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im thinking about buying pvcmx for a low risk fund instead of a bond fund. i will appreciate all advise i receive. it has yield of 2.93%. it has never had a down year. in 2022 when just about every bond fund lost money, it made 2.93% and because of its large cash position if we have a market correction it will be able to put its cash to work at maybe fire sale prices.
Mr. Cinnamond has maintained a high cash (close to 50%) cash balance in this fund, thus the lower volatility. This has frustrated a few investors who do not like the idea of paying 1.26% Management fee to have their cash sit idle.
So it can be used as a means to an end (bond proxy) as long as he cannot find places to invest...which is most of the time. But yes, ideally he would time it perfectly and buy if/when stocks are getting crushed.
You're paying him a lot of money to allocate the way he does. If, in 2022, you had a similar allocation to BUBIX, USFR, and one of several dividend-oriented ETF's, you likely would have done as well as PVMCX. The difference is, you would have control of the allocation at a lower price in the years since then.
@ducrow, I own shares in PVCMX. It is a fund that has grown slowly and did not lose value during the COVID bear market or 2022 bear market. It has performed about as well as small cap funds over the past six years with less volatility. It is a small part of my portfolio, and a diversifier.
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So it can be used as a means to an end (bond proxy) as long as he cannot find places to invest...which is most of the time. But yes, ideally he would time it perfectly and buy if/when stocks are getting crushed.