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T. Rowe Price Hedged Equity Fund will be available November 8
I did not know that about TRP. Luckily, their three funds I own do not hold hedge funds. PRWCX does not - may be because they do not treat it as an allocation fund, notwithstanding how M* classifies it and how I view it.
@Tarwheel, do you think TRP is propping up PHEFX as a substitute for the hedge funds it had been using in its allocation funds? May be that is how the fund gathered AUM in a hurry.
The "Z" class of this fund was launched in July 2023, about four months before the investor class was available to purchase. The fund literature says, "The Z Class is only available to funds managed by T. Rowe Price and other advisory clients of T. Rowe Price or its affiliates that are subject to a contractual fee for investment management services." [Bold added.]
P.S.: I just checked their website and they still do not have PHEFX portfolio detail, though they have the geographical breakdown as of 12/31/23.
It may be that TRP created PHEFX as a substitute for other hedge funds, as I know they’ve created other special funds in the past to use in their allocation funds, such as a commodities fund. My main concern is that I don’t like “black box” investments. Also, from my reading, most hedge funds and tactical allocation funds do not have great long term returns. They might do well in spurts but not reliably. I feel the same about long-short funds, etc.
It's also why when I joined my state university system I avoided the pension plan and went for the self-directed 403(b). Many state pensions have huge positions in various (and costly) hedge/PE investments that I want no part of ... plus I don't trust the investing savvy of the political appointees overseeing the pension's investment, many of whom live and die by whatever the Wall Street favorite 'thinking' is at the time regarding allocations.
As I said at the time, if I'm going to lose or make money, I want to be the one responsible for it.
ETA: Somewhat off-topic but IIRC the Nevada State Pension is entirely in Vanguard funds. A WSJ article a few years ago talked about how 'boring' the Pension Chief's job was.
Vanguard Market Neutral Fund (VMNFX) may fit into this alternative category? It has performed well recently. Lipper shows ER of 0.20% but 1.83% on Vanguard website.
they [TRP] do not treat it [PRWCX] as an allocation fund, notwithstanding how M* classifies it and how I view it.
Notwithstanding how Lipper similarly classifies PRWCX as a mixed asset, target allocation growth fund (like TRSGX), TRP includes PRWCX in its list of asset allocation funds. In that sense at least TRP is treating PRWCX as an asset allocation fund.
It is easier to converse using a standard taxonomy. Still, each investor can group funds according to individual taste.
When I think about the investment processs of allocating assets I tend to exclude convertible securities funds. Those invest in one type of asset (disregarding convertible bonds vs. convertible preferreds). So there's nothing to "allocate".
OTOH, if I'm looking at risk and return profiles, convertibles fit in with hybrid funds (allocation or not).
It's also why when I joined my state university system I avoided the pension plan and went for the self-directed 403(b). Many state pensions have huge positions in various (and costly) hedge/PE investments that I want no part of ... plus I don't trust the investing savvy of the political appointees overseeing the pension's investment, many of whom live and die by whatever the Wall Street favorite 'thinking' is at the time regarding allocations.
As I said at the time, if I'm going to lose or make money, I want to be the one responsible for it.
ETA: Somewhat off-topic but IIRC the Nevada State Pension is entirely in Vanguard funds. A WSJ article a few years ago talked about how 'boring' the Pension Chief's job was.
Many government retirement plans offer up to 25% in self directed mutual funds at outside firm such as Fidelity. CA state retirement plans are a mess with agenda that have nothing to do with best risk adjusted return. My wife worked several years for state - I need to move over to something like Fidelity balanced.
Many government retirement plans offer up to 25% in self directed mutual funds at outside firm such as Fidelity. CA state retirement plans are a mess with agenda that have nothing to do with best risk adjusted return. My wife worked several years for state - I need to move over to something like Fidelity balanced.
To clarify: I was referring to *pensions* that employees only pay into but have no control over how it's invested - those are the places witih the fat allocation to expensive hedge funds/PE black boxes. My state (MD) 403(b) also has the brokerage window where I could dump 0-99% of my 403 now into whatever fund I wanted to offered at TIAA or Fido ... but I'm happy with the one LCV fund I'm in now at TIAA, so I haven't used that.
I could probably buy into one or more 'alternative' type funds that way if I wanted to, but why?
@BaluBalu. Not sure if you caught Sebastian Page from t Rowe on wealth track recently. He mentions in regard to the 60/40 portfolio allocation you might now consider taking 10 of the 60 and putting it in hedged equity and 10 of the 40 and place it in the dynamic bond type of fund. Seems reasonable to me. Note that he did not mention PHEFX by name specifically
Fwiw. I've started a position in PHEFX. We'll see how it goes
Thought I'd bring this fund up again. I bought into this hedged equity fund, PHEFX, back in Dec. JHQAX is one of my larger holdings so I thought I'd compare return so far.
PHEFX is definitely a more aggressive and volatile fund than JHQAX. I can see that in watching day to day returns. But it's return has been quite good. It remains to be seen how it holds up in a down market, a positive JHQAX has had.
Comments
I did not know that about TRP. Luckily, their three funds I own do not hold hedge funds. PRWCX does not - may be because they do not treat it as an allocation fund, notwithstanding how M* classifies it and how I view it.
@Tarwheel, do you think TRP is propping up PHEFX as a substitute for the hedge funds it had been using in its allocation funds? May be that is how the fund gathered AUM in a hurry.
The "Z" class of this fund was launched in July 2023, about four months before the investor class was available to purchase. The fund literature says, "The Z Class is only available to funds managed by T. Rowe Price and other advisory clients of T. Rowe Price or its affiliates that are subject to a contractual fee for investment management services." [Bold added.]
P.S.: I just checked their website and they still do not have PHEFX portfolio detail, though they have the geographical breakdown as of 12/31/23.
It's also why when I joined my state university system I avoided the pension plan and went for the self-directed 403(b). Many state pensions have huge positions in various (and costly) hedge/PE investments that I want no part of ... plus I don't trust the investing savvy of the political appointees overseeing the pension's investment, many of whom live and die by whatever the Wall Street favorite 'thinking' is at the time regarding allocations.
As I said at the time, if I'm going to lose or make money, I want to be the one responsible for it.
ETA: Somewhat off-topic but IIRC the Nevada State Pension is entirely in Vanguard funds. A WSJ article a few years ago talked about how 'boring' the Pension Chief's job was.
https://www.wsj.com/market-data/quotes/mutualfund/VMNFX
Funds are required by the SEC to provide TOTAL ERs, but fund analytics services can be more flexible.
Notwithstanding how Lipper similarly classifies PRWCX as a mixed asset, target allocation growth fund (like TRSGX), TRP includes PRWCX in its list of asset allocation funds. In that sense at least TRP is treating PRWCX as an asset allocation fund.
https://www.troweprice.com/personal-investing/tools/fund-research/asset-allocation-funds
It is easier to converse using a standard taxonomy. Still, each investor can group funds according to individual taste.
When I think about the investment processs of allocating assets I tend to exclude convertible securities funds. Those invest in one type of asset (disregarding convertible bonds vs. convertible preferreds). So there's nothing to "allocate".
OTOH, if I'm looking at risk and return profiles, convertibles fit in with hybrid funds (allocation or not).
I could probably buy into one or more 'alternative' type funds that way if I wanted to, but why?
https://www.troweprice.com/personal-investing/tools/fund-research/PHEFX#content-summary
M* shows no (zero) inflows in December.
Fwiw. I've started a position in PHEFX. We'll see how it goes
Best regards
Baseball fan
I am still sticking with JPMorgan Hedged Equity A JHQAX, a fund that has a consistent and excellent 10 year risk/reward history.
Good luck.
Fred
...............YTD 3MO Inception 7/6/23
PHEFX 5.0% 10.5% ~14.3%
JHQAX 3.6% 5.7% ~ 9.2%
SPY 1.6% 15.9% ~15.3%
PHEFX is definitely a more aggressive and volatile fund than JHQAX. I can see that in watching day to day returns. But it's return has been quite good. It remains to be seen how it holds up in a down market, a positive JHQAX has had.
FWIW
$1 minimum, NTF.