I was going to jump into artgx for my US and foreign large capitalization investment, but was wondering if investing into oakmx and fmijx would be potentially better combination.. Currently, one of my core holdings is prblx, which I would sell if I invested in both oakmx and fmijx. I know that prblx isn't a 'great owl' fund, but I do like its socially conscious investment philosophy.
Either choice would fit my allocation objectives, risk characteristics, etc.. but wanted to see if anyone had an other thoughts regarding this question.
Thank you for your insights!
Comments
Think of it as very similar to ARTKX without the foreign currency exposure. During the only big downdraft in its 3-year life, Q3-11, FMIJX lost 12% while ARTKX lost 18%. (Both funds get the best risk scores from the usual rating gangs ('Low' at M* and 5 at Lipper)).
The reality is likely somewhere in between in your case. Any suggestion or recommendation without that context is useless and simply reflects the assumptions of people providing feedback regarding the allocation and not necessarily relevant to you. If you are just looking for support of a decision you have already made, then you will likely find it here with lack of context.
Perhaps, you can post the context of your portfolio to get meaningful recommendations.
Personally, I would want to never sell this fund. Congrats on holding it.
20% Artisan Global Small Cap ARTWX
52% Parnassus Equity Income PRBLX
8% Homestead Small Company Stock HSCSX
and 20% cash.
I was looking for a global/foreign large cap fund to add, and later on PONDX, an emerging market fund, and maybe AKREX.
Feel free to critique my portfolio.. Note that I intend to hold these funds for 15+ years..
If you're concerned about volatility, you could do worse than PRBLX and something like FMIJX. Just keep in mind you lose the benefit of currency diversification with FMI. If you want the diversification with less volatility, maybe FPIVX or FPRAX? If you can stomach a little more volatility, your options open up, and might include something like OAKMX and OAKIX, which can still be bought directly from Harris.
Our portfolios aren't that dissimilar. I'm buying ARTGX today to replace DODWX, so we'll see how the mix of PRBLX and ARTGX work as a core. I worry there might be some overlap, so like you, I might include a smaller growth fund to eventually compliment it.
The new ones being considered here are from good fund families with good managers but they just don't have the history to say how they will do as they gather assets and market conditions change. Even so, it may be fine if you have an active portfolio management strategy that has a plan to buy and sell based on some meaningful criterion, not what is shining recently. I am not sure you want shiny new funds as the core part of your portfolio.
I do not think it is smart to allocate more than 20% of your portfolio to funds as core holdings without a history unless you have a really small portfolio where it wouldn't make much difference. You may land up being disappointed on their performance over time or worse find that they have damaged your portfolio with underperformance in certain market conditions.
My recommendations are based on my rough guidelines here as a portfolio strategy that uses both index funds and active or specialty funds as appropriate for the stage you are in.
You have a 80% equity strategy with 20% in cash. This is fine if you are in accumulation phase with a small portfolio with a 25-30+ year timeframe or in the growth phase with a 15-25 year time frame. If the former, then I would forget active funds and get a diversified allocation with index funds. You dont need any hedging against market risk over that time frame, and it is difficult to find active funds that will overperform over a long period. At best they will underperform without any significant benefits. If you are in the latter growth stage, it might be useful to move 20% of your indexed core to specialty and allocation funds and over time increase the latter by adding more and more risk managed active funds as you get closer to your distribution years.
If you are in such a growth stage, keep the PRBLX as part of your core 60% or switch to a large cap blend index, supplement with a small blend index, an international index covering both DM and EM or separate DM and EM indices. Possibly in equal proportions in this 60%. Allocate 20% of the rest to sectors that have good beta performance and small amounts in it to shiny new funds just to satisfy your itch without harming your portfolio. You can even use the cash portion to include balanced/allocation funds for the full 40% and let them decide on cash. Initially start with high beta funds that are likely to over perform relative to the broad indices in the core (not their category indices) and slowly move them into more conservative funds with capital protection strategy as a glideslope to your retirement.
So, the questions you are asking about the funds other than PRBLX should really be in the 20% pot outside the core 60% and not trying to replace any fund in the core.
Be careful about use of volatility in evaluating new funds such as FMIJX. They can change very quickly as the fund enters some turbulence for its investment strategy. I don't think there is any justification to think FMIJX will necrssarily be a low volatility fund. It may turn out to be a great fund but hasn't proved itself as yet so shouldn't be part of core portfolio.