All this talk in DC about taming the highest inflation in 40 years has the fed fund futures traders spooked and they are now projecting 4 rate hikes (in Q1, Q2, Q3, Q4) at the CME FedWatch.
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

DODBX at $15B is very small compared to VWELX, PRWCX, & FBALX to name a few. It had outflows consistently in the past 10 yrs per M*, even though some of those years performance was quite good. Any comment on the outflows? Not sure if it is the Value style. VWELX gave up its Value style recently.

Good question. Money today is fickle.To the extent money has fled DODBX in recent years, here’s some possible reasons:
- Dodge & Cox equity funds (including DODBX) faired poorly in 2008. They got caught leaning the wrong way on some financials early on and never recovered. DODBX lost 33.5% that year. (By contrast, PRWCX lost 27% in 2008.) Prior to that, D&C had been a board favorite and had seen steady inflows. It’s the old saw about reputations, like china, being easily damaged and hard to mend.
- There’s a long held perception that DODBX is bloated. Gained traction during the ‘07-‘09 bear market. While accurate, investors seem to overlook that PRWCX has greatly outdistanced it in AUM over the last decade.
- There’s an aversion nowadays to typical 60/40 “balanced” funds owing to low interest rates and a belief (true to some extent) that bonds no longer offer protection. This weighs against DODBX in investors’ eyes. Overlooked is that DODBX is actually more of a 70/30 fund. And perhaps unknown to some, it’s been holding a 5% short position against the S&P. Further, its heavier than average weighting to financials stands to benefit investors as rates rise.
- D&C underplays the significance of individual managers. Committees make the big calls, as I’ve understood them. Given the choice between investing with a bland committee or a well known figure with the aura of a David Giroux*, the latter likely wins out among today’s investors.
- D&C does not make their funds available NTF at brokerage houses. That has to hurt inflows and may lead to outflows.
* Not pertinent to the question, but I should note the performance of DODBX and PRWCX are quite similar. Over the past year DODBX led, gaining 18.9% to PRWCX’s 16%. Over 10 years, PRWCX wins at 13.36% compared to 11.91% for DODBX.

DODBX at $15B is very small compared to VWELX, PRWCX, & FBALX to name a few. It had outflows consistently in the past 10 yrs per M*, even though some of those years total return performance was quite good. Any comment on the outflows? Not sure if it is the Value style. VWELX gave up its Value style recently.

Sounds like an acknowledgment by D&C that the typical 60:40 equity:bonds portfolio just isn't going to cut it anymore. They may be having PRWCX envie, maybe?

Correct.
Let’s hope their “cure” isn’t worse than the disease. I’ve been scaling out of DODBX as it’s risen the past couple years. Still hold a bit. In the event of a big market selloff, I’d probably buy into one of their equity funds.
One year performance (from Lipper): DODBX +17.85% / PRWCX +15.08%. However, at 3 & 5 years out PRWCX holds a slight edge. This is a radical move from a very conservative house. What comes next? Maybe D&C funds NTF at Fido, Schwab, etc.?
If you haven’t read Ed Studzinski’s column in the January Observer you might. He mentions “firms in the San Francisco Bay Area which face a problem of unaffordable housing costs for junior professional staff.” He mentions these employees having to commute long distances to work or reside in crime ridden areas. D&C is headquartered in SF - so I’d guess they’re one of the referenced here - but there’s a chance I’m wrong. In any event, read for yourself.

I fail to see where they’ve yet changed the approach. The 2-3 page statement sounds like it was written by a committee. I might ask “Why change now?” since the past couple years seem to have been very good considering the type of fund. In recent years they’ve kept close to 70% in equities - higher than their “balanced” designation might suggest. ISTM they’ve had near 20% foreign holdings in the recent past, if not now. One concern will be fees. If they go into alternatives that may jack-up fees a bit.
Interesting line. Wonder what date they made this shift? Obviously the past couple weeks have seen some modest yield increases.
“More recently, we have reduced the Fund’s equity exposure in light of higher equity valuations and modestly more attractive bond yields.”

Thanks. I hope this thread can discuss investable funds in the subject space.
As an aside, I took your chart back to 10 years. XLE total return was only 20% while ICLN had nearly 10 times as much. Seems like investors have been working out the transition for a while.

OAKMX and OAKLX did not beat SPY during the last 10 years, but since inception of OAKLX in 1996, it is up 1780%, whereas SPY is 936% up, and VTV (Vanguard Value) is 761%. Thus OAKLX significantly outperformed both S&P 500 and Value index since inception. I would not necessarily bet my house on its future outperformance, but I take Nygren's opinions seriously.

“We expect equity investors to perform well relative to bond investors over the next decade. We also believe that our portfolios are more attractively priced than the S&P 500.”
Hard to disagree as worded. “our portfolios” doesn’t mean the same as what you, I, or somebody else may own. And they seem to disavow the S&P. Unfortunately, we’ll have to wait 10 years to see if the manager’s perceptions re his portfolio are accurate.
Note that the blurb does not differentiate among bonds, lumping all into one hopper. Well, now, there are short, intermediate and long term bonds. Corporate and sovereign. Investment grade and poorer quality. U.S. domiciled and those from other nations. And, there’s EM as well.
I think for many of us the past week is a great opportunity to compare how different asset class we held faired compared to one another. It hasn’t been too often that so many different assets suffered together (Maybe Qtr 1, 2020?).
When all is said and done, I’m glad I had exposure to bonds last week. RPGAX (30% bonds) fell 1.48% as compared to PRWCX which lost over 2.0%%. My worst performing bond fund, DODIX, fell 1.07%. In contrast, my worst performing equity holding, WPM, fell over 10%. Equity funds themselves were all over the place of course. Those heavy into banks saw gains. Similar variance existed among various alts, long shorts, etc. PRPFX surprised, losing just 1% for the week, despite exposure to gold, bonds and growth stocks.
So, if you have a 10 year or longer time horizon and can live with higher volatility, send your $$ to the folks at Oakmark. BTW - I read a lot of Dodge & Cox’s commentary. They might well have written the same blurb.

I own BGAFX and MIOPX, have had for several years. My reasons for buying are still valid, so I am holding and will add/rebalance if this slide continues. Both are MFO Great Owl funds with proven management. They hold foreign and global high quality GROWTH stocks, and the rotation to value is evident. I had trimmed a bit from them in the fall as part of my regular rebalance, along with some risk reduction at the time. If I were to sell now, I think I’d be making the same mistake I’ve made in the past… watch a great fund fall, and sell at lows. These are more B&H core funds.
Best of luck,
Rick

@Derf, Not sure if the following is what you are asking -
If the fund prospectus provides for exchanges between classes (i.e., conversion), then one can exchange (convert) tax free, and the prospectus would say it. These conversions are pretty routine for a lot of fund families. But certain brokerages may not participate in conversions, in which case, one is stuck with selling one class and buying the other in a taxable transaction, subject to wash sale rules or simply transfer the fund out to another brokerage that participates in conversion and convert there. (E.g., Schwab did not convert until a couple of years ago and I have no knowledge of their current status but Fidelity converts quite routinely.) If a fund is closed to new investors, that prohibition may extend to conversions.

"(I personally faced a similar decision years ago. I owned service class shares of a fund. The A shares, with a slightly lower ER, were subsequently offered load-waived. The fund declined to do a tax-free exchange for me. So I continued to hold the higher cost service class shares.)" as per @msf
Does that decision still hold today ? In other words does the fund , any fund, dictate if the exchange is taxed or not ?
Thank you much, Derf

What happened was that investors sold retail fund holdings and purchased institutional fund holdings. Such a move would have been a taxable event had it been done in taxable accounts, but employer plans (e.g. 401(k)s, 403(b)s) are tax sheltered.
If someone had between $5M and $100M in a taxable retail TDF, it is unlikely that one would have sold shares (recognizing personal cap gains earlier in 2021, before distributions). The cost of the taxes on the realized gain would likely have outweighed the benefit of switching to a lower ER fund.
(I personally faced a similar decision years ago. I owned service class shares of a fund. The A shares, with a slightly lower ER, were subsequently offered load-waived. The fund declined to do a tax-free exchange for me. So I continued to hold the higher cost service class shares.)
Investors weren't selling off shares because they wanted out. They were just moving to a lower ER replacement fund. So whether retail or institutional series had higher unrealized gains seems somewhat moot. That said, I agree that the younger institutional series was likely to have had lower unrealized gains.
Since Vanguard decided to merge the series entirely, there wouldn't seem to be much point in merging the employer plan investors and then months later merging the rest of the investors. Had Vanguard given this enough thought to realize that the first change (lowering the institutional min) would trigger the mass migration, it could have skipped that step completely and merged everyone at once.

Sold TMSRX in 2021 with some small profits. I did the same thing with ACVVX QMNNX PAUAX MFLDX years ago. ADANX is on my watch list and I may reduce my holdings in that one. Once they start declining I'm gone, because I don't have confidence that these funds work in every market. There's enough funds like BAMBX CVSIX ARBOX VARAX that continue to work for me. I probably should just simplify and go with funds like VWINX AONIX EXDAX FIKFX .

I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

Just curious, when did you start buying ARKK and ARKG? Is it for a trade or a long term portfolio holding?
I did buy a little bit of ARKK yesterday. I am not putting any money into ARKK that I can not afford to lose. This is not Cathy's first rodeo but I do not see any trophies from past rodeos.

Long term, first buys June 2020. Even in ARKK. Down 8% in ARKG. buying only the big dips. I think this will work out over time, or at least do better than the broad market.

@LewisBraham, that is why Vanguard replaced IT/LT TIPS VIPSX with ST TIPS VTAPX a few years ago in its VG target-date fund (TDF) series.

I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

Just curious, when did you start buying ARKK and ARKG? Is it for a trade or a long term portfolio holding?
I did buy a little bit of ARKK yesterday. I am not putting any money into ARKK that I can not afford to lose. This is not Cathy's first rodeo but I do not see any trophies from past rodeos.

@Hank, I don't own it; did own HSTRX about 12 years ago for a while. A friend owns HSAFX now and isn't too unhappy with it, but you know what they say about a stopped clock.
But then the best I did yesterday was zero from NVHAX, EIXIX, and PQTAX.

I'm a Cathie Wood fan. You need out of the box conviction if you really want to outperform. I remember watching her on CNBC a few years ago where she explained her TESLA thesis while many others were talking about eventual liquidation or acquisition. No investment style can work all the time, because if it did it would be duplicated or arbitraged and end up not working at all. If you want a 100% plus up year you need to accept 30% down some time. I am slowly picking up shares in ARKK and ARKG.

@wxman123 -- Bank MM funds yield around 0.4 to 0.5%. FDIC insured so 100% risk free. Are you expecting your near cash holdings to provide a higher return?

Yes, that would be the objective but doesn't always work out. Over the longer term, these "near cash" vehicles should outperform high yield FDIC insured bank accounts, but that's not generally how I use them. I mainly use them in retirement accounts where the only viable, comparable option is near zero MM funds. Over the last 3 years VNLA has earned a total return of 2.39% with very little heartburn. I don't think you could have gotten that even in the highest yielding fully liquid bank accounts.

I would probably opt for STIP for short-term TIP exposure, lower fees 0.05% versus 0.15% and shorter maturity bonds--0-5 years--so less sensitive to rising rates. VTIP also has lower fees. But TIPS in general look pricey right now.

Still not phrasing my question well, evidently.
Higher fee notwithstanding, TIPX has outperformed those other two competitors handily for 9/5/3/2y, but has trailed, nontrivially but perhaps unimportantly, 1y and less, meaning recently. Was wondering about any informed thoughts as to that, and longer-term prospects for any of them.