“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.

Thanks! This statement (or 2) were informative. But also concerning that he sees investing as stocks or bonds not stocks and bonds.
“ How do you assess today’s investment opportunity?
We aren’t market timers, so I have no idea what 2022 returns will look like. But the further out we look, the more returns are based on fundamentals, and the more confident we are in our opinions. We believe that stocks are much more reasonably priced than bonds. The S&P 500 has a dividend yield that matches a 10-year government bond, and unlike a bond, its dividends and earnings are expected to grow. 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. We don’t own the concept stocks that the financial media spends so much time covering. Most of our portfolios are traditional businesses that have below-average P/E ratios.
One of the best investment strategies over the past decade has been to buy exciting businesses, regardless of price. It isn’t sustainable, in our opinion, and has resulted in an unusually large price gap between growth stocks and low P/E stocks. We believe that a reversal of that performance is warranted and is likely. We are well positioned for a return to normal.
And I have some rocks in my yard that are worth between $0 and $500,000 that I would happily sell for the bargain price of just $50,000!

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.

@mcmarasco thanks for the comment. There is a thread called Parnassus Endeavor Fund where I posted as well. Both threads are applicable. But as I’m viewing Value as important for my 2022 strategy.. I’m interested in feedback on this fund. Here’s my post there. I’ve been very happy with the 2021 performance. I just want to know why MFO is rating the fund so low for 1 year. I hold this in tax deferred so taxes don’t come into play for me.
January 5 edited January 5
Purchased some PARWX LY and have been happy with it. It was up 31 percent in 2021. Up 4.7 to peers, low Ulcer, good Martin and Sharpe…
Wondering why it’s a MFO 3 Rating for 1 yr. I think I may need a re-education on ratings. Can anyone shed some light? Referring to 1 yr rating on this fund as all other periods are 5 rating. TIA.
Edit/Add: Is it an overriding category issue?

I get that you guys are trying to be intellectually precise but how does one use that information? 15 seconds is real time enough for NAV for me. I make so many poor choices in a day that have nothing to do with stale data, I am not sure having more current information on NAV would improve my yearly portfolio performance. E.g., it takes me more than 15 seconds to put a trade through Vanguard brokerage.

Jan 7th 2022 Episode:

for the last 3 or 4 Saturdays, my physical copy of Barron's had not been delivered to my house. Dow Jones can't tell me why , and I assumed it was because no one on our dead end road was getting newspapers anymore, so they couldn't find a carrier.
This morning I noticed our library hasn't received a physical copy since 12/18 either.
Anybody else still get Barrons delivered at home? I do like to cut and tear out good articles

My alternatives sucked. Combined 1 week return = -1.45% (neg)
4 Funds included: TMSRX, ABRZX, PRPFX, QED
My equity & balanced sleeve did better. Combined 1 week return = -.0.56% (neg)
4 Funds included : PRWCX, DODBX, RPGAX, FLJP
I’ve never viewed alternatives as “defensive”. But, over the past, they’ve held up much better than the equity & balanced funds in rough markets. I should note that two equity funds owned (the larger being GLFOX) and 2 stocks owned are not included in the above totals. Those are part of a separate “real assets” sleeve.
For comparison, here’s a few I track (1-week / Lipper)
HSGFX +3.44%
PRFDX +2.61%
PRAFX 0
HSTRX -1.43%
VFINX -1.83%
TRREX -3.32%
TRBCX - 6.19%
PRMTX -7.18%
ARKK -10.75%
Some factors that affected markets this week:
- Interest rates shot up. This hurt most bond holdings. It helped funds with outsized exposure to banks / financials. This is evident in the positive return for PRFDX - TRP’s Equity and Income fund. However, rate sensitive sectors / funds were hurt. Price’s real estate fund, TRREX, fell 3.32%.
- Minutes from last FOMC meeting were released indicating a more hawkish Fed stance / Ditto above.
- Data released showed accelerating wage growth. / Ditto above.
- Gold and p/m miners got slammed, though they’re still above their lowest levels of the past 12 months.
- Tech got whacked.
- Price’s PRAFX, their real asset fund, appears to have suffered from Schizophrenia, ending the week flat - caught between the plunge in gold and precious metals mining stocks and the whirlwind upside for many other metals. This one holds a lot of real estate, which also hurt.
One interesting tidbit ….. DFND, an intriguing looking defensive long-short fund I’ve been watching, tumbled more than 5% in the week. Now, how do you accomplish that?

MyMoneyBlog, citing Bogleheads, has a good explanation of what happened.
https://www.mymoneyblog.com/vanguard-target-retirement-funds-nav-drop-cap-gains-distribution.html
In brief, in early 2021 Vanguard enabled lots of employer plans move money from the retail TDFs to the institutional TDF, by lowering the mins from $100M to $5M. Companies responded. There was a mass movement of dollars out of the retail TDFs, creating large cap gains for those remaining.
As pointed out in the blog, had Vanguard merged the funds first, then none of these plans would have moved money around and there would have been no large gains distributed.
So the gains were not because of the merger, but in spite of the merger.

Howdy folks,
I'm probably the oldest 'gold bug' around but no longer give it the same inflationary hedge status today as I have in the past. Bitcoin hasn't dethroned it but has reduced demand sufficiently on the margin to influence my decisions. Don't get me wrong, I'm playing the junior silver miners as I type.
Recall the Elder Baron Rothschild's advice that to protect your wealth, you wanted 1/3 in securities, 1/3 in real estate and 1/3 in rare art. It's this last category that can be tricky. It includes gold and bitcoin, and many other assets. It doesn't include cabbage patch kids, nor Beanie babies.
Good luck and wear the damn mask
Rono

Throw in sports cards to the "rare art" mix Rono. Since 2020, the hobby has gone through the roof. There's youtube videos of people charting card sales and gains like stock charts.

This is trial post here.
Pg L4: COVER STORY, “The Commodities Boom/Why It’s Time to Invest in COMMODITIES, and How to Do It”. Factors driving commodities include inflation, China and energy transitions. Bloomberg commodity index rose +27% in 2021 and more gains are ahead, especially for oil and ag-commodities. INFLATION is driven by pent-up demand and constrained supplies due to supply-chain disruptions. Greenflation is also contributing as the ESG movement has costs. CHINA is a huge consumer of commodities, and it is slowing. Its property sector is in trouble. Yet, commodities need China. ENERGY TRANSITIONS and ESG are driving the demand for several commodities. Rising energy and other prices feed into higher AG-COMMODITY prices. Plant substitutes for meats are boosting demand for several ag-commodities. WEATHER has been difficult in many areas. Most commodities are in BACKWARDATION (i.e., the prices of near-futures are higher than those for far-futures); futures-based commodity funds benefit from backwardation during their periodic future rolls. It is hard to find active commodity funds but an article in FundQ mentions 3.
Pg L7: COMMODITY indexes vary widely. The S&P GSCI commodity index has 60% in energy; the Bloomberg commodity index has 33% in energy, 33% in metals. Yet neither has lithium, copper, tin, metals essential for electrification. So, use active commodity funds such as PCRAX, CCSAX, BCSAX; indexed/passive funds are more common. Beware that commodity funds are volatile.
Pg L8: Be aware of several changes coming for 401k: More ESG options including the default options; guaranteed-income option (immediate or deferred/QLAC) at retirement included within the target-date funds (TDFs); pooled employer plan (PEP) 401k for small businesses. On the other hand, the Backdoor Roth IRA loophole will be closed. (This long piece is by @LewisBraham)
Pg L10: Amy DOMINI of Domini Impact Investments (AUM $3 billion in 5 funds) was an early ESG pioneer (Domini 400 Social Index/MSCI KLD 400 Social Index, KLD Research & Analytics that was bought by MSCI, books, etc). PERFORMANCE of ESG funds doesn’t lag general funds; in fact, they have better risk-adjusted performance. There is now appreciation that ESG is everybody’s business. There is work still to be done on ESG STANDARDIZATION and Europe is ahead on this. The SEC needs to get into this; the DOL is cleaning up the mess that it has created. Her funds use a combination of exclusions and inclusions based on ESG criteria (featured fund is DSEPX). They also use industry specific ESG standards. She notes that although Larry FINK of BlackRock/BLK makes lots of noises on ESG, BLK has a record of mostly voting with managements (Larry Fink/BLK declined comment). Her recent book, People, Planet, & Profit, November 2021.
Pg L36: In 2021/Q4 (SP500 +10.90%): Among general equity funds, the best was LC-core +9.80% and the worst was SC-growth +1.84%; NO category beat SP500. Among other equity funds, the best was real estate +14.42% and the worst was Japan -4.25%. Among fixed-income funds, LT -0.01%, world income -1.19% (not very refined in Lipper mutual fund categories listed in Barron’s).
LINK

ISTM that ETF’s occupy something of a “gray area” between traditional open end funds and closed end funds. Both ETFs & CEFs trade actively at prices determined by the market participants. Also, ISTM the heavy reliance of GLDB on derivatives / futures contracts must make calculating NAV precisely on a daily basis more difficult than simply “adding up the value of the underlying assets.” (my words). Since many open ended funds also use derivatives, they also face this issue.
Investopedia attempts to describe key differences between ETFs and CEFs. https://www.investopedia.com/ask/answers/052615/what-difference-between-exchange-traded-funds-etfs-and-closed-end-funds.asp
PS - Unless the forest was completely devoid of man, beast or fowl when said tree fell, there should have been sound. In any case, the sound waves are still echoing somewhere …

That 15 second delay was enough for the SEC to reject Precidian's original (2014) application for nontransparent ETFs:

The IIV is stale data. Unlike market maker proprietary algorithms, which rely on portfolio transparency and provide market makers with real-time data to effectively trade in today’s fast moving markets, IIV dissemination frequency is inadequate for purposes of making efficient markets in ETFs.27 Market makers operate at speeds calculated in fractions of a second.28 In today’s markets, 15 seconds is too long for purposes of efficient market making and could result in poor execution.29 Because an ETF is a derivative security, its current value changes every time the value of any underlying component of the ETF portfolio changes.30 Therefore, the IIV for a more frequently traded component security might not effectively take into account the full trading activity for that security, despite being available every 15 seconds.
For example, a large buy order for a component security held by the proposed ETF could temporarily spike the price of that security and, therefore, inflate the proposed ETF’s contemporaneous IIV calculation. 31 The IIV for the proposed ETF cannot adjust for such variations, whereas the NAV would.32 Therefore, relying on a stale IIV as a primary pricing signal for market making in Applicants’ proposed ETFs would not result in an effective arbitrage mechanism. 33

https://www.sec.gov/rules/ic/2014/ic-31300.pdf (footnotes omitted)

As @msf noted, intraday indicated values (IIV) may be for creation/redemption baskets. With refresh every 15 sec, how stale that data can be?
Note that Precidian ETFs and several others are the newer active nontransparent ETFs. These have different portfolio disclosure rules than those for passive/indexed ETFs (95-96%?).

The IIV (intraday indiciative NAV) is just that, indicative, not necessarily an accurate calculation of the current NAV. First, because it is usually calculated only four times a minute, so the value can be somewhat stale. More interestingly, it may not be accurate because it is calculated on something other than the precise instantaneous holdings in the portfolio.
It may be calculated based on yesterday's ending portfolio. That is, for example, the way Precidian Active Shares provide what they call a verified IIV (VIIV).

[T]he custodian on behalf of the fund will share the end of day NAV portfolio (NAVP) with an independent valuation agent. Rather than publically disclosing portfolio composition, the valuation agent will calculate and disseminate a Verified Indicative Intraday Value (VIIV) at one-second intervals the following day based on the NAVP

https://www.sec.gov/Archives/edgar/data/1499655/000114420419018151/tv518160_40-appa.htm
More customarily, the calculation, still performed by third parties, is based on daily creation baskets. The issue here is that creation baskets often do not precisely replicate what is in the portfolio.

In certain cases (e.g., some fixed income ETFs), the creation or redemption basket might contain different combinations of securities and/or cash relative to the overall ETF portfolio

https://www.sec.gov/Archives/edgar/data/1499655/000114420419018151/tv518160_40-appa.htm
It gives one pause to consider that an ETF might specify baskets for creating and redeeming shares (by authorized participants) that don't match. (This can be used as a mechanism for changing the holdings of an ETF.)
"The composition of the redemption basket typically mirrors that of the creation basket." But it doesn't have to.
http://www.understandetfs.org/creation_redemption.html

VIX was down 4.33% and closed at 18.76 today. It did not close below that level in December in the first 21 calendar days. And in 2022, it has not closed at 20 or above. Somehow the stock and bond market feels worse for everybody in 2022 than in December 2021. Is it the expectations gap / surprises in the market?

+1 msf I confused nav with market price. Thanks

I have some reluctance to invest in multi-asset funds or some x-y-z strategic funds. I view my portfolio as a multi asset personal strategic fund in itself. My first objection is I don’t want find someone else’s strategy turning around and working cross- current to what I want. Next I want to invest in assets not ideas. I view assets as stocks, bonds, land, gold, and cash. Common stocks are bought in companies I think will make me some money. Right now it’s housing, water, and infrastructure. Bonds are more a low volitility decision rather a money making try. Intermediate government bond have a historically negative correlation with equities. Not a positive return this year for IG ,but APOIX gave a 6% return in 2021. I buy gold because it’s not stocks or bonds and because the pharaohs valued it and we hoard it at Fort Knox. Despite all the talking it down, it seems to have some staying power. I doubt bitcoin will dethrone it. Land is not REITS. A reit fund is a equity fund of companies the manager is confident will pay their rent or mortgage. And cash is spending money, some that’s for now kept in money markets, some that’s for later kept in a mutual fund I think has low volatility. There is a lot, I mean a lot, of discussion about alternative and allocation funds. All of which I read but in the end I like my way more. Mom and the nuns always called me stubborn.
John

I have PMEFX in my 401 at Schwab.

Thanks @carew388. I remember your experience and was wondering if mine was similar. Yes - I can understand where with TRBUX, which is supposed to be highly liquid & immediately available to deploy, that would be an issue.
As far as GLDB goes … Fido showed the bid and offer prices when I begin to transact. So I understood the situation. ISTM I did sacrifice 10 cents per share (the bid prices were lower than the ask prices). Not much of an issue for me. Yes - I’m sure it’s lightly traded!
PS - What’s curious is I was able to get one of the 3 buys (the middle one) to go thru at “market.” So this liquidity gig must vary from hour to hour depending on flows.