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Frequent Contributor

VPMAX - time to load up?

I am using the market volatility to do some considerable portfolio restructuring. I’m going to do a 401k rollover to a VG IRA. VPMAX is a closed/limited fund (existing shareholders can add up to $25k/yr). But VG will allow me to buy it in my IRA after the rollover up to the number of shares I previously owned in my 401k (as proven by a statement).

My 401k is currently about 1/3-1/3-1/3 in VPMAX, VWENX and a crappy SCV fund I will cut loose. Total value roughly $360k.

Given this one-time opportunity to buy as much VPMAX as I want in my IRA, I am considering repositioning the 401k to about 60/40 or 70/30 VPMAX/VWENX prior to the rollover.

To the point, VPMAX has sucked recently, spoiling its TR percentiles for 1-3-5 years. But it’s obviously an excellent, well managed fund for LT shareholders. This seems like a good time to pile in. I particularly like its overweight in tech and healthcare.

Thoughts?

TIA

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Frequent Contributor

Re: VPMAX - time to load up?

Done. Reallocated my 401k to 60/40 VPMAX/VWENX. Didn't have the balls to go any more aggressive than that. I've already got VHCAX in my account anyway.

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Participant ○○○

Re: VPMAX - time to load up?

 

Not that it matters now, the issue with all PRIMECAP funds is they are contrarian investors and they hold a lot of airline stocks.
Airlines most likely will get a government bailout but not without an equity stake by the government (shareholder dilution).
Airlines will eventually financially recover but their stocks may not in the near/mid-term.

The other issue with VPMAX, are high outflows from the fund.

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It will be interesting to see if this fund will open back up. 



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Frequent Contributor

Re: VPMAX - time to load up?

I don’t see Vanguard re-opening their Primecap funds while the equivalents at Primecap are still open. POAGX might be the first to re-open.

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Participant ○○○

Re: VPMAX - time to load up?


@chang wrote:

I don’t see Vanguard re-opening their Primecap funds while the equivalents at Primecap are still open. POAGX might be the first to re-open.


Good point. I forgot these 'versions' of the funds were still open. I own a little bit of POAGX before it closed.

The one thing I like about PRIMECAP is they don't hold all the FANG stocks in their top 10 like all the index growth funds and most active growth funds do.  I wish their out performance was more consistent though...

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Participant ○○○

Re: VPMAX - time to load up?

VPMAX (and the other Primecap funds) which I've held on and off since the 1990s seem to underperform of the way down and then more than make up for that during a recovery - so they have great 15+ year records.  If the market tanks again - which I for one expect, I would not want to be holding VPMAX.  I'd rather hold VDIGX, or a SP500 Index fund at this time.

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Frequent Contributor

Re: VPMAX - time to load up?


@BigTom wrote:

The one thing I like about PRIMECAP is they don't hold all the FANG stocks in their top 10 like all the index growth funds and most active growth funds do.  I wish their out performance was more consistent though...

That’s why I’m a fan and owner of JENIX.


 

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Frequent Contributor

Re: VPMAX - time to load up?


@chang wrote:

I don’t see Vanguard re-opening their Primecap funds while the equivalents at Primecap are still open. POAGX might be the first to re-open.


Yes, POAGX might reopen, but I too doubt PRIMECAP will open their Vanguard funds. I have VPMAX and kept it, have not exchanged into other funds. I think the fund will do better in future years. I think you did right as I would have gone 50-50 with it and Wellington. Added some bond funds to keep it more in line with 60/40.

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Explorer ○○

Re: VPMAX - time to load up?


@chang wrote:

 VPMAX is a closed/limited fund (existing shareholders can add up to $25k/yr). But VG will allow me to buy it in my IRA after the rollover up to the number of shares I previously owned in my 401k (as proven by a statement).

One way to overcome the $25K limit  is, I believe you can create multiple rollover IRA accounts in Vanguard and transfer in each upto $25K. At a later time you can consolidate multiple IRA accounts into 1. 

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Frequent Contributor

Re: VPMAX - time to load up?


@ESAR wrote:

@chang wrote:

 VPMAX is a closed/limited fund (existing shareholders can add up to $25k/yr). But VG will allow me to buy it in my IRA after the rollover up to the number of shares I previously owned in my 401k (as proven by a statement).

One way to overcome the $25K limit  is, I believe you can create multiple rollover IRA accounts in Vanguard and transfer in each upto $25K. At a later time you can consolidate multiple IRA accounts into 1. 


Ouch. The admin/complexity. I don’t think I’d do that. I think I’ve solved the problem by loading up on VPMAX in the 401k (done) and printing out a statement before I liquidate/roll it over.

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Explorer ○○○

Re: VPMAX - time to load up?

I recently dumped my Primecap POGRX holdings because for too long they have not done well compared to the index and similar funds.  How can Morningstar rate them gold gold???? All the Primecap funds have been performing badly for too long. 

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Explorer ○○○

Re: VPMAX - time to load up?

If my memory is correct Primecap POGRX has underperformed its index for too many time frames, has a very weak Lipper rating and has about 12% in airlines and a cruise ship company. I think for a long time people will view airlines and cruise ships as flying and floating petri dishes for Coronavirus. I don't see why Primecap POGRX is rated gold. Maybe Primecap is past its prime. On the other hand, maybe it's a great contrarian fund. I dumped all my Primecap POGRX. Maybe some contrarian stocks are contrarian because they are bad.

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Frequent Contributor

Re: VPMAX - time to load up?

I haven’t looked at the non-VG Primecap funds, but I assume they’re clones of the VG funds (or vice versa). I have looked at VPMAX, VHCAX and (to a lesser extent) VPCCX a few times lately. I don’t think the portfolios look problematic. I plan to stick with them, for the near-term anyway.

One of the few LCG funds that isn’t 30% FAANGS. If you want to be overweight FAANGs now, then this isn’t the fund for you.

A couple of their funds got hit by the crash of a biotech top holding last year (Nektar?) so they’ve had a few streaks of bad luck.

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Explorer ○○○

Re: VPMAX - time to load up?

Thanks!

Sent from Yahoo Mail on Android
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Participant ○○○

Re: VPMAX - time to load up?

After a decade of investing in Primecap, I lost confidence in the Primecap team two or three years ago. They had great results, but in my opinion their results were not significantly better than growth index funds.  I still think they are very good, but I'm unwilling to bet on them being better than the index over the 3-5 year time frame that I hold most funds.

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Participant ○○○

Re: VPMAX - time to load up?


@chang wrote:

 I have looked at VPMAX, VHCAX and (to a lesser extent) VPCCX a few times lately. I don’t think the portfolios look problematic. I plan to stick with them, for the near-term anyway.




 (deleted my counter point. Didn't want to deal with BS from another poster.)

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Frequent Contributor

Re: VPMAX - time to load up?

I'm holding POAGX. It used to also have outsized positions to airlines. I noticed on their site (and updated M* but not on Barron’s) that they are no longer holding them. They hold a lot more bio-tech, which is what I'm interested in developing. I'll be adding more to POAGX. It might be worth checking an updated listing of holdings for those Primecap funds mentioned if one is available.

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Frequent Contributor

Re: VPMAX - time to load up?

I don’t base an investment decision on undated statements of prior holdings without even knowing what percentages of the fund’s assets are represented.
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Participant ○○○

Re: VPMAX - time to load up?


@chang wrote:
I don’t base an investment decision on undated statements of prior holdings without even knowing what percentages of the fund’s assets are represented.

Go look at the Primecap's NPORT-P form SEC filings and disseminate the information for yourself...

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Frequent Contributor

Re: VPMAX - time to load up?

Same info that’s on the  VG web site. 3/30/2020. So?

Are these > 1% positions in the fund? 0.5%? 0.1%? What are they on 5/10/2020?

And would you mind stalking someone else for a while. Sheesh.

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