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Dave Giroux Explains TCAF's Portfolio Construction
Thanks for sharing this link. I wanna like TCAF enough to buy it but its top 5 investments are even more concentrated than the S&P 500. And it’s 10times more expensive but that’s just being petty.
Kudos to Giroux for sitting and explaining the portfolio, which admittedly echoes much of how I view thie markets and are invested myself ... but boo/hiss to TRP for a lackluster and mediocre production value of the video. Felt like an amateur-hour production with horrid blocks of silence between question segments.
@bee, thank you for the link. Good interview from Giruox. The longer interview provides more discussion on sectors and companies he favors. Utility is a good example. Also why he does not like consumer staples and that new medication will improve lives and reduce junk food consumption.
This is an actively managed ETF. How is it being more tax efficient than index fund when there are turnover throughout the year?
I don't know if TCAF will be more tax-efficient than broad-based US large-cap index mutual funds (e.g., FXAIX, SWPPX, FSKAX, SWTSX). However, TCAF should be very tax-efficient due to the creation/redemption mechanism inherent in ETFs.
TCAF talks about utilities most of the time (7% sector exposure....3x the benchmark) but still holds 5 times as much technology as of June. Important viewpoint on eventual AI beneficiary being software. 100% agree. Skate to where the puck is going.
new medication will improve lives and reduce junk food consumption.
What a strange world we live in that we have to buy expensive drugs to save us from consuming stuff that should rarely go into our shopping carts.
I remember when 'Wheat Belly' was published 15 or so years ago and how the grain/junk food industry was playing dirty pool trying to discredit the author (a cardiologist) and plant seeds of doubt. Seeing how the industry was being so proactive in their nonsense, I presumed the book was probably on to something. But the book was eye-opening .... I went low-bad-carb for a year, lost a TON of weight, and haven't looked back. Since then i've learned the food industry will do ANYTHING to keep its customers hooked, and the pharma industry will do ANYTHING to address symptoms but not 'cure' the underlying causes ... both in the name of $$$$$$, of course.
By contrast, a longtime friend is on a GLP-1. They were never a chronic junk or processed food addict, worked out regularly, and generally had a healthy lifestyle yet struggled with weight and major appetite issues for decades. She started on GLP-1s last year and (last I heard) is down 25# and says they're feeling/looking like a new person in ways "not since college." I think GLP-1s are game changers, plus I'm seeing studies about how they're showing promise for other conditions, too.....and if GLP-1s can help metabolic issues, that can have a follow-on benefit for patients who don't need as many drugs for conditons, new medical devices, replacement knees/hips, etc. So in that regard I think Giroux is spot-on in this assessment. But it's great for patients, but bad for some companies.
TCAF talks about utilities most of the time (7% sector exposure....3x the benchmark) but still holds 5 times as much technology as of June. Important viewpoint on eventual AI beneficiary being software. 100% agree. Skate to where the puck is going.
I will still play utilities more than software companies for the AI theme. After all, software needs power for the computer to run it.
Besides the OEFs I own hold major software companies, so I'll defer to them for exposure.
@rforno, I think people like your friend are probably rare. I'll admit that observing other people's shopping carts is not a reliable survey. But, I think the food industry will keep the GLP-1 companies well supplied with customers at least until the drugs go generic.
@rforno, I think people like your friend are probably rare. I'll admit that observing other people's shopping carts is not a reliable survey. But, I think the food industry will keep the GLP-1 companies well supplied with customers at least until the drugs go generic.
Agree, sadly. It's part of the American culture, I think -- but that's a whole different line of discussion.
@rforno, I think people like your friend are probably rare. I'll admit that observing other people's shopping carts is not a reliable survey. But, I think the food industry will keep the GLP-1 companies well supplied with customers at least until the drugs go generic.
Agree, sadly. It's part of the American culture, I think -- but that's a whole different line of discussion.
@WABAC: because of DNC coming up, CNN had a documentary on with lots of scenes of the Chicago 1968 convention. Most striking thing to me and my wife was how skinny, almost scrawny, the young kids looked. The same slice of the population these days is either muscular or beefy to obese. Kids in elementary school in my day (the fifties) were not fat; this is not the case today. What has happened to cause this?
A recent article in The NY Times about an Iowa pig farmer converting his farm to mushroom production states that there are 4000 factory farms in Iowa. An Iowa farmer interviewed on CNN last night said it’s good for the earth to raise beef cattle. I suspect there’s a connection between the American diet and our obesity problem. I am not neutral on the issue: I think bacon is a carcinogen and avoid animal products, processed foods, and the like.
A recent article in The NY Times about an Iowa pig farmer converting his farm to mushroom production states that there are 4000 factory farms in Iowa. An Iowa farmer interviewed on CNN last night said it’s good for the earth to raise beef cattle. I suspect there’s a connection between the American diet and our obesity problem. I am not neutral on the issue: I think bacon is a carcinogen and avoid animal products, processed foods, and the like.
Indeed. Having eaten beef in Europe, South America, and Asia, it tastes totally different than American beef which often has been fed all sorts of crap and given all sorts of drugs to help provide 'greater yield' compared to those other regions ... such Frankenfoods definitely play a role in the obesity problems, even if they're not necessarily processed. The same with wheat, which is engineered and grown more for 'yield' and 'cost savings' than nutritional value -- the wheat of today, especially in the USA is NOT the wheat from 200 or 1000 years ago.
Is there a difference between organic chicken and regular chicken in California. I figure different states may have different rules and so I mentioned CA, not that everything sold in CA is made or grown in CA.
DG tells us he wants to outperform the market and be less risky. Wouldn’t that be the goal of EVERY portfolio manager? And really,,, he wants to be “differentiated “ but does not seem to be… I know the dude is legitimately a rock star but I clicked off after his first few statements.
DG tells us he wants to outperform the market and be less risky. Wouldn’t that be the goal of EVERY portfolio manager? And really,,, he wants to be “differentiated “ but does not seem to be… I know the dude is legitimately a rock star but I clicked off after his first few statements.
Yeah, the alpha and beta vernacular isn't something most retail investors understand.
At least in terms of PRWCX, he differs by zigging when others are zagging, doesn't embrace the herd mentality, is okay holding cash or cash-equivalents that can drag peformance, and really takes a controlled multi-year view versus a quarterly one. In other words, I think he's in the camp of "you win more by losing less" -- which if memory serves is the Charlie Ellis mindset and one of Capital Group's philosophies, too.
Speaking personally I don't care if I beat the topheavy (and tech-heavy) SPX ... I want to sleep well at night!
It is interesting he makes such a big deal out of GLP-1 but apparently has only a small % in Lilly and no NOVO. While detailed portfolio stats are not available except for 12/31 the most recent Quarterly fact sheet shows a persistent 17% in healthcare. In December it was similar but only LT 2% Lilly
Over weight technology, it will be interesting to see how he is going to be les risky than the market. The portfolio ( other than the utilities) seems similar to a lot of "High Quality" growth funds
His TCAF and PRWCX follow the same mantra of "you win more by losing less." I do not own TCAF but I watched it enough to know its behavior. I did not buy TCAF as it is not differentiated enough from PRWCX equity. But TCAF being small and new money coming in all the time, it probably gives DG more flexibility and in that sense, I probably should have diverted some $$$ from PRWCX to TCAF. I think Yogi owns TCAF and PYLD as a replication of PRWCX. He probably can comment better if TCAF has been better than PRWCX equity.
@soupkitchen and others. You might check out the VOX podcast of May 13 titled “The world after Ozempic.” I became interested after a young family member got a bootleg version from an online shop. He wasn’t willing to change his diet or do any exercise. The podcast clearly makes the link between the crummy food industry and the growing success of these drugs.
Rforno, I believe the software companies that will win the AI race are not household names yet. As viewed from a % gain perspective over the next 15 years.
Rforno, I believe the software companies that will win the AI race are not household names yet. As viewed from a % gain perspective over the next 15 years.
Agreed. But I'll bet most of 'em will get snapped up by the tech companies that *are* household names ... I always keep my ears pinned for interesting AI opportunities, but don't plan on doing a deep-dive to try and find them.
Comments
Underweight: Consumer Defensive and Financials
Kudos to Giroux for sitting and explaining the portfolio, which admittedly echoes much of how I view thie markets and are invested myself ... but boo/hiss to TRP for a lackluster and mediocre production value of the video. Felt like an amateur-hour production with horrid blocks of silence between question segments.
This is an actively managed ETF. How is it being more tax efficient than index fund when there are turnover throughout the year?
US large-cap index mutual funds (e.g., FXAIX, SWPPX, FSKAX, SWTSX).
However, TCAF should be very tax-efficient due to the creation/redemption mechanism inherent in ETFs.
By contrast, a longtime friend is on a GLP-1. They were never a chronic junk or processed food addict, worked out regularly, and generally had a healthy lifestyle yet struggled with weight and major appetite issues for decades. She started on GLP-1s last year and (last I heard) is down 25# and says they're feeling/looking like a new person in ways "not since college." I think GLP-1s are game changers, plus I'm seeing studies about how they're showing promise for other conditions, too.....and if GLP-1s can help metabolic issues, that can have a follow-on benefit for patients who don't need as many drugs for conditons, new medical devices, replacement knees/hips, etc. So in that regard I think Giroux is spot-on in this assessment. But it's great for patients, but bad for some companies.
Besides the OEFs I own hold major software companies, so I'll defer to them for exposure.
Edit: Giroux eschews the consumer staples sector. I have no clue if he consumes the snacks and junk foods from companies in that sector or not.
A recent article in The NY Times about an Iowa pig farmer converting his farm to mushroom production states that there are 4000 factory farms in Iowa. An Iowa farmer interviewed on CNN last night said it’s good for the earth to raise beef cattle. I suspect there’s a connection between the American diet and our obesity problem. I am not neutral on the issue: I think bacon is a carcinogen and avoid animal products, processed foods, and the like.
At least in terms of PRWCX, he differs by zigging when others are zagging, doesn't embrace the herd mentality, is okay holding cash or cash-equivalents that can drag peformance, and really takes a controlled multi-year view versus a quarterly one. In other words, I think he's in the camp of "you win more by losing less" -- which if memory serves is the Charlie Ellis mindset and one of Capital Group's philosophies, too.
Speaking personally I don't care if I beat the topheavy (and tech-heavy) SPX ... I want to sleep well at night!
Over weight technology, it will be interesting to see how he is going to be les risky than the market. The portfolio ( other than the utilities) seems similar to a lot of "High Quality" growth funds
It fell just as much as SP500 early this month
Maybe @Baseball_Fan knows …?.