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Is PRPFX ready to shine again?

beebee
edited July 2014 in Fund Discussions
I'm finding myself thinking more about capital preservation these days.

I have also noticed Precious Metals (more so) and LT Treasuries (to a lesser degree) seems to be acting as uncorrelated assets to equities more often than not. At times like these, I use a fund like PRPFX and compare it's relative performance against my other funds and look for signs of weakness (where my equity fund crosses over or underperforms relative to a fund like PRPFX).

In the past I have often scaled back on my equity position putting a larger weighting in a fund like PRPFX (or a multisector bond fund like PONDX) as a way to protect assets. PRPFX is up 6% YTD and 11% over the last 1 year time frame. Over a 3 year time frame is has provided capital preservation at best while many sectors of the markets roared ahead of this fund by as much as 60%.

If we are headed for a revision, a fund like PRPFX is not a bad place to be. If we are merely consolidating, a PRPFX like fund is still not a bad place to be.

Here's a chart showing PRPFX vs. VFINX (S&P 500 index) over the last month...VFINX is still out performing PONDX (my multisector bond fund), but having trouble outperforming PRPFX. Obliviously this is a short timeframe, but the relative out performance of PRPFX is, to me, worth noting. In this case PRPFX's PM and LT treasuries are serving an important role at this particular moment.

Are you using any funds for these stated purposes...either capital preservation or as a fund that protects on the downside?

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Comments

  • CharlesCharles
    Whitebox Tactical
  • Derf
    bee. be advised this fund isn't tax friendly.
    Derf
  • ducrow
    Just Purchased HEIFX & WBALX
  • davidrmorandavidrmoran
    Since you are thinking about capital preservation, and maybe PRPFX has a bright short-term future (as you suggest), sure, and maybe even longterm, I nonetheless suggest that you graph its last year against GLRBX, PONDX, and, oh, AOM. Looks okay, not great, but quite okay. Then do the same for two years.
  • catch22catch22
    edited July 2014
    Howdy @bee

    Here's a chart of VFINX, PRPFX and PONDX going back to April, 2007.
    NOTE Right click onto the 200days name of the slider and select all, which will move the chart to the April, 2007 date range, then click onto the green/red icon at the far left to display the returns in graphic percentage form.
    As you are a person of the charts, too; and watch the crossovers and such, hopefully this chart will be of interest.

    The chart is for total returns (distributions, etc. ).

    http://stockcharts.com/freecharts/perf.php?vfinx,prpfx,pondx#

    PIMIX (PONDX's cousin) remains one of our largest bond holdings, so you may consider me/us biased.

    Regards,
    Catch
  • MikeMMikeM
    Hi Bee. You know as well as anyone that, as goes gold and treasuries goes PRPFX. It's positive history over the past 10-15 years is due to positive trends in those categories. I believe those days are gone, so I sold this fund about 2 years ago. Could be a good short term hold to park money, but there are better conservative vehicles for longer term investors, IMHO.
  • beebee
    edited July 2014
    catch22 said:

    Howdy @bee
    PIMIX (PONDX's cousin) remains one of our largest bond holdings, so you may consider me/us biased.

    Have to agree. I have recently added to USFIX for similar reasons. At moments of under performance in the market a multisector bond fund might also serve as "dry powder" for dollar cost avergaing into other more oversold areas of the market...just a thought.

    Thanks for the link. I often use a multisector or conservative allocation fund to guage whether the market is trending downwards towards oversold or trending upwards towards overbought. This site does a nie job of dynamically showing this.

  • scott
    edited July 2014
    I guess one thought about Permanent Portfolio is whether or not delegating aspects of the permanent portfolio to other managers would be a better idea - gold/silver by investing in CEF instead, for example. I dunno. I think you could create an interesting permanent portfolio from parts and pieces, but the issue becomes it would probably have a higher expense ratio.
  • rjb112
    scott said:

    I guess one thought about Permanent Portfolio is whether or not delegating aspects of the permanent portfolio to other managers would be a better idea - gold/silver by investing in CEF instead, for example. I dunno. I think you could create an interesting permanent portfolio from parts and pieces, but the issue becomes it would probably have a higher expense ratio.

    Interesting that the Morningstar analyst also had some thoughts about 'delegating aspects of the permanent portfolio.......'
    M* says: "But one could reproduce the fund's asset allocation at a lower cost by using sibling Permanent Portfolio Aggressive Growth PAGRX for equity exposure and cheap, passively managed vehicles for precious metals, natural resources stocks, and bonds. Overall, this fund isn't compelling as constituted."
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