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Just a heads-up. My wife's rollover T-IRA is all in BRUFX. We are not unhappy. But I was a bit surprised to see them sitting on so much cash. Maybe they are smarter than me. THAT'S a sure bet. Perhaps markets ARE indeed headed for another leg downward in '23. Only 5+ percent of portfolio is in bonds right now. https://www.morningstar.com/funds/xnas/brufx/portfolio
@Crash - what has been a normal/usual/general amount of cash for this fund? And are they known for building up cash levels during times like the present?
Haven't been following BRUFX recently but followed it closely for many years. I don't recollect this amount of cash being unusual for BFUFX at major inflection points. BRUFX makes high conviction bets and isn't scared going off the beaten path.
Glad for the inputs, you guys. I can't recall who it was who turned me onto BRUFX. Maybe it was @bee? Here's a rule: don't get old! You can't remember shit! But I remember how very good this fund is, and we're sticking with it.
I have not owned BRUFX for a while, either; however, I do not recall such a high cash allocation, low bond stake, and such a big commitment to utilities (32%). The latter might be bond substitutes.
I have not owned BRUFX for a while, either; however, I do not recall such a high cash allocation, low bond stake, and such a big commitment to utilities (32%). The latter might be bond substitutes.
That makes sense! Yes! ...And for what it might be worth, it's back to a 5-star and Gold rating at Morningstar. I stopped worrying about those stars and medalist decorations at Morningstar quite a while ago. I do steer clear if I see them rating a fund NEGATIVELY.
Not to malign BRUFX, but I think you own the better fund with PRWCX. I calculate 1,3,5,7,10 year returns as of last friday to be all higher for PRWCX than BRUFX, and with less volatility.
Giroux does openly assert that his strategy is to maximize profit while allowing for only about 2/3 of the average market volatility, generally. I won't get into an analysis of the numbers you have both reported. I guess wifey and I hold the best of both worlds, with these two. BRUFX and PRWCX. But it's foolish under our current circumstances to add to them with new money. Not enough reportable income. If we did that, they would be non-deductible contributions, while also being tax-free upon withdrawal. I'm already withdrawing money annually from the IRA, and according to the ridiculously arcane and convoluted IRS formula, the tax-free, non-deductible portion is just a fraction of the full amount of my customary annual withdrawal. My tax guy understands it.
"Hello, IRS? I'm holding $5,000 in my T-IRA which is non-taxable and non-deductible from several years ago, before realizing that it is counter-productive to deposit $$$ into a T-IRA when there's no deduction to be had.
Why don't I just withdraw that $5000 in one lump, and be done with it?"
IRS: "Sorry. No. THAT would make TOO MUCH SENSE! We can't have THAT!"
Both funds have their strengths. Giroux long term performance has been outstanding and I'm happy with PRWCX.
Owning BRUFX requires a long term mindset because it has underperformed in stretches.
That said, rolling returns imo is a better measure to judge performance than point to point returns because it reflects better how people invest during the accumulation stage.
For the 3Y period commencing October 1, 2019 BRUFX has better risk stats than PRWCX Lower SD, lower beta, lower max DD (yes lower CAGR too).
Giroux became manager of PRWCX in 2006. I don't know the exact date but from Jan 1, 2006 to present day PRWCX has beaten BRUFX comfortably.
However for the 20Y period commencing Nov 1, 2002 BRUFX has knocked the socks off PRWCX. 10K in PRWCX would be 69K vs. 106K in BRUFX.
@Crash, that is IRS' prorata withdrawal of tax-deferred (most) and nontaxable (some) funds from T-IRA and keeping track of the "basis" with annual Form 8606. There are only 2 ways to get around this:
1. Ignore nontaxable funds and pay tax on 100%. IRS won't complain (-:).
2. People working and having good 401k/403b can move the tax-deferred amounts from T-IRA to 401k/403b, then drain T-IRA of all nontaxable funds. Finally, move tax-deferred funds back into T-IRA. That is lot of paperwork but possible.
And elsewhere here, there's a thread regarding Amazon and Alexa. An unexpected FAIL, there. Giroux put a bunch of money into Amazon, and then for the first time, the stock fell, in line with losses, rather than profits. Oops. AMZN is now 2.61% of the equity stake in PRWCX. That's a 31% downshift from the prior portfolio report obtained by Morningstar. Over the past one year, AMZN is down -48%. Ouch.
PRWCX holds one-third of its stocks in its top 10. THERE's a hefty bet. AMZN is #5 in size there.
Giroux makes big high conviction bets but his long term track record is pretty strong. I don't think Giroux performance(or most long tenured managers) can be judged by any time period less than 3 years.
Always a risk of a long term performance going off the rails though -- Exhibit A: Berkowitz.
@stayCalm - you mentioned "Giroux became manager of PRWCX in 2006. I don't know the exact date but from Jan 1, 2006 to present day PRWCX has beaten BRUFX comfortably."
I only wish to add a stalwart of my own to that comparison FCNTX which beats them both. Not tooting any horns here but Danoff has had quite a career. He also does well over the 2002-2022 period with this year letting quite a bit of air out of his balloon.
Danoff always springs to my mind when people discuss great managers.
I agree with yogi that FCNTX and PRWCX isn't an apples to apples compare.
For investment period commencing June 1, 2006 to present day an investment of 10K would be valued at 46K for Danoff and 42K for Giroux. But the ride was a lot more turbulent with Danoff (as can be expected for an all equity fund)
SD for Danoff is 15.62 vs. 11.64 for Giroux, max DD at -46 vs. -36 and worst year at -37 vs. -27.
While Danoff beat Giroux since Giroux took charge of PRWCX Giroux has beaten most all equity funds with a lower risk.
@YBB, whether it's "fair" to compare FCNTX to PRWCX I'll leave to others but this description is from the T Rowe Price website regarding PRWCX:
"Investment Objective The fund seeks long-term capital appreciation by investing primarily in common stocks. It may hold fixed-income and other securities to help preserve principal value.
Strategy The fund invests primarily in the common stocks of established U.S companies we believe to have above-average potential for capital growth. Common stocks typically constitute at least half of total assets. The remaining assets are generally invested in other securities, including convertible securities, corporate and government debt, foreign securities, and futures and options."
Granted one could make the case that it's not an apples to apples comparison BUT the manager of PRWCX does have the ability to go all stock if they believe that's where the possibilities are best, whereas the manager of FCNTX can invest in non-stock choices for similar reasons.
Also I drew my first attention to the 2006-2022 time period. No intention to deceive. I used PV and don't know how to choose a start period mid-year (e.g.June) as you pointed out.
Giroux has run PRWCX aggressively at times for a balanced fund and not hewed to any particular allocation limits but I don't believe he has ever gone all stock.
The investment strategy has language that allows him to go all in on stock but if he were to actually do so, the investor profile of this fund will very likely change and some institutional investors would be forced to drop the fund due to managing their own stock/bond allocation mandates.
If he didn't do so when SPY was done to 600's in 2009, it is unlikely that he will do so with the current size of the fund.
Contra is a storied fund and Danoff has a great story but one can only speculate who could have done better if Giroux was all equity. It's all academic anyway, Contra has great long term returns with commensurate risk for those wanting an all equity fund.
Comments
"Hello, IRS? I'm holding $5,000 in my T-IRA which is non-taxable and non-deductible from several years ago, before realizing that it is counter-productive to deposit $$$ into a T-IRA when there's no deduction to be had.
Why don't I just withdraw that $5000 in one lump, and be done with it?"
IRS: "Sorry. No. THAT would make TOO MUCH SENSE! We can't have THAT!"
Owning BRUFX requires a long term mindset because it has underperformed in stretches.
That said, rolling returns imo is a better measure to judge performance than point to point returns because it reflects better how people invest during the accumulation stage.
For the 3Y period commencing October 1, 2019 BRUFX has better risk stats than PRWCX
Lower SD, lower beta, lower max DD (yes lower CAGR too).
Giroux became manager of PRWCX in 2006. I don't know the exact date but from Jan 1, 2006 to present day PRWCX has beaten BRUFX comfortably.
However for the 20Y period commencing Nov 1, 2002 BRUFX has knocked the socks off PRWCX. 10K in PRWCX would be 69K vs. 106K in BRUFX.
1. Ignore nontaxable funds and pay tax on 100%. IRS won't complain (-:).
2. People working and having good 401k/403b can move the tax-deferred amounts from T-IRA to 401k/403b, then drain T-IRA of all nontaxable funds. Finally, move tax-deferred funds back into T-IRA. That is lot of paperwork but possible.
PRWCX holds one-third of its stocks in its top 10. THERE's a hefty bet. AMZN is #5 in size there.
Always a risk of a long term performance going off the rails though -- Exhibit A: Berkowitz.
I only wish to add a stalwart of my own to that comparison FCNTX which beats them both. Not tooting any horns here but Danoff has had quite a career. He also does well over the 2002-2022 period with this year letting quite a bit of air out of his balloon.
Danoff always springs to my mind when people discuss great managers.
PRWCX , BRUFX , FCNTX , FBALX From Jan., 2006. Stockcharts includes all distributions for a total return for the period.
CHART
Comparison with FCNTX (Danoff) isn't fair as that is 100% stock vs PRWCX that is typically 60-70% stock.
For investment period commencing June 1, 2006 to present day an investment of 10K would be valued at 46K for Danoff and 42K for Giroux. But the ride was a lot more turbulent with Danoff (as can be expected for an all equity fund)
SD for Danoff is 15.62 vs. 11.64 for Giroux, max DD at -46 vs. -36 and worst year at -37 vs. -27.
While Danoff beat Giroux since Giroux took charge of PRWCX Giroux has beaten most all equity funds with a lower risk.
"Investment Objective
The fund seeks long-term capital appreciation by investing primarily in common stocks. It may hold fixed-income and other securities to help preserve principal value.
Strategy
The fund invests primarily in the common stocks of established U.S companies we believe to have above-average potential for capital growth. Common stocks typically constitute at least half of total assets. The remaining assets are generally invested in other securities, including convertible securities, corporate and government debt, foreign securities, and futures and options."
Granted one could make the case that it's not an apples to apples comparison BUT the manager of PRWCX does have the ability to go all stock if they believe that's where the possibilities are best, whereas the manager of FCNTX can invest in non-stock choices for similar reasons.
Also I drew my first attention to the 2006-2022 time period. No intention to deceive. I used PV and don't know how to choose a start period mid-year (e.g.June) as you pointed out.
https://www.portfoliovisualizer.com/backtest-portfolio
The investment strategy has language that allows him to go all in on stock but if he were to actually do so, the investor profile of this fund will very likely change and some institutional investors would be forced to drop the fund due to managing their own stock/bond allocation mandates.
If he didn't do so when SPY was done to 600's in 2009, it is unlikely that he will do so with the current size of the fund.
Contra is a storied fund and Danoff has a great story but one can only speculate who could have done better if Giroux was all equity. It's all academic anyway, Contra has great long term returns with commensurate risk for those wanting an all equity fund.
Top of the pack is FDGRX with APR = 13.8
FCNTX with APR = 11 comes in at #19
Just one narrow angle on the data, not suggesting that FCNTX is not a great fund.
** Note that MFO data is updated monthly only so these stats are for end of month October 2022.