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Any reason to pick up Vanguard PrimeCap funds?

deeppizza
in Fund Discussions
I currently own shares in POGRX (PrimeCap Odyssey Growth), and recently got Flagship status with Vanguard which now gives me the opportunity to purchase their PrimeCap managed funds (VPCCX, VPMCX, VHCOX). It looks like they all have a good deal of overlap, but wondered if anyone thought it was worth it to put some money in the Vanguard funds, or just continue to contribute to my Odyssey Growth fund? If I was, I've considered going with Capital Opportunity (VHCOX) as I've read that it's the closest comparison to PrimeCaps's Aggressive Growth fund (POAGX), which I've wanted to get in to, but it's closed. Do you think that VHCOX is different enough from POGRX (or close enough to POAGX) that it's worth it?

Comments

  • msf
    I believe that even with Flagship status, Vanguard limits you to $25K per fund per account per year.

    It really depends on what you want to accomplish. The Odyssey funds are smaller cap (though still not small) and somewhat more expensive than the Vanguard funds. If you're considering POAGX, you're looking for something that's not so large cap and is more aggressive. The Vanguard funds (all of them) would be moving in the opposite direction. That said, these are small shadings of differences.

    A plus of investing in a Vanguard fund is that if you're just at the Flagship boundary, that will help you keep your Flagship status when the market dips.

  • randynevinrandynevin
    If you're young, willing to stay in a fund for a long time despite volatility, and can sleep well at night after a potential significant decline, you could add Capital Opportunity. If it were me, I'd be happy with POGRX, and just sit tight. If you overlay these funds on the same graph, you'll see they all have very similar performance profiles. The two that are somewhat different are Capital Opportunity, and Primecap Odyssey Aggressive Growth, which I would characterize as being more aggressive (and therefore somewhat more volatile) than the others (which are very similar to each other). I was fortunate to open an account in POAGX several years ago, and am very happy with it; I plan to hold it for a long time.
  • msf
    Comparing VHCOX and POGRX, the Vanguard fund is larger cap, less volatile (lower std deviation), slightly lower beta (relative to the best fit R3K growth) over the past three and five years, smaller downside capture. All of these suggest that VHCOX is, if anything, slightly less aggressive than POGRX. That's following your lead, equating aggressiveness with volatility.

    The two funds have essentially the same number of holdings (136 vs. 128) though VHCOX is slightly more concentrated (32% in top ten vs. 26%), similar sector allocations (except that VHCOX seems to favor industrials a bit more and financials a bit less), the same foreign/domestic ratio, the same developed/emerging ratio, perhaps suggesting that VHCOX is slightly more aggressive than POGRX in its holdings.

    I agree that VHCOX is the most aggressive of the Vanguard trio, but ISTM that it's not more aggressive than POGRX. It just happens to have done better over the past five years (though matched performance over the past ten). That makes is better performing, not more aggressive.

    FWIW, M* says of POGRX that it is already more volatile and aggressive than all three of the Vanguard Primecap funds including VHCOX, with POAGX even more so.
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