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Question for Girouxheads out there

I am looking for a fund or EFT to complement SCHD. I want it to be different than the Schwab dividend fund and not mimic SPY. I looked at TCAF and discovered that both TCAF AND SPY have the same amount of Apple and Microsoft as their top holdings. Not that there is anything wrong with that but not what I am looking for at this time. Is TCAF a closet index fund?

Comments

  • Roy
    edited February 24
    A number of years ago Giroux recommended a fellow TRP fund for folks who could not access PRWCX, and it was TRP Dividend Growth Fund PRDGX. It carries a much lower dividend rate than SCHD and is more focused on dividend growers and capital appreciation.
  • Not a Giroux-head.

    But I have positions in the active ETF TCAF and indexed ETF SCHD. I may replace SCHD (old position) with TCAF (new position) at some point. I am not focusing only on dividends.

    I am also using TCAF + PYLD to model PRWCX that is not available to me.
  • Thanks gents!
  • I would say “don’t fight the market” and just invest in an S&P 500 ETF, first off….but yes I know the hesitancy of 20-30% being in 5-6 names. But it’s hard to beat the 500 for most funds. And you own more of what’s performing well (due to market cap weighting).

    Alternatives would be the quality ETFs like QLTY, JQUA, QUAL. They all own the big stocks, but diff weightings than SPY. Or, a new one I’ve found and am starting to build a position in: SPGP. It’s a GARP S&P 500 fund (Growth At Reasonable Price). Its highest weighting is in energy, then tech.
  • @Graust. “Don’t fight the market.” If I were 30 years younger I would agree. In fact, thats what I tell my adult kids who have plenty to invest and then ignore it. As for this old guy I am increasingly risk adverse. Today’s market is expensive and too concentrated.
  • Today’s market is expensive and too concentrated.
    TRUTH! With few exceptions!

    P/E ought not be the only indicator we look at, but I do tend to anchor my own decisions by that metric. But watch out for the "value traps," eh?
    TS
    ET

    Have been winners for me. But, "what have you done for me LATELY?"
  • edited February 26
    Not to pick on GS here but...

    Dateline: Oct 17, 2022
    Starship: Goldman Sachs
    Headline: The stock market is still too expensive even after its 25% decline, but there are bargains to be had in small caps, Goldman Sachs says

    https://markets.businessinsider.com/news/stocks/stock-market-outlook-valuations-rich-small-caps-value-interest-rates-2022-10

    Since 10/17/22:
    FXAIX is UP 41.5%
    IWM is UP 18.5%

    I used to subscribe to IBD way back in the day when I traded individual stocks a bunch. I learned a LOT from that subscription, including the FACT that when individual stocks are making new highs, their P/E's are many times regarded as WAY TOO HIGH. (And, according to GS on 10/17/22, even after a 25% overall market decline, they were still too high!)

    Perhaps something that supports @Graust's suggestion to "Don't fight the market."
  • edited February 26
    On Giroux, we are LT holders of PRWCX.

    I have tried many times to understand his strategies. I have simply learned to accept and appreciate them.

    To wit, we now own only two allocation funds: PRWCX and FBALX. BTW, they make an awesome pairing.

    PRWCX is yet again trailing FBALX over an interim period, this time YTD. And, at times this year, it looked like PRWCX was not going to get its 2024 motor started.

    But it has. And if history even comes close to rhyming, it will continue to rev. And at some point PRWCX will ascend back to its normal pole position. That said, sitting in the 12% hole YTD ain't so bad.

    Giroux is somebody I don't understand - I simply admire his PM abilities, and reap the benefits. Not saying to put blinders on with Giroux funds, but it's probably OK if you do. Or at least it has been for as long as I can remember.
  • edited February 26
    TCAF and PRWCX are managed funds. Just because their top holdings right now are similar to the S&P index doesn’t mean that they will be in the future. Personally, I think TCAF would be a good complement to SCHD. If you’re going to invest in a managed fund, you need to have a certain amount of trust in their decisions— which Giroux has earned in my humble opinion. Our economy right now is being driven by the tech sector, which most successful funds have capitalized on. If that changes, I’m confident that Giroux will respond accordingly.

  • @Tarwheel -- funny you say that. I'm thinking TCAF+CGDV would be a decent combination for broader equity exposure (with a slight growth bent) in one of my accounts.

    SCHD is probably fine for most folks, but frankly with so many people are talking about it, I prefer to find something more under-the-radar....
  • For myself, and because I have a lot of assets in USFR as a 'safe bonds' component, I've replaced a lot of my PRWCX with its higher-octane sister TCAF. So, my core now consists of FBALX, PRWCX, and TCAF. I've fleshed out the remainder with SMH and QQQ (and dabbled a bit with SMCI on occasion). For now, that seems an efficient combination.
  • Thanks all for your comments.
  • I try not to second-guess fund managers. Sometimes, their contrary ideas do the trick, other times not. But if the fund continues to lag after a while, then I may dump it.

    I do have LCG index to go with the the flow in here-and-now.
  • My most successful mutual fund is FCNTX, which I’ve owned about 25 years. I have sold portions over the years because it had grown so much that I was afraid it getting too large. Plus, I used to follow M* religiously, and they rarely have anything good to say about Fidelity funds except to da,n them with faint praise. It’s still one of my largest holdings and continues to amaze me. I don’t worry about its holdings because Danoff seems to find value in every market. Similar results from FBALX, another fund that gets no respect from M*.
  • @larryb - A little late to the party, but I use a combo of SCHD and TDVG, which is the ETF version of PRDGX referenced by Roy above. Large cap breakdown is 13/43/25, so it 's more blend than value. SCHD LC breakdown is 38/31/5. That's worked well for me, although yield for the TRP fund is only 1.19%.
  • Thanks for the idea
  • I hold jqua plus Fido 5% mm funds
  • Very low overlap between SCHD and SPGP. https://www.etfrc.com/funds/overlap.php

    So far, that site has no info on TCAF.
  • I hold jqua plus Fido 5% mm funds

    Nice fund:
    https://morningstar.com/etfs/arcx/jqua/quote

  • I recently added FETKX-Fidelity Equity Dividend Income (K shares) to broaden my holdings which I felt were getting too concentrated. To complement the following (K shares):

    FGCKX-Fidelity Growth Company
    FCNKX-Fidelity Contrafund
    FLPKX-Fidelity Low Priced Stock

    Outside Fido:

    VMNFX-Vanguard Market Neutral Fund
    TRAIX-TRP Capital Appreciation (I shares)
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