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Reply to @prinx: It would appear that it holds different assets in an attempt to do the same strategy (metals etfs instead of physical metals, etc.) Ron, I think, put it well.
A lower cost ETF was inevitable, as the management fee for the $16.8B AUM PRPFX was a high 0.76% for a relatively static portfolio having only a 9% annual turnover. Michael Cuggino and his small staff collects a staggering $55M in management fees per year to manage this portfolio. Clearly this fund is the cash cow of the family as the other funds in the family have very small AUM -- PAGRX ($23M), PRVBX ($12.5M), and PRTBX ($33M) -- and notably these other funds have had very mediocre to poor track records. Since Mr. Cuggino is clearly not a stock picking wizard based on his underwhelming performance at PAGRX, I have concerns about his actively managing about 30% of the portfolio (U.S. & Foreign Real Estate and Natural Resource Stocks; and Aggressive Growth Stocks).
I do not own either fund, but I am closely watching PERM as a low cost, diversifying element in my portfolio.
Reply to @kevindow: My concerns are likewise (add the fact that the manager has not, traditionally at least, had any investment in his fund), though a large number of folks have faith in PRPFX and have profited handsomely from their stakes in the fund.
And my interest in PERM is similar: lower cost, consistency, same underlying logic. The fund advisor's "case" for the portfolio is not compelling, but PRPFX does make part of the fund's argument for it.
Reply to @kevindow: Two of the more interesting differences I noticed:
PRPFX apparently holds actual gold (coins and bullion) as opposed to PERM which will invest in ETFs. I think most permanent portfolio followers strongly advocate holding physical gold (although they would also warn against putting it all in one place).
PRPFX has 5% in Swiss francs, presumably to diversify away from the dollar. Not sure how significant this is.
Comments
prinx
PRPFX: http://www.permanentportfoliofunds.com/pdfs/perm/PRPFX.pdf
PERM: http://globalxfunds.com/Investment_Case/PERM_Investment_Case.pdf
A lower cost ETF was inevitable, as the management fee for the $16.8B AUM PRPFX was a high 0.76% for a relatively static portfolio having only a 9% annual turnover. Michael Cuggino and his small staff collects a staggering $55M in management fees per year to manage this portfolio. Clearly this fund is the cash cow of the family as the other funds in the family have very small AUM -- PAGRX ($23M), PRVBX ($12.5M), and PRTBX ($33M) -- and notably these other funds have had very mediocre to poor track records. Since Mr. Cuggino is clearly not a stock picking wizard based on his underwhelming performance at PAGRX, I have concerns about his actively managing about 30% of the portfolio (U.S. & Foreign Real Estate and Natural Resource Stocks; and Aggressive Growth Stocks).
I do not own either fund, but I am closely watching PERM as a low cost, diversifying element in my portfolio.
Kevin
And my interest in PERM is similar: lower cost, consistency, same underlying logic. The fund advisor's "case" for the portfolio is not compelling, but PRPFX does make part of the fund's argument for it.
I'll watch.
David
PRPFX apparently holds actual gold (coins and bullion) as opposed to PERM which will invest in ETFs. I think most permanent portfolio followers strongly advocate holding physical gold (although they would also warn against putting it all in one place).
PRPFX has 5% in Swiss francs, presumably to diversify away from the dollar. Not sure how significant this is.