I've been looking for a LCV fund to offset my growth tilt. I've been hesitant to consider Parnassus Endeavor because of its relatively high SD, mood swings and lean toward LCB.
Since Billy Hwan took over sole PM this year, i decided to look at it again. And i was pleasantly surprised to see such a transformation, even though the relative value "approach" is still in tact. I've been reading articles and listened to the quarterly report and was impressed with the "new" direction.
Mr. Hwan stated he is toning down the volatility and risk, has marginally increasing the number of holdings and thus reducing the top 10% of holdings from 60% to 32%. He has significantly reduced or eliminated several holdings of Mr. Dodson's. He also wants to lower the BETA closer to the index, etc.
From what i can tell, Mr. Hwan is on target.
Any thoughts going forward with Mr. Hwan and the transformation of Parnassus Endeavor?
It’s interesting that you raise PARWX because I have also been following the fund over the past several months. It is a pretty unusual fund in that it combines a concentrated weighting in financials as well as more value oriented tech — particularly semis. Hwan has also been increasing his weighting’s towards healthcare to dampen volatility. I like where he is taking the fund but haven’t yet invested in it. The fund has underperformed other LCV funds Over the last 3 months. You might want to take a look at Smead Value if you are looking for something that has low correlation to growth funds. Smead has almost no tech and still has performed quite admirably long term. I also recently purchased IAI which is a financials sector fund focused on the brokers and dealers. Very steady performance from both funds.
SMVLX Smead Value is a great LC Value fund but closed to New Investors at Fido and unavailable at VG.
Mike, I did come across Smead value but as Stillers stated it’s closed to new investors at Fido which is where I invest.
Stillers, I will look for the thread, thanks!
AndyJ, if you come up with some insight or thoughts on PARWX now that you are going to give it a look, please pass it along. I would be very interested to hear what you have to say.
I was impressed by his thoughtful investment strategy and candid demeanor.
I didn't like Smead Value Fund's expense ratio which was rather high.
The fund has performed well with top 5% returns in the large value category for the trailing 3 Yr, 5 Yr, and 10 Yr periods.
Note: Smead Value Fund was classified as a large blend fund by M* from 2011 (or before) through 2017.
I'd value any additional recommendations that you good folks have in large or mid cap value. Ive researched a number. FLPSX, DODGX, YAFFX. Havent quite found one that I'm fully comfortable with
If the convenience of buying (additional) shares through Fidelity is worth a little effort, open a position directly with the fund company and then transfer the shares. I've done that with a different fund. Not a difficult process.
Automatic Investment PlanHelp No
52 Week Range $42.85 - $67.91 (for SMVLX)
SVFAX is open at Schwab
Does this help, Derf
As you point out the key question is how much time has to go by to get a feel for Mr. Hwan’s changes?
It’s been 8+ months and he has made good on his approach. Obviously, That’s not a lot of time, so what do you feel is an appropriate honeymoon?
I’m also considering PARWX for a taxable account but that wouldn’t happen until next year because of the tax consequences from the many changes to the portfolio.
Both BLVAX and CILGX are GOs
All have higher Martin ratios and lower UI either over their shorter life ( BLVAX CILGX) or a comparable period to SVFAX
The SD appears to have dropped by 2+, although still a bit high, with positive Alpha that’s well above the -7.55 (per m*).
I’m considering PARWX/PFPWX for a taxable account, but not sure that’s wise. Mr. Hwan is aiming for 30% to 40% turnover which I believe should help keep the tax implications reasonable given the expected return.
Thank you for any and all replies or suggestions!
January 5 edited January 5
Purchased some PARWX LY and have been happy with it. It was up 31 percent in 2021. Up 4.7 to peers, low Ulcer, good Martin and Sharpe…
Wondering why it’s a MFO 3 Rating for 1 yr. I think I may need a re-education on ratings. Can anyone shed some light? Referring to 1 yr rating on this fund as all other periods are 5 rating. TIA.
Edit/Add: Is it an overriding category issue?
Going forward I’m wondering if the fund will be more tax friendly than in the past. He states he is reducing turnover, SD and other metrics.
Obviously, his intent is to reduce volatility but at what cost (i.e. return)?
There’s a lot to like about PARWX but questions still need answers.
I do not own this fund.
Mr. Hwan stated his goal is to reduce turnover between 30% to 40%, among other volatility reducing measures.
In fact, I did state that I was concerned what impact these process changes will have on returns.
I too am a firm believer in TR, but very high tax consequences can have a significant impact on after-tax returns and make an otherwise excellent fund, mediocre or inefficient in a taxable account.
Unfortunately (i guess) for me, 75% of my retail investments (ex. IRA's, 401K) are in a taxable account, so I believe I have to, at least, consider tax consequences, not necessarily make decisions solely based on it, but it is one factor.
As far as ETFs, they don't serve my purpose in this area. I do not want a index tracker, I much prefer an investment that deviates from its bogie. From what I read PARWX/PFPWX has an active ratio of about 90%, not bad.
Any further thoughts, ideas, suggestions or opinion are very welcome!!!