Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Barely down, by just a penny/share. Figure it had to be because of short-covering against its own holdings, on this record day??? Poopy. PRWCX closed to new investors. TRP.
This often is the life of an allocation fund...remember PRWCX is not an all equity fund. It's 68% allocation to equities is on the low side for this fund IMHO. Cash is 4.5% and "other" is over 5%. Anyone have a clue what "other" might be?
Hang in there Crash...This fund YTD has returned 6.26% significantly out distancing its peers.
Here it is compared against the S&P 500 since 1986:
Is there any way to buy into this fund? I was too late to the party unfortunately. Is there a good alternative that anyone would recommend? I'm in FPACX but it has greatly underperformed PRWCX.
Is there any way to buy into this fund? I was too late to the party unfortunately. Is there a good alternative that anyone would recommend? I'm in FPACX but it has greatly underperformed PRWCX.
Hank is correct: "This fund--- PRWCX--- walks on water." ... I can tell you that my other fund in the same category (according to Morningstar) is MAPOX from Mairs and Power, out of St. Paul, MN. YTD, PRWCX is +6.22% while MAPOX is up +3.07%. And MAPOX pays divs quarterly, while PRWCX pays everything only in one slug, in December. Looking back 10 years, MAPOX is up +8.52%, in top 11 percentile in-category. In the same 10-year period, PRWCX is up by +9.91%, in top 1% in-category. So, you can see that over the long-haul, that category's best performers are bunched-up, near the top of the heap. In the case of MAPOX, $10,000 has in that time frame become $22,658 while the same amount in PRWCX has grown to $25,730.
MAPOX is great but a bit too conservative for me right now mid-career. I see it kind of like VWINX in terms of boring stability ... down the road when I retire, if MAPOX continues to perform, I definitely see it playing a role in my retirement allocations.
Each year I add a large slug to PRWCX the day it trades ex-distribution in December. But I do wish it paid out semi-annually so I could accumulate more shares if volatility cooperates ... but whatever. Still a fantastic fund and one of my top performers. Wish I had also started a position in my Roth when I bought it for taxable, though. :/
Bit short on time. But would love for somebody to dissect this fund and explain in detail how this fund continues to chalk-up double digit (or near double-digit) returns given its positioning by Price as “... a conservative value approach” to equity investing. The fund currently holds 4% in Price’s institutional money market fund. It is huge at over 30 Bil AUM (Lipper). That’s double DODBX or OAKBX according to the Lipper numbers I consulted. A glance at the top 10 holdings displays nothing remarkable save for the 4% money market position. It’s got automotive, financial and (a bit surprising - Microsoft) within the top 10. Fees are typical of other TRP funds at about 0.7%.
I’ve owned a small chunk of the fund for most of the 25 years I’ve been with Price. Have seen the fund go from a small opportunist (and nimble) mid-cap fund to a large hard to maneuver blue chip fund to whatever it’s morphed into today. Recent reading indicates they’ve been selling puts on equity funds. I’m not well versed on options, but gather that they limit both the potential upside and potential loss on a stock by doing this. The put-option also apparently generates additional income.
I’d be interested in knowing whether investor flows into the fund continued after it closed its doors to new investors. That’s hard to know, since AUM would have increased by benefit of fund performance as well. But if money is continuing to flow in that would partially explain (not completely) the fund’s sizzling performance, since that new money might well be driving up the individual assets which the fund owns - and would be buying with the new money.
Price has a great research and analytical team. I doubt there’s few better in the mutual fund universe. And, they do tilt their investment approach one way or the other depending on their very thorough macro economic readings. By now, the fund has become a bit of a flagship for the firm, so likely to receive their best money management people going forward. A loyal stable investor base goes a long way in aiding performance, as the need to sell holdings during market downturns is lessened.
I also hold OAKBX- which I believe should be about equal in performance. However, it has done nowhere near as well for several years. But OAKBX did survive the last bear market (‘07-‘09) with significantly smaller losses. And, I believe it would likely sustain smaller losses in another major downturn.
Some of the funds mentioned in this thread with this CHART , which begins with 2015 to date. 2015 and 2016 included, as the U.S. equity markets were doing a bit of funk during this period. I also included FBALX and FPURX , as both have excellent long term annualized returns in the Moderate Allocation category.
Recent reading indicates they’ve been selling puts on equity funds. I’m not well versed on options, but gather that they limit both the potential upside and potential loss on a stock by doing this. The put-option also apparently generates additional income.
Selling put options doesn't limit anything. They're giving someone else the "option" to sell them equities at a specific price, presumably lower than when the sold them, until a specific date.
If the specific stocks go up or sideways they earn the money from selling the option. If the market goes below the strike price then they buy the stock at the agreed price. Losses are unlimited less what they made for selling the option.
Presumably they've sold the option at a price they'd be willing to buy more but I'd guess they believe most of the options will expire worthless and they're just trying to earn a little extra income.
I understand a new TRP Capital Appreciation Income fund being discussed. Income (from higher allocation of bond and other instruments) is the primary focus similar to that of Vanguard's Wellesleye Income fund, VWIAX.
I understand a new TRP Capital Appreciation Income fund being discussed. Income (from higher allocation of bond and other instruments) is the primary focus similar to that of Vanguard's Wellesleye Income fund, VWIAX.
Barely down, by just a penny/share. Figure it had to be because of short-covering against its own holdings, on this record day??? Poopy. PRWCX closed to new investors. TRP.
I can't believe how short-term oriented this forum has become. SMFH
@JoJo26 I don't think short-term is the norm here. However, if most of us were noting daily changes in the low cents range, than one should expect a great number of folks who have, or will have a serious GERD's (acid reflux) problem. The exception might be if we were at a penny stock forum. As to PRWCX, versus dropping a penny yesterday; let us use the appropriate math...... 30.04 -0.01 (-0.03%) 08/21/18 One penny is not of much benefit unless one knows the percentage relationship to the NAV price, eh? Heck, 1 cent on a $30 NAV could be software rounding function. Nuff said.....
@ JoJo26: You said, "I can't believe how short-term oriented this forum has become." I couldn't agree more. Its not good enough to has a fund like PRWCX with outstanding performance results over the last fifteen year. A number of MFO Members like to hold niche funds that slice and dice straight forward indexes into so called risk adjusted vehicles that they believe will protect them in times of market downturns. They confuse risk with volatility and are prone to buy into MPT lock stock and barrel, own way to many funds. For some of our members its not fashionable to hold simple haystack funds. They fall victim to funds companies working overtime creating every kind of exotic fund under the sun. Remember, its not risk adjusted returns you take to the bank, its real returns, how much did I make on any particular investment.
Selling put options doesn't limit anything. They're giving someone else the "option" to sell them equities at a specific price, presumably lower than when the sold them, until a specific date.
With a covered call, if the security falls in price, you lose - call isn't exercised and your holding goes down in value. If the security rises above the strike price, you'll be forced to sell at that price, thus limiting your gain.
With a covered put, if the security rises in value, you lose - the put won't be exercised and you're stuck with unlimited loss potential on the short. If the security falls below the strike price, you'll be forced to buy at that price. That effectively closes out your short position, thus limiting your gain.
I probably had it turned around. Must be covered calls they use. From my previous understanding, they do sacrifice upside potential in return for limiting the downside. And they earn income in the process.
I once posted directly from their fund report (several years ago) how they were doing it at the time. But may no longer so doing. At any rate, 68% equity and the rest in bonds and cash. Sure would like to understand the process that allows them to outrun nearly everyone else.
Barely down, by just a penny/share. Figure it had to be because of short-covering against its own holdings, on this record day??? Poopy. PRWCX closed to new investors. TRP.
I can't believe how short-term oriented this forum has become. SMFH
Did you mean to say that we are not keeping our eye on the ball? Not even more aware of long-term performance and risk? I don't follow your non-sequitur. I just made an observation: my otherwise splendid holding (PRWCX) was a disappointment on a very good day for the markets. My fund is doing rather well, and has been--- for YEARS. Is that long-term enough for you? On a day when a shareholder would have every reason to anticipate that the fund would RISE, it fell. That's all I said. .....Sounds like some others don't like the thread I started, too. Well, now..... I think I've just responded in the most appropriate and reasonable way I can. You don't like my thoughts? Move on. I promise that I won't miss you. And what is SMFH? Some of us here prefer actual words, that carry actual meanings.
I understand a new TRP Capital Appreciation Income fund being discussed. Income (from higher allocation of bond and other instruments) is the primary focus similar to that of Vanguard's Wellesleye Income fund, VWIAX.
Why would you anticipate it would rise, necessarily? Depends on what it holds. I mean, by definition.
Maybe for a given period it had some GE. Or Tesla. Or similar. If you want index behavior, get an index.
I'm w/ cranky Ted about short-term obsessing.
And just who are the ones obsessing? I made a remark. Sounds like a bunch here don't think I should expend the effort. This thread has become a a series of REACTIONS. not contributions. Who will be the next one to react? Come one, come all.
If you don't want responses, don't post. Most of us never note that our given fund is down seven-tenths of a percent in a day compared w/ some broad index, or if we do, we just chalk it up to some individual holding (perforce).
All remarks welcome. But what's the point of making them if not to get (even rude) feedback?
Missed in all the brickbats here is that PRWCX is a top-notch fund from a top-notch fund family. I’ve owned it nearly since inception. @Crash has owned it for close to a decade. Many others in the discussion either own it or wish they did.
A penny’s variation in a fund’s NAV on a single day is short-term focus for sure. I don’t know why @Crash singled the fund out for attention on Tuesday. But, considering the number of threads here that often have little / nothing to do with mutual funds, his sin appears slight.
Some of us just enjoy discussing the workings of funds - particularly the ones we own. To me, saying something like “the fund has outperformed every year for 15 years” adds little to an understanding of the fund or of investing. Anyone can go to M*, Lipper, or another data base, list funds by category, and quickly learn how various funds in different categories have performed. And I suspect that’s about all some think there is to investing ... buy those funds that have done better than their peers over time. If that’s all you as an investor want / need, it’s fine with me. But to some of us the game is infinitely more interesting if we dissect the fund - looking for the reasons the fund has worked so well (or, sometimes, why it hasn’t).
No one needed to read this thread. There’s plenty of other options to persue here. Ted, alone, generously initiates more threads most every day than @Crash and many others do over the course of a year. (And I’m sure he doesn’t mean to dismiss this single thread as totally irrelevant as compared to all those he posts.)
But clearly, all remarks are NOT welcome. So, in light of that, do I need or want to be here any longer? Sorry to all of you for not creating instead a thread that dazzles and impresses with professional and technical savvy and erudition. Stick it up your ass. Some folks were attentive and polite.
>> the game is infinitely more interesting if we dissect the fund - looking for the reasons the fund has worked so well
This for sure, plus the uncovering of worthy new stuff. Good forum in those regards. I myself think this particular fund has been puhlenty dissected here already, and other info available online, as you note.
@Crash >> Barely down, by just a penny/share. Figure it had to be because of short-covering against its own holdings, on this record day??? Poopy. >> I just made an observation: my otherwise splendid holding (PRWCX) was a disappointment on a very good day for the markets. >> all remarks are NOT welcome. So, in light of that, do I need or want to be here any longer?
Man, what would have been your dream responses?
You posted that this superb holding (yes, Hank, that fact is regularly acknowledged) was down a cent, out of $30, on an up day. You thought it might be from short covering or something (seems unlikely to me). And later you termed that a disappointment (!).
Ted and JoJo felt that this thinking sounded unduly short-term; I concurred.
Then you got bent about these responses.
So what were you hoping for? Handholding? k, I am sorry it dropped inexplicably. Maybe check only every month, or three.
Part of the utility (and the pleasure) here is pushback. Does negative kibitzing mean you are unable to feel welcome? Huh?
As for your last question, only you can decide. Of course.
Comments
Hang in there Crash...This fund YTD has returned 6.26% significantly out distancing its peers.
Here it is compared against the S&P 500 since 1986:
Hope that helps...
otoh, anyone can do what I do, if with less diversity: Go 50-50 or 60-40 (either direction), or whatever suits, divided b/w DSENX and PONAX.
MAPOX is great but a bit too conservative for me right now mid-career. I see it kind of like VWINX in terms of boring stability ... down the road when I retire, if MAPOX continues to perform, I definitely see it playing a role in my retirement allocations.
Each year I add a large slug to PRWCX the day it trades ex-distribution in December. But I do wish it paid out semi-annually so I could accumulate more shares if volatility cooperates ... but whatever. Still a fantastic fund and one of my top performers. Wish I had also started a position in my Roth when I bought it for taxable, though. :/
I’ve owned a small chunk of the fund for most of the 25 years I’ve been with Price. Have seen the fund go from a small opportunist (and nimble) mid-cap fund to a large hard to maneuver blue chip fund to whatever it’s morphed into today. Recent reading indicates they’ve been selling puts on equity funds. I’m not well versed on options, but gather that they limit both the potential upside and potential loss on a stock by doing this. The put-option also apparently generates additional income.
I’d be interested in knowing whether investor flows into the fund continued after it closed its doors to new investors. That’s hard to know, since AUM would have increased by benefit of fund performance as well. But if money is continuing to flow in that would partially explain (not completely) the fund’s sizzling performance, since that new money might well be driving up the individual assets which the fund owns - and would be buying with the new money.
Price has a great research and analytical team. I doubt there’s few better in the mutual fund universe. And, they do tilt their investment approach one way or the other depending on their very thorough macro economic readings. By now, the fund has become a bit of a flagship for the firm, so likely to receive their best money management people going forward. A loyal stable investor base goes a long way in aiding performance, as the need to sell holdings during market downturns is lessened.
I also hold OAKBX- which I believe should be about equal in performance. However, it has done nowhere near as well for several years. But OAKBX did survive the last bear market (‘07-‘09) with significantly smaller losses. And, I believe it would likely sustain smaller losses in another major downturn.
If the specific stocks go up or sideways they earn the money from selling the option. If the market goes below the strike price then they buy the stock at the agreed price. Losses are unlimited less what they made for selling the option.
Presumably they've sold the option at a price they'd be willing to buy more but I'd guess they believe most of the options will expire worthless and they're just trying to earn a little extra income.
Yes- though they postponed the release of the fund several months ago, citing 'market conditions' if I remember correctly.
Anything that causes itching, sure, avoid. I apply salve of outperformance, hoping it continues to work.
I don't think short-term is the norm here. However, if most of us were noting daily changes in the low cents range, than one should expect a great number of folks who have, or will have a serious GERD's (acid reflux) problem. The exception might be if we were at a penny stock forum.
As to PRWCX, versus dropping a penny yesterday; let us use the appropriate math......
30.04 -0.01 (-0.03%) 08/21/18
One penny is not of much benefit unless one knows the percentage relationship to the NAV price, eh? Heck, 1 cent on a $30 NAV could be software rounding function.
Nuff said.....
https://www.schwab.com/active-trader/insights/content/manage-risk-covered-calls-and-covered-puts
With a covered call, if the security falls in price, you lose - call isn't exercised and your holding goes down in value. If the security rises above the strike price, you'll be forced to sell at that price, thus limiting your gain.
With a covered put, if the security rises in value, you lose - the put won't be exercised and you're stuck with unlimited loss potential on the short. If the security falls below the strike price, you'll be forced to buy at that price. That effectively closes out your short position, thus limiting your gain.
I once posted directly from their fund report (several years ago) how they were doing it at the time. But may no longer so doing. At any rate, 68% equity and the rest in bonds and cash. Sure would like to understand the process that allows them to outrun nearly everyone else.
.....Sounds like some others don't like the thread I started, too. Well, now..... I think I've just responded in the most appropriate and reasonable way I can. You don't like my thoughts? Move on. I promise that I won't miss you. And what is SMFH? Some of us here prefer actual words, that carry actual meanings.
https://www.sec.gov/Archives/edgar/data/1689311/000168931117000021/canpta-may35.htm
Maybe for a given period it had some GE. Or Tesla. Or similar. If you want index behavior, get an index.
I'm w/ cranky Ted about short-term obsessing.
All remarks welcome. But what's the point of making them if not to get (even rude) feedback?
A penny’s variation in a fund’s NAV on a single day is short-term focus for sure. I don’t know why @Crash singled the fund out for attention on Tuesday. But, considering the number of threads here that often have little / nothing to do with mutual funds, his sin appears slight.
Some of us just enjoy discussing the workings of funds - particularly the ones we own. To me, saying something like “the fund has outperformed every year for 15 years” adds little to an understanding of the fund or of investing. Anyone can go to M*, Lipper, or another data base, list funds by category, and quickly learn how various funds in different categories have performed. And I suspect that’s about all some think there is to investing ... buy those funds that have done better than their peers over time. If that’s all you as an investor want / need, it’s fine with me. But to some of us the game is infinitely more interesting if we dissect the fund - looking for the reasons the fund has worked so well (or, sometimes, why it hasn’t).
No one needed to read this thread. There’s plenty of other options to persue here. Ted, alone, generously initiates more threads most every day than @Crash and many others do over the course of a year. (And I’m sure he doesn’t mean to dismiss this single thread as totally irrelevant as compared to all those he posts.)
This for sure, plus the uncovering of worthy new stuff. Good forum in those regards. I myself think this particular fund has been puhlenty dissected here already, and other info available online, as you note.
@Crash
>> Barely down, by just a penny/share. Figure it had to be because of short-covering against its own holdings, on this record day??? Poopy.
>> I just made an observation: my otherwise splendid holding (PRWCX) was a disappointment on a very good day for the markets.
>> all remarks are NOT welcome. So, in light of that, do I need or want to be here any longer?
Man, what would have been your dream responses?
You posted that this superb holding (yes, Hank, that fact is regularly acknowledged) was down a cent, out of $30, on an up day. You thought it might be from short covering or something (seems unlikely to me). And later you termed that a disappointment (!).
Ted and JoJo felt that this thinking sounded unduly short-term; I concurred.
Then you got bent about these responses.
So what were you hoping for? Handholding? k, I am sorry it dropped inexplicably. Maybe check only every month, or three.
Part of the utility (and the pleasure) here is pushback. Does negative kibitzing mean you are unable to feel welcome? Huh?
As for your last question, only you can decide. Of course.