VOO). On 200k that's $620 vs $60.
I am pretty certain it was 1992 when I jumped at the chance to buy re-opened low turnover Primecap shares for a taxable account. I felt fairly lucky, except SEQUX caused some fund envy. But of course, that envy disappeared in time. Other than MM holdings, VPMAX became my largest position - now ~13% of PV. Given the mediocre performance for several recent years, I certainly wouldn't mind if it reverted to its historical mean.
am wondering if this is a long awaited chance for a non-fundamental price spike to unload my unhealthy primecap overweight. not to mention the distaste of re-opening at mkt peaks. is there a site that tracks fund flow\sentiment vs statistical estimate of forward performance, or any such related phenom ? (and did the morningstar fund flows section vanish?)
minor note : since primecap does not have a sister etf at vanguard, my understanding is that any\all trading does not benefit from a shared tax structure. if all primecap does is buy from flows, the yield may go up via cash interest.
It’s not available yet at Schwab…. I’m wondering if they’re only going to make it available at Vanguard…. I am not going to open up a special account there just to get access.
This almost feels like the moment when PRWCX announced closure and I snuck in before building a sizable position that's done okay by me .... I'd be inclined to get a toehold in it now, but not thrilled about having to create another account just for it, so not jumping anytime soon. Blergh.
VPMAX has been a fine fund since inception but since I was then late to the game I invested in BIAWX to complement FCNTX. Pull up a 10-yr chart. Beat me with a stick if you want but I have since sold FCNTX and put those funds into FXAIX.
Buying into the S&P 500 seems like buying into megacaps but then adding 300 "smaller" companies for what? Seasoning? Diversification?
If the decision is to go with megacaps, then why bother with that dreck? Or if the decision is to diversify across the market (despite smaller companies having not fared as well as megacaps in the past), consider buying into funds that truly diversify.
MGC has outperformed VFIAX since inception, Jan 2008 (10.50% vs. 10.26%), with slightly lower volatility (16.00% vs. 16.14% std dev), and a 3 year rolling coefficient of correlation ranging between 0.997 and 0.999 (nearly perfect tracking).
The divergence between mega caps and the rest of the market has been most apparent in the past five years (give or take). Go with the flow or "revert to the mean"?
Buying into the S&P 500 seems like buying into megacaps but then adding 300 "smaller" companies for what? Seasoning? Diversification?
If the decision is to go with megacaps, then why bother with that dreck? Or if the decision is to diversify across the market (despite smaller companies having not fared as well as megacaps in the past), consider buying into funds that truly diversify.
For me FCNTX had become for all intent and purpose an S&P 500 clone albeit with active management and a higher ER. It currently has 315 holdings. Also I'm not sure how much longer Danoff will remain in charge.
As for BIAWX I invested initially because of the management team, a concentrated focus (currently 33 holdings) and the ESG theme of the fund. To each their own, you do you.
All figures through June 18, 2024. The last (10yr) is a hypothetical number provided by S&P Global, since the launch date of the Top 50 index was Nov 30, 2015.
All figures through June 18, 2024. The last (10yr) is a hypothetical number provided by S&P Global, since the launch date of the Top 50 index was Nov 30, 2015.
Yes but how many people invest in the Top 50-ish? Is there any ETF or OEF that has decent volume along those lines? I haven't looked, but I doubt it. (BBLU maybe?) Ergo pretty much everyone buys the index b/c that's what their retirement plans offer.
(I prefer more concentrated funds myself, fwiw saying.)
Is there any ... OEF that has decent volume along those lines?
Why should volume of an OEF matter? Perhaps availability matters, but why volume?
Regarding availability, what that seems to be saying is that S&P 500 funds are a poor person's substitute for less widely available funds that track mega caps.
Edit: Ironically enough, there is an ETF that tracks the S&P 100 with ticker OEF.
XLG tracks the S&P Top 50. It has about 40% of the trading volume (in shares) of DIA, though of course a much lower dollar volume.
Is there any ... OEF that has decent volume along those lines?
Why should volume of an OEF matter? Perhaps availability matters, but why volume?
Regarding availability, what that seems to be saying is that S&P 500 funds are a poor person's substitute for less widely available funds that track mega caps.
Edit: Ironically enough, there is an ETF that tracks the S&P 100 with ticker OEF.
XLG tracks the S&P Top 50. It has about 40% of the trading volume (in shares) of DIA, though of course a much lower dollar volume.
Sorry. my volume question was related to ETFs. Actually, AUM probably would be more useful data for both types, come to think of it.
And thx for the reminder - I remember OEF now that you mention it, but never heard of XLG...that looks like a good one!
Any comments on Primecap Core vs Primecap? I am considering adding Primecap Core to complement my current stake in Capital Opportunity fund. Compared to VHCAX, VPCCX leans more toward Large Caps (72% vs 66%) and Value (25% vs 20%), which should make it a good fit for my portfolio.
Primecap started out as a mid cap growth, evolving over time into a large cap that straddled the growth/blend boundary. Core launched as a large cap blend as I recall. It has usually trailed Primecap in performance, as growth has generally led value/blend for many years. I tend to think of Primecap as an AIO, covering both VPCCX and VHCAX.
As you've no doubt noticed, all three funds invest about 1/8 of their portfolio abroad. I happen to like this (bigger pool to fish in), though others prefer to invest strictly domestically.
If you look at M* Portfolio pages, both Primecap VPMCX / VPMAX and Primecap Core VPCCX are close to the blend-growth borderline. Both have the same 5 managers. But only the Investor class VPCCX is available for the latter. As being run now, differences may be mostly only due to their ERs.
BTW, M* will soon be tweaking its 9-Box classifications to reduce the natural growth-drift in the US market.
@Mark have you taken a look at FCNTX lately? Certainly not a SPY clone today. He’s made big bets on META at 14% allocation and BRKB at 9%. Has outperformed over last 1 and 3 year periods ….hoping Danoff doesn’t retire soon
@MikeW - I haven't looked closely lately. At the time I sold FCNTX I considered the retirement of Tillinghast at FLPSX, who I thought Fidelity might have to pry his cold dead hands off the keyboard, and wondered how much longer Danoff would stick around. I was, and still am, trying to consolidate my portfolios into something easy enough for my kids to take over and deal with. Booking it into the S&P 500 seemed like an easy and prudent move. That's all.
Comments
BTW, those consistent redemptions have resulted in years and years of significant capital gains distributions. On an after-tax basis both of these funds have underperformed the S&P 500, by more than 100 bps a year for over a decade.
is there a site that tracks fund flow\sentiment vs statistical estimate of forward performance, or any such related phenom ?
(and did the morningstar fund flows section vanish?)
minor note : since primecap does not have a sister etf at vanguard, my understanding is that any\all trading does not benefit from a shared tax structure.
if all primecap does is buy from flows, the yield may go up via cash interest.
In M* Performance tab, fund flows are shown at the bottom of the charts.
If the decision is to go with megacaps, then why bother with that dreck? Or if the decision is to diversify across the market (despite smaller companies having not fared as well as megacaps in the past), consider buying into funds that truly diversify.
MGC has outperformed VFIAX since inception, Jan 2008 (10.50% vs. 10.26%), with slightly lower volatility (16.00% vs. 16.14% std dev), and a 3 year rolling coefficient of correlation ranging between 0.997 and 0.999 (nearly perfect tracking).
Portfolio Visualizer correlation (and performance) analysis of MGC and VFIAX
The divergence between mega caps and the rest of the market has been most apparent in the past five years (give or take). Go with the flow or "revert to the mean"?
As for BIAWX I invested initially because of the management team, a concentrated focus (currently 33 holdings) and the ESG theme of the fund. To each their own, you do you.
Reason: Lots and lots and lots of people buy the SP500. The more people that buy the SP500 the more those companies/SP500 go up. Supply/demand.
By that reasoning, the S&P 500 (TR) should be outperforming the S&P Top 50 (TR), and yet ...
500 Top 50
YTD 15.82% 22.62%
1yr 26.33% 34.10%
3yr 11.33% 14.84% (annualized)
5yr 15.35% 18.75% (annualized)
10yr 12.93% 15.11% (annualized)
All figures through June 18, 2024. The last (10yr) is a hypothetical number provided by S&P Global, since the launch date of the Top 50 index was Nov 30, 2015.
https://www.spglobal.com/spdji/en/indices/equity/sp-500-top-50/?currency=USD&returntype=T-#overview
(I prefer more concentrated funds myself, fwiw saying.)
Why should volume of an OEF matter? Perhaps availability matters, but why volume?
Regarding availability, what that seems to be saying is that S&P 500 funds are a poor person's substitute for less widely available funds that track mega caps.
Edit: Ironically enough, there is an ETF that tracks the S&P 100 with ticker OEF.
XLG tracks the S&P Top 50. It has about 40% of the trading volume (in shares) of DIA, though of course a much lower dollar volume.
And thx for the reminder - I remember OEF now that you mention it, but never heard of XLG...that looks like a good one!
M*, Primecap: The Shades of Difference Among Its Funds
As you've no doubt noticed, all three funds invest about 1/8 of their portfolio abroad. I happen to like this (bigger pool to fish in), though others prefer to invest strictly domestically.
BTW, M* will soon be tweaking its 9-Box classifications to reduce the natural growth-drift in the US market.