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PRMTX - Comapring recent 6 months to QQQ/XLC

beebee
edited December 23 in Fund Discussions
PRMTX seem to being experiencing a unusual under performance over the last 6 months compared to QQQ or XLC. Maybe not a perfect comparison, but PRMTX has under performed by about 15%. Any thoughts on the reasons for such a large short term differential?

https://portfolioslab.com/tools/stock-comparison/PRMTX/QQQ

https://portfolioslab.com/tools/stock-comparison/PRMTX/xlc

Roth Conversion Strategy:
If it appears to be a short term glitch, I am considering an "in kind" Roth conversion with some of these shares of PRMTX before the end of the year. Roth Conversion needs to be completed by 12/31/25 for TY2025.

Consider a Roth Conversion when your fund is temporarily under performing (article is referencing a pull back in early 2023):
Say you own 10 shares of an ETF, each worth $100, in your traditional IRA. If you convert it to a Roth, you’d owe taxes on the dollar value of the shares: $1,000. But if your portfolio declined by 20%, you could move those same 10 shares over and pay taxes on $800.

Once your stocks are converted, they’ll ideally continue to grow tax-free in your Roth account until you’re ready to withdraw the money in retirement.

“There’s no question if you’re paying for something and it costs less, that’s good,” says Slott. “But you don’t really know when the market is really down. It’s hard to time the market for a Roth conversion.”

As Slott points out, the market could rebound or drop further from current levels, so you’ll never know if you’re getting the best possible deal.

That’s why, if you’re interested in converting, he suggests scheduling a series of small conversions between now and 2026, when the lower tax rates set forth in the Tax Cuts and Jobs Act are set to expire. These tax cuts will continue through 2028
cpa-why-a-down-market-is-a-great-time-for-roth-conversion

Comments

  • MarkMark
    When did the new manager(s) take over and has security selection or weightings changed much since they did?
  • Observant1
    edited December 24
    Daniel Shear started managing PRMTX solo in March 2025.
    Excerpts from the M* PRMTX report (12/19/2025) are below.

    "Shear has introduced several changes since taking over, reshaping the portfolio's sector, style,
    and geographic profile. Historically, the strategy leaned more growth-oriented than a typical
    communications fund, in part because of its inclusion of tech stocks."

    "He's trimmed technology holdings in favor of entertainment names, for example, increasing position sizes
    in companies such as Spotify and Nintendo. Additionally, following the October 2024 shift to the MSCI World
    IMI Communication Services 10/40 Index, Shear has expanded the portfolio's international exposure."

    "From the start of his tenure through the end of November 2025—just an eight-month period—
    the fund severely lagged both its benchmark and the typical communications Morningstar Category peer."

    "Most of this owes to poor stock selection, compounded by losses from several short-term holdings
    that were quickly entered and exited."

    The "Process" and "People" M* Pillars were rated average and the fund received a Bronze Medalist Rating.
  • hank
    edited December 24
    Your thinking is sound @bee in considering converting to a Roth a fund you believe is temporarily lagging and which you believe will eventually make up lost ground. Translated: tax-free gain. As to this particular fund? I have 0 insights. Personally, I do occasionally move $$ into funds I believe to be solid long-term performers & temporarily lagging the pack.

    +1 @Observant1 / Thanks for the relevant excerpts.
  • beebee
    Thanks @Mark, @hank, and especially @Observant1... True to your handle.

    I will keep this fund on short lease as it appears the new manager is making many decisions he will have to own.

    I can't be the first to ask about its recent under performance... annual report should add more information regarding these changes.

    Manager risk is inherent to managed funds.

    Thanks all. Roth executed.
  • equalizer
    I just noticed the underperformance and by looking at top ten holdings, it doesn’t match YTD return for the fund.
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