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Contributor ○

Re: VPMAX - time to load up?


@chang wrote:

@cegibbs wrote:

Chang  - maybe you should define “load up”.  I say that because you own 20 - 30 funds, so I don’t see you investing heavily or meaningfully in anything.  


My top five funds cover > 60% of PV. “Load up” would mean > $300k which is a top tier fund holding for me.


Chang - thanks for the clarification.  I’m not a huge fan of Primecap.  They've lost some key people to retirement and others are near that point and I’m not convinced that they’ve done a great grooming replacements.  I would rather own QQQ or TRBCX if I was trying to fill the LCG box.  TRP has done a great job of management changes through the decades.  Yet to be seen if Primecap will be able to do that in a successful way.

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Re: VPMAX - time to load up?

I'm a semi-recent investor with PRIMECAP, invested in their Odyssey Fund POGRX since 2017, no access to the Vanguard PRIMECAP funds currently. I'll admit I've had a few moments where my confidence has been shaken and I've been tempted to search for greener pastures. And I'm only 3 years in :P !  I have a few other winners in my portfolio namely, Vanguard Dividend Growth (VDIGX) and T Rowe New Horizons (PRNHX) so that makes it an easier pill to swallow. I am technically positive to date with POGRX so that takes the sting out. 

I share your opinion @chang that I prefer to not load up on FAANG funds at this time by adding something like QQQ. I think I will continue to dollar cost average into POGRX as I have been for some time now. The way I look at it is if I have active funds I can't have all winners all the time, as long as a few are winners I am happy. I suppose if they stay around the bottom quartile for too long I will cut it loose, but I suspect that will be right when it recovers, so I think I will just sit tight and keep slowly adding and stop peaking. 

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Frequent Contributor

Re: VPMAX - time to load up?

Yes, I agree PRIMECAP, Vanguard Dividend Growth (VDIGX) and T Rowe New Horizons (PRNHX) are all good funds. I have the Vanguard fund, which has lagged a bit, but I am keeping it.  Today, PRIMECAP and T Rowe P. New Horizons were both up a bit while Dividend Growth was down a bit. T Rowe P Blue Chip Growth also did well today.

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Re: VPMAX - time to load up?

Finally, after a ridiculous number of inexcusable delays, the 401K rollover money hit my VG IRA. Vanguard is allowing me a one-time purchase of VPMAX up to the amount I previously held, which would be about 7-8% of my current (total) equity value.

For obvious reasons I’ve got some concerns about “restocking” VPMAX to its previous level—the market (and the fund’s NAV) is higher than it was in May; I’ve already bought equity during the interval to compensate for the 401K liquidation back in May; and Primecap itself is in a bit of a slump (though in fairness it is a LCB fund, and M* has it in the wrong category).

I have only one opportunity to make a large purchase, and after that I’ll be limited to $25k/year which would be a relatively small fraction of the IRA.

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Frequent Contributor

Re: VPMAX - time to load up?

Take the opportunity to buy now and sell later if necessary.

Check Barron's summaries [in preparation] tomorrow.

YBB
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Frequent Contributor

Re: VPMAX - time to load up?

I've kept about the same amount of VPMAX and am confident it will see better earnings in the future with it's health sector and mid-cap tech mix. It has been slow to show as much gains as large tech recently, but should make for gains when research in healthcare sees new advances with coronavirus vaccines and treatment remedies come available 

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Re: VPMAX - time to load up?


@yogibearbull wrote:

Take the opportunity to buy now and sell later if necessary.

Check Barron's summaries [in preparation] tomorrow.


That’s true ... I can always sell at any time. Vanguard’s 30-day block would be nugatory, since I couldn’t buy back / buy more anyway.

I read the Barron’s summaries ... @yogibearbull what particularly were you referring to?

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Frequent Contributor

Re: VPMAX - time to load up?

Vanguard posted 6/30 holdings a few days ago for all their funds. VPMAX is still holding airlines (every one, it seems), cruise lines, retail stores, a few hotel chains, banks, an aircraft builder ... some among the larger holdings, others small.

https://investor.vanguard.com/mutual-funds/profile/portfolio/VPMAX/portfolio-holdings

Some of these companies will find the Covid (and arguably post-Covid) environment challenging.

Is PRIMECAP becoming a value fund? Have these companies been savaged so badly that PRIMECAP is investing like a deep value fund?

I haven’t pulled the trigger yet on my “free pass” to buy VPMAX. I’m still unsure if it’s PRIMECAP’s time yet.

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Re: VPMAX - time to load up?


@chang wrote:

Vanguard posted 6/30 holdings a few days ago for all their funds. VPMAX is still holding airlines (every one, it seems), cruise lines, retail stores, a few hotel chains, banks, an aircraft builder ... some among the larger holdings, others small.

https://investor.vanguard.com/mutual-funds/profile/portfolio/VPMAX/portfolio-holdings

Some of these companies will find the Covid (and arguably post-Covid) environment challenging.

Is PRIMECAP becoming a value fund? Have these companies been savaged so badly that PRIMECAP is investing like a deep value fund?

I haven’t pulled the trigger yet on my “free pass” to buy VPMAX. I’m still unsure if it’s PRIMECAP’s time yet.


I reviewed your link. Keep in mind that VPMAX is not holding airlines, cruise lines, retail stores, hotel chains, banks, or an aircraft builder in its top 10 largest holdings, which is 39.8% of total net assets.

It remains a GARP fund and I believe that Primecap Management is amongst the best.

 

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Re: VPMAX - time to load up?


@chang wrote:

Done. Reallocated my 401k to 60/40 VPMAX/VWENX. Didn't have the balls to go any more aggressive than that.


Before COVID hit the US VPMAX had significant allocations to Southwest, United, American, Delta, Alaska Carnival, and Royal Caribbean. I expect these companies will continue to drag down performance if they are held or lock-in losses if sold.

Have you considered IWF for your allocation to large-cap growth sector? Since VPMAX has underperformed its benchmark ( Index ), the Russell 1000 Growth Index, over the past week, month, 3 months, YTD, 1yr, 3yr, 5yr, 10yr, and 15yrs IWF seems to be a better alternative.

In addition to failing to match its benchmark returns it is ranked 97th YTD in its category, 92nd percentile over the past year, 90th percentile over past 3yr, 70th percentile over past 5yr, and 59th percentile over the past decade.

 On the surface, everything points to indexing as a better choice, what made you decide on VPMAX?

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Re: VPMAX - time to load up?

If it were me, I'd load up and decide if to keep later. I think the best time to purchase a good managed fund is when it's underperforming. 

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Re: VPMAX - time to load up?


@rhythmmethod wrote:

If it were me, I'd load up and decide if to keep later. I think the best time to purchase a good managed fund is when it's underperforming. 


Agree! I have stayed invested in this fund. It is one of a kind, well managed and has done better than the S&P 500 over many years. 

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Re: VPMAX - time to load up?

I do not have access to VPMAX. But I have Vanguard Primecap Core VPCCX in my 401k. I have invested in it. I see VPMAX is more growthy than VPCCX.

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Re: VPMAX - time to load up?


@FatKat wrote:

@rhythmmethod wrote:

If it were me, I'd load up and decide if to keep later. I think the best time to purchase a good managed fund is when it's underperforming. 


Agree! I have stayed invested in this fund. It is one of a kind, well managed and has done better than the S&P 500 over many years. 


 

 If you choose to allocate a portion of your portfolio to the Large Cap Growth category it is better to use a Large-Cap Growth Index or fund to measure how well managed the fund is. In the case of VPMAX, its 10-year growth of $10,000 leaves the investor with $39,077 while the Index return was $49,815. While you can not invest directly in the Index you can invest in IWF which mimics the Large-Cap Growth Index. The added value of substituting IWF for VPMAX in the Large Cap Growth allocation in a portfolio was an additional $9,077, a very substantial percentage improvement.

 Cheaper, more tax-efficient, and returning $48,821(IWF) vs. $39,077(VPMAX) over the past decade makes IWF a better choice for a Large Cap Growth allocation, IMHO.

 

 

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Re: VPMAX - time to load up?

I like IWF too, it is a good ETF fund, easy to hold. You have to go back to thr 1980s to see my relative gain over index griwth funds. Also. I added IWF and QQQ long after holding PRIMECAP.

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Re: VPMAX - time to load up?

Why would I buy IWF with a 0.19% ER when FSPGX with a 0.035% ER tracks the same index? (I bought FSPGX while my 401k rollover money was in transit ... not disappointed.)

VG’s VWUAX also has excellent 1-3-5-10-15 year results. Try plotting VWUAX vs VPMAX since inception ... gasp!

550E3C0B-580E-488B-96E0-3544E59E24AB.jpeg

 

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Re: VPMAX - time to load up?


@chang wrote:

Why would I buy IWF with a 0.19% ER when FSPGX with a 0.035% ER tracks the same index? (I bought FSPGX while my 401k rollover money was in transit ... not disappointed.)


 

 Why did you not choose FSPGX to allocate the 60% of 401k funds you put in VPMAX?

chang
Frequent Contributor
04-24-2020 08:27 AM
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.

 

 

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Re: VPMAX - time to load up?


@Bentley wrote:

@chang wrote:

Why would I buy IWF with a 0.19% ER when FSPGX with a 0.035% ER tracks the same index? (I bought FSPGX while my 401k rollover money was in transit ... not disappointed.)


 

 Why did you not choose FSPGX to allocate the 60% of 401k funds you put in VPMAX?

chang
Frequent Contributor
04-24-2020 08:27 AM
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.


Because it wasn’t available in my 401K

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Re: VPMAX - time to load up?


@chang wrote:

@Bentley wrote:

@chang wrote:

Why would I buy IWF with a 0.19% ER when FSPGX with a 0.035% ER tracks the same index? (I bought FSPGX while my 401k rollover money was in transit ... not disappointed.)


 

 Why did you not choose FSPGX to allocate the 60% of 401k funds you put in VPMAX?

chang
Frequent Contributor
04-24-2020 08:27 AM
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.


Because it wasn’t available in my 401K


 

 OK, I guess even major Wall Street firms limit employee 401k choices. Thought you guys would have unlimited choices.

 

 

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Re: VPMAX - time to load up?

At this point, I’ve put VPMAX on the back burner. I’m not sure how long Vanguard’s “free pass” is valid for—they didn’t give me a time limit—although I suspect they didn’t intend for me to wait indefinitely after the rollover.

VPMAX is definitely more blendy now. Today was a good test. VPMAX was up 0.5%, while FSPGX (LG index) was down 0.5%. That may or may not be a brilliant decision as far as market positioning goes, but whether PRIMECAP is the best LCB Fund is a question that hasn’t been asked or answered yet.

I already bought Wellesley VWIAX last week with 1/3 of the 401k rollover money, leaving exactly enough cash* to buy the maximum amount of VPMAX I am allowed to. (*When I say cash, I actually mean VBIRX; I wouldn’t own anything more conservative than that.) Now I’m thinking of adding the rest of that cash, or most of it, to VWIAX, and maintaining my LG exposure via FSPGX (and perhaps VWUAX) in my taxable accounts.

Between VWIAX and SCHD (and Global Wellington VGWAX) on the value side, and FSPGX and PRWAX (Roth IRA) on the growth side, I’m not sure what huge advantage PRIMECAP offers me.

As an aside, I also have VHCAX (Capital Opportunity) in my taxable account, so I do have some Primecap exposure; however, a significantly smaller position than the VPMAX I used to hold in my 401k.

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