It has underperformed BM and VEA 1/3/5/ year. drawdowns only slightly better than the index.
I am looking for a suitable replacement - I will happily give up some of the upside for some protection on the downside
( why I chose TBGX in the first place) . I understand that Value has underperformed, and not giving up on Value. I am all set with International growth. TBGVX is 68% Europe At the moment.
I am thinking a a global Manager with a flexible mandate ?
I have been eyeing PRCNX and some Multicap - any thoughts ?
Comments
GGSOX Limited history here. "Smid" fund.
FIEUX Europe
...Still ironing-out the Brexit. Once that's in the rearview mirror, I think both UK and the continent might do very well, in reaction. And then there's the Covid stimulus.
FWWFX Worldwide large stocks.
RPGAX Global Allocation, includes bonds.
PRGSX Global Stocks. Right now, it's about 50/50 foreign and domestic.
Almost all my stuff is with TRP, but I don't own these.
The lead manager, Federico Santilli, has also steered RPICX (PRCNX clone) since 07-27-10.
Since inception, RPICX annual returns have been top-quartile in six out of nine calendar years.
The fund's trailing 10 Yr. return was top decile while its risk was low (according to M*).
Here's a snippet of William Rocco's (M*) take on PRCNX published on 11-25-20.
Santilli pursues compellingly priced companies with superior
competitive positions in attractive industries, strong
fundamentals, solid balance sheets, and proven
leadership. While doing so, he invests across the
market-cap and style spectrums, readily allows his
stock selection to lead to atypical country and sector
exposures, and invests in roughly 60-70 stocks while
keeping the largest positions moderate in size. This
approach is sound and distinctive and has an attractive
mix of bolder and tamer traits that provide this fund
with a fighting chance of outperformance without
taking on excessive risk.
• BGAIX/BGAFX – has low correlation to MIOIX –ANWPX- MINIX
• MFAIX MIOIX MGIAX TBGVX BGAIX MGGIX APFDX RPGEX ANWPX
I already own ANWPX and MINIX- would like to avoid a lot of overlap
Wellington's 2021 Outlook links:
2021 Investment Outlook
The beginning of the end started when they sold the firm to a manager, reaping millions themselves. When confronted about the reasons they said it was for "estate planning" although at least one of them is unmarried and childless. Snide comments in the article said he was planning for the cat's estate
@sma3. Generally their reports have been very straight forward and informative . I was re-reading to look for an explanation for the underperformance
It is categorized as small/Midcap even has a small slug of micro in there - which might be of interest for a smaller allocation.
I have not compared it to other strict small Mid cap funds yet. I have been concentrating on Large or Multicap managers. ARTKX is interesting - It had less of a drawdown this year than TBGVX - and over performed . Weirdly it underperformed the pure Value fund ARTGX in several years.
It's on my dashboard. Waiting for an opportune time to invest some cash ( like the rest of the world)
Thanks ! your posts have always been very informative
https://morningstar.com/funds/xnas/prijx/portfolio
https://morningstar.com/funds/xnas/artyx/portfolio
In some respects I feel all the issues in the U.S. with e-commerce tech stocks killing everything else and investors being willing to pay exorbitant sums to own them are just exacerbated in these developing nations. In other words, companies like Mercado Libre--Latin America's Amazon--aren't exactly cheap, so ARTYX has an average 51 trailing p-e while PRIJX has a 13 one. Will the trend ever reverse and if so, when? Those are the questions.
For example, you are sick of waiting on value, but you're not sure if you want to bail on it totally. You put your five star fund(!) up against an index fund in a different category (foreign large cap blend).
There are only five foreign LCV retail funds that have posted better performance than VEA over the past 1, 3, or 5 years: FIINX, EPDPX, EPIVX, KGIRX, VTRIX. Something has to give: commitment to value or a sense of what constitutes "decent" returns.
Or perhaps it's the demand for low risk that needs to be relaxed. When a fund earns five stars, it's because of risk adjusted performance. That can be achieved either through earning outstanding returns, offering a lot of protection, or a balance of the two. TBGVX's returns have been "only" above average and average, respectively, over the past three and five years. But it still earned 5 stars over three years and 4 stars over five because its risk as calculated by M* was low.
VTRIX is one of the half dozen high performing FLV funds listed above. However, to achieve that it took on more risk - "average" per M*. You can see how the risk played out. Each year in the past decade when it lost money (2011, 2014, 2015, 2018) TBGVX out performed it by 5%-10%.
Note that M* risk is very different from max drawdown. If low drawdown is your sine qua non of risk management, then throw the star ratings out the window, because it barely registers in the calculation.
FWIW, between 10/31/2007 and 3/9/2009, TBGVX lost "only" 50.5%, compared to VTRIX's loss of 59.3%, and VTMGX's loss of 60.6%. (The VEA share class doesn't go back that far.)
1. I asked to consider a "global blend manager" in the hopes that might put the decision making between Value & growth in the hands of the manager. Perhaps that is not the smartest way to gain the exposure that I think I need. As I stated in the opening post - it has been a long wait for the value proposition to kick in. I welcome your comments on the issue of Value vs. Growth at this time
Here are my priorities
2. I am willing to give up on the upside for protection on the downside - so I have been looking at the Sharpe and Martin Ratio, and Max DD in the MFO screener. Is there better process for evaluating the risk ?
3. EM was only referred to because I stated that I was moving on to researching small/mid and EM next/separately - I am not screening it as an alt to TBGVX.
TBGVX is 68% Western Europe 13% U.S (that slug of US probably helped the performance vs. a strict Foreign only fund - ARTKX has outperformed in 1/3/5 years, but as you point out has had steeper MAXDD in 2011 and 2018.
I am already holding MINIX, TBGVX (in a 401k that I did not sell), DFALX that I can't sell due to cap gains in it.
does that add clarity ? Your advice is welcome.
KGIRX - reasonable fee-Lower AUM - High Sharpe ratio .
KGIRX was not a fund I was familiar with. Something to note about it is that unlike most of the other better performing foreign LCV funds is that it has a large measure of EM. Really large. 43%.
I ran a few searches, and the closer one hews to low risk, foreign LCV, the more similar the performance becomes. For example, one screen was:
Category = foreign large value or foreign large blend
Large Cap Value >= 25%
Large Cap Growth < 10%
Bear market percentile < 50%
YTD return > 0
For me rapid spikes down or up don't matter. Unless one is planning on selling within a small window of time, ISTM that recovery time is more important than how deep a plunge is. Since the 2020 spike (decline) was between January 17 (when the market hadn't risen much YTD) to March 23, it seemed reasonable to look for funds to "break even" over the current year, hence YTD return > 0. (Between 1/17 and 3/23, many funds seemed to have drawdowns of 34% - 35%.)
Not too many funds pass this screen. (Variants include increasing the percentages of both LCG and LCV while keeping a significant difference between the two.) One of the few that did was PRCNX, which led me to believe you were looking for very similar funds.
Another fund that came out of that initial screen (LCV >= 25, LCG < 10) was GSAKX. This sits on the border of value and blend. It wanders along the dividing line; M* called it value in 2019-2020, but blend in the prior three years. It's highly concentrated (34 stocks), and very Eurocentric @ 79% including UK. Its 1/17-3/23 drawdown was 34.5%, just slightly less than VEA's 35.1%.
Changing the screen slightly (LCV >= 35, LCG < 25) gives a few different funds. One is LZIOX. This is a more wide ranging fund from what is generally a value shop. It's generally been blend, though it had a year as a LCG fund and is now LCV. It has a more conventional 70 equities. It has performed respectably, though it too fell 34.6% between 1/17 and 3/23. Over the past three years it has done significantly better than TBGVX.
BRXAX is another fund from this screen. It's been LCV for the past four years, but this year its portfolio is blend and M* has placed in in the blend category. 149 stocks, including a bit more than 20% EM. Likewise, it fell 34.5% between 1/17 and 3/23.
None of these funds is going to set the world on fire. They're lower risk, reasonably performing, relative value funds. In contrast, TBGVX is a "deep-ish value" fund.
I did note the EM in KGIRX which is another category I am interested in for new cash - I need to offset the concentration in US Large caps over all. I have very little exposure to EM - and will set out to investigate candidates for that bucket next. It seems that managers in EM and SMID funds vary a lot . I am thinking several smaller positions.
I do believe in the Value proposition. It makes sense, especially now, with such an expensive market. My motivation of replacing TBGVX with a blend manager, was the belief that they are better qualified to make the decisions of moving in between value/growth that I am, or will ever be.
PRCNX right now is my front runner for a replacement for TBGVX - and MFAIX for international LCG.
Will add LZIOX and BRXAX to my screen -
"None of these funds is going to set the world on fire. They're lower risk, reasonably performing, relative value funds. In contrast, TBGVX is a "deep-ish value" fund."
Exactly what I am looking for..... long term investments and places to add cash on dips, building a balanced portfolio .
Many thanks