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cegibbs
Explorer ○○○

Selling some PRWCX for a VDIGX/VWINX combo

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I have a very large position in PRWCX (approximately 85% of my total investable assets).  Been thinking of selling some of PRWCX and moving it to VDIGX and VWINX.  Maybe a 65/35 split of VDIGX/VWINX.  All of this is in tax deferred accounts.  Maybe reduce my PRWCX to 50%, which is still a very large percentage.  This potential fund changewas not prompted by the recent market volatility, but rather a diversification consideration.

Any thoughts on using VDIGX/VWINX in addition to PRWCX would be appreciated.  And, if you have any additional ideas, I am very interested in hearing your good thoughts.

 Best wishes to all.

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cegibbs
Explorer ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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Excellent comments to my post.  Very much appreciated.

FD - I have a very trim portfolio holdings list:  PRWCX (85%); FXAIX 10%; TRBUX and cash (5%).  The aforementioned are approximate percentages.  

Pas Yogibearbull suggested, I think I will stay put where I am.  

View solution in original post

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23 Replies
Wheaton
Follower ○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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My initial reaction is that I don't like to keep more than 15% - 20% in any one fund. My suggestion would be to put both portfolios (PRWCX vs. VDIGX/VWINX) in Portfolio Analyzer and analyze what comes up (i.e. SD, Sharpe, etc.). Also, how the portfolios perform during different time periods. If you like the results you may want to make the transfer in increments (10% per month). I own all three funds and am happy with all of them. - Wheaton

 

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yogibearbull
Contributor ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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@cegibbs , don't do this.

For comparable SD, you will give up lot of performance.

Note that my PV Run PRWCX VDIGX+VWINX is from 2002 when VDIGX changed from a utility sector fund to its current form [PV can run for longer but that is meaningless].

If you want to reduce risk, just use some VWINX.

YBB
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desmo
Explorer ○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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This is a replacement pairing for PRWCX for those of us who don't own any. It uses three funds to create identical SD with a better return. (USMV, JMUTX, BIAWX). See link.

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FD1001
Contributor ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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An easy switch will be SPY/VTI(I think you have it) to USMV.   VDIGX/VWINX combo isn't better than PRWCX.

Please remind me of all your funds. 

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Bartab
Explorer ○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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You could really go crazy and throw in a little VMVFX to cover a few other bases.  

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NoFriends1
Explorer ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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Honored FD:

Good Evening.

Does my memory serve me accurately that you have  previously advocated a Portfolio containing only PRWCX  and USMV?

And if so, in what percentages?

Signed,

NoFriends1

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cegibbs
Explorer ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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Excellent comments to my post.  Very much appreciated.

FD - I have a very trim portfolio holdings list:  PRWCX (85%); FXAIX 10%; TRBUX and cash (5%).  The aforementioned are approximate percentages.  

Pas Yogibearbull suggested, I think I will stay put where I am.  

View solution in original post

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Avvocato
Explorer ○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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Charles -

You might consider just going to VWINX/AX with that slug and leave VDIGX out of the equation. A PRWCX and VWINX/AX combo is not shabby, mi amigo.

Regards.

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FD1001
Contributor ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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If you replace FXAIX with USMV you get better results, see (link)

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cegibbs
Explorer ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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FD - you make a good point.  But all of my FXAIX is in a taxable account.  Probably doesn’t make sense to sell and pay capital gains.

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Anitya
Explorer ○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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Why is no one is suggesting reducing one allocation fund and increasing/starting a new moderate allocation fund?  I would have thought that would be a logical swap.   Are not there any decent moderate allocation funds open to new investors?  I do agree with wanting to reduce from 85% in PRWCX to reduce manager risk, as great as PRWCX is.

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blazetester
Follower ○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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PRWCX may be one of those rare funds that you hold, diversification be damned until either something changes with the fund or your personal circumstances change. Every time through the years that I would take some PRWCX off the table for diversification concerns, I ended up the poorer for it. PRWCX is 80% of our investments and there is no plan to change that anytime soon. 

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cegibbs
Explorer ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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Blazetester - I’m right next to you with 85% invested in the fund and its strategy.

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FD1001
Contributor ○○○

Re: Selling some PRWCX for a VDIGX/VWINX combo

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@Anitya wrote:

Why is no one is suggesting reducing one allocation fund and increasing/starting a new moderate allocation fund?  I would have thought that would be a logical swap.   Are not there any decent moderate allocation funds open to new investors?  I do agree with wanting to reduce from 85% in PRWCX to reduce manager risk, as great as PRWCX is.


There are generic investing rules but there are exceptions and PRWCX is one of them, you can dismiss it or embrace it.   Bogle liked just 2 funds SPY/VTI + BND and many agree but it's not OK to use PRWCX?

Last week was another proof, PRWCX was down only -0.2 and better than most.  Then, look at YTD performance and you got a winner again for 1-3-5-10-15 years (ranks 1-3 per category for these years).  Try and find another fund :-)

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sthanga
Explorer ○○

Re: Any idea why PRWCX is down a lot today

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I have about 20% in PRWCX, and is my largest equity holding fund. It went down by 1.29%. would appreciate any useful information on this. Is it due to the equity holdings it has, or approximately 25% high yield bonds it has or both. Is it normal?

Fidelity data is NAV decreased by 31.09 to 30.69 and it is 1.29%. MS* says the decline is -0.42% which is not right.

SRT

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cegibbs
Explorer ○○○

Re: Any idea why PRWCX is down by today a lot

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If you are concerned about the volatility of a fund over one day, week, month or year, then you shouldn’t hold it. PRWCX is approximately 80 percent of my entire portfolio. I believe in the long term strategy of the fund and the expertise of the fund managers that do a great job of leveraging TRP’s knowledge across all asset types.

I can not envision a time when this fund wouldn’t be at least 33 percent of my entire portfolio. Could possibly see mixing it with some combination of VWELX, VWINX, or possibly VDIGX or PRDGX. Even though I’m retired, I would never go less than 60 percent stocks.

Sent from my iPhone
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racqueteer
Participant ○○○

Re: Any idea why PRWCX is down by today a lot

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@cegibbs wrote:
If you are concerned about the volatility of a fund over one day, week, month or year, then you shouldn’t hold it.

There's nothing wrong with wanting to understand the functioning of the holdings of a fund.  That's not the same thing as being "concerned about volatility".  I don't know which is the reason for the post, but I'll take the poster at his word and assume he merely wants to understand.  In any event, it is ultimately a function of what the fund is holding, certainly.  The fund has been a little more defensive for a while now than in previous years, imo.  XLF, XLU, and XLP all took a little hit today.  I suspect there is some shifting of the market's focus in terms of the equity, and yes, there may be some issues developing with some of the 'bond' areas which have been performing well.  I, too, would be interested in knowing what accounts for what I perceive as an uptick in the volatility of PRWCX recently.  I wouldn't categorize my interest as "concern", however.  Interest?  Curiosity?  Sure; those.

 

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yogibearbull
Contributor ○○○

Re: Any idea why PRWCX is down a lot today

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@sthanga wrote:

I have about 20% in PRWCX, and is my largest equity holding fund. It went down by 1.29%. would appreciate any useful information on this. Is it due to the equity holdings it has, or approximately 25% high yield bonds it has or both. Is it normal?

Fidelity data is NAV decreased by 31.09 to 30.69 and it is 1.29%. MS* says the decline is -0.42% which is not right.

SRT


There was no distribution today. 

That -1.29% decline can happen on a day SP500 was -1.56%. Remember, it is a capital appreciation fund, not a moderate allocation as M* classifies it.

YBB
cegibbs
Explorer ○○○

Re: Any idea why PRWCX is down a lot today

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PRWCX is not a traditional balanced or moderate allocation fund.  The fund has three basic goals which, based on my memory, are as follows:  1) strong risk adjusted returns; 2) stock market (i.e., S&P500) like returns over a full market cycle; 3) not to lose money over any three year period.  The fund has consistently achieved the aforementioned goals since its 1985 inception.  I know of no other fund that has similar goals.

Also it is important to note that PRWCX is NOT an index-hugger.  The manager believes that there are typically only 20-30 stocks that are particularly attractive.  The fund tries to overweight those stocks and rarely holds more than 50-60 stocks in total.  Further, the fund also can and does hold many other asset classes such as high yield and traditional bonds, convertibles, options, etc.

I would highly recommend shareholders read all semi-annual and annual fund reports.  Maybe even go back and read some past years reports as well to better familiarize oneself with the fund strategy and overall approach to investing.  PRWCX is a very unique fund.

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