It looks to me VGHCX was a grand slam !!!
That's assuming investors have the stomach for it. It went through a patch where excluding withdrawals, it dropped 33.17%. How many people would have stuck with it, let alone taken the scheduled withdrawals, which would have increased the drop to 42.88%? And that's just month-to-month calculations. Daily peak to daily trough was likely worse.
That drop lasted the better part of two years (1 year, 9 months), and the fund took nearly an additional two years (1 year, 10 months) to recover.
Investors may have had an even harder time sticking with PRWCX: max (monthly) drawdown of 36.61% with no withdrawals, 45.38% including withdrawals. That fall took the same 1 year, 9 months as it did for VGHCX, though PRWCX recovered faster, taking "only" 1 year, 2 months.
(Some drawdown figures come from the "Drawdown" tab on the PV page.)
I'm not saying that past results including these bumps in the road aren't impressive, or don't suggest a good likelihood of doing very well by investing aggressively. I am asking, when people do encounter sizeable bumps (even with a small withdrawal rate), whether they will hang on. Unlike using an annuity, they have no guarantee of success with funds: "past performance does not guarantee future returns."
Unfortunately people have a tendency to bail at the worst times. One will do better by making a plan, any plan, whether it is self-managed retirement, an annuity, target date funds, or anything else and just unemotionally sticking with it.

It looks to me VGHCX was a grand slam !!!
Happy Easter, Derf

Using Portfolio Visualizer's portfolio analysis tool I wondered if the "safe withdrawal rate" data could be used as a substitute for an annuity rate. SWR is a historical data point that changes depending on the historical start and end date. An annuity is a guaranteed income based in part on today's low interest rates. Obviously two different approaches to securing income in retirement. I'd like to consider part of my retirement income being derived from a Safe Withdrawal of stocks, bonds, and alternatives.
Exploring some older mutual funds (VWINX, VWELX, PRWCX, and VGHCX) I discovered the following SWRs (found within the Metrics tab):
VWINX = 7.18%
VWELX = 8.02%
PRWCX = 9.16%
VGHCX = an astouding 14.31%
In other words, for each $1,000 invested in these four funds, each could safely pay out their SWR each year of:
Year 1:
VWINX = $71.80
VWELX = $80.20
PRWCX = $91.60
VGHCX = an astounding $143.10 (close to double VWINX's SWR)
note: the annual dollar amount would adjust based on the annual mutual fund's dollar value at the end of each year:
Using VWINX's SWR (I set the annual withdrawal of a fixed percent of 7.18%) and I tested all four funds over the past 35 years (back tested from 1986 - 2021). All four survived a 7.18% annual withdrawal. Both VWINX and VWELX ending "cash value" were impacted by inflation. The 2021 (inflation adjusted value) of VWINX being only $567 of its original $1,000 value. Both PRWCX and VGHCX value stayed ahead of inflation while paying out 7.18% annually. VGHCX's value grew four fold over the last 35 year time frame. As a result it paid out larger and larger amounts annually compared to the other three fund choices. While VWINX paid out a pretty steady amount over the 35 year time frame (between $70 - $100), VGHCX's pay outs grew from $70 in year 1 (1987) to over $400 - $600 annually (years 13 - 35).
Most annuities don't provide inflation riders and many do not offer a cash value upon death. So strictly speaking even VWINX would be a good substitute for an annuity that pays out 7% with a ending cash value of $1,351 (equivalent to $567 back in 1986). The other three funds were an even better "annuity income" choice at that SWR.
None of these funds busted (went to zero) at this 7.18% Safe Withdrawal Rate. In fact, VGHCX's inflation adjusted cash value was $4,141...four times what was invested back in 1986. In addition, VGHCX provided larger and larger annual income pay outs that kept up with (exceeded inflation). Will the healthcare sector, and more importantly this fund, continue to offer such great performance?
Here's the link to PV with these four funds. The "Metrics" tab has the data on SWR (Safe Withdrawal Rate). Let me know if you find a fund with a SWR higher than VGHCX (14.13%).
PV Link

Top holdings
Money market - 44%
BEPC
MSFT
AWK
HASI
DGRO
CII
VGHCX

Looking for usenet files that I've got scattered all over the place in backups of backups of backups, I ran across a posting of Ed's that I saved, from mid 1999. We can reasonably figure that I moved to FundAlarm some time early this century.
That post (after stripping headers):

Mike Roberts wrote:
> Please tell me which funds for the next 1,3 5, and 10 years will outperform
> the S&P 500 Index. What's that - I'm waiting............
Hi Mike,
I'm not Sal, but here's a list:
FSPHX, FSDCX, FSCSX, FSPTX, FDLSX, FDCPX, NTCHX, VGHCX, JAMRX, JAOLX,
JASSX, JAVLX. Do you need more?

The S&P 500 (as represented by VFIAX) dropped 19% over that span. Half of the six Fidelity Selects did better, half worse over 5 and 10 years. Only two did better over 3 years. Here's a graph for the Fidelity funds.
As for the Janus funds:
JAMRX was Janus Mercury at the time (it was renamed around 2006)
JAOLX was Janus Olympus at the time, and was merged into Janus Orion JORNX in 2006; this in turn was renamed Janus Global Select (with a new, global investment policy) in 2010.
JASSX was Janus Special Situations, which barely survived three years; it was merged into JSVAX Janus Strategic Value and renamed Janus Special Equity, which was renamed Janus Contrarian in 2004.
JAVLX was Janus Twenty, which was merged into JACTX Janus Forty in 2017.
Between the dot com bust and the 2003 timing scandal, Janus did not have a happy turn of the century.
As for the non-Fidelity, non-Janus funds, I think people know that VGHCX has always been a great performer, though it slowed down a bit in the past decade. NTCHX underperformed the S&P 500 in all timeframes in question.

VWINX most recently experienced a (-18.5 %) draw down (from its recent high on 2/21/2020) and a DD recovery of a little less than 4 months time (Feb - June). I spent some time today reviewing and comparing VWINX to other funds I own.
On a YTD basis many of my funds have returned to positive territory.
Allocation funds that I own that are positive YTD - PRWCX, VGSTX, VWINX - each roughly 2% positive
Allocation fund that is still negative - BRUFX - down 2%
Some other fund in the red YTD:
FRIFX - down 11% (riskier than I imagined)
THOPX - down 7.3% (Poor performance for what I consider a cash like fund)
FMIJX - down 16.8% (has had some recent big up days) - Toe hold
VMVFX - down 10.4% (this has been a surprise to me...very volatile recently)
POAGX - down 0.5% (Always surprises)
VHCOX - down 3.2%
VWO / VEIEX - down 9.3% - Toe Hold
Some funds in the black YTD:
VGHCX - up 3.9%
PRHSX - up 5.6%
FSRPX - up 11.4% (retail choices in this fund are far from dead)
FSMEX - up 2.6% (medical device companies have been good past performers)
PRMTX - up 19.95% (its recent DD was similar to VWINX, but its 100% Media and Tech)
PRGSX - up 8.6% (showing strong momentum from the bottom)
PRNHX - up 16.9% (wish...need to own more)
PRIDX - up 1.8% - Toe Hold
Cash like Funds YTD:
VFISX - up 3.3%
PRWBX - up 2.5%
PTIAX - up 0.1%
I try to identify and understand the downside risk (beta) in my holdings and getting more practice than I wish for. It is probably a more important dynamic than upside potential (alpha). Downside risk either bruises, cuts, or maims your portfolio. I'm trying to minimize the cutting and the maiming.
Anything surprising you in your portfolio?

@hank said,

My only suggestion would be that in the overall picture I think it more prudent to look at what a more diversified portfolio (focusing more on underlying assets) might generate long term than to focus on one or a handful of funds.

When I play with the PV website I am impressed with most Healthcare funds. Also Utilities sector funds have historically have offered higher perpetual rates. Both VGHCX (VHT) and VUIAX (VPU) look like great funds to own for retirement income.
As I mentioned, VWINX historically seemed offered a better perpetual rate than sister fund VWELX.
I would like to hear from others who have back tested their favorite funds. Obviously, all of this is historical data and needs to be naively appreciated for that.

I don't know enough to fool with any of the default settings.
These were the standouts.
GLFOX hits 7.03% at the 10th percentile.
DODGX at 5.36. Which was better than VDIGX 2.51 or VEIRX 2.65. Shoot. DODIX is at 2.82
NBGNX at 5.26%
FDFAX at 5.48
FBIOX at 4.15. By this test perhaps I should have held onto VGHCX instead of selling it, and splitting it between FBIOX and FSMEX. But I wanted to get away from the providers in their portfolio.
PRBLX is at 5.26%. So I'll keep that on my watch list.
Thanks for the link Bee. I'm not sure what I learned though. My plan is to spend down the IRA completely anyway. I hope to leave the taxable to the kids.

Using Portfolio Visualizer's Monte Carlo Stimulation feature, I back tested some of the funds I hold in my portfolio. As defind by PV, the Perpetual withdrawal rate is the percentage of portfolio balance that can be withdrawn at the end of each year while retaining the inflation adjusted portfolio balance.
@MJG's link here - https://portfoliovisualizer.com/monte-carlo-simulation#analysisResults
At the website, I switch Portfolio Type to "ticker". I entered the tickers one at a time and made the portfolio weight 100%. This provide me with stand alone data for each fund that I hold. I may later combine funds and weight them to see if the combined funds provide better overall results.
As I enter the phase of life where I will be spending some of these assets (using the 4% rule), I wanted to see how these funds fared as stand alone (asset concentration) and in combination with one another (asset allocation). Stand alone funds that provided the highest perpetual withdrawal rate at the 10th percentile (worst market conditions) were healthcare funds - VGHCX, PRHSX, FSMEX. This sector has historically had great risk adjusted returns. The big question is will they continue to be great funds to own into the future. I think so. Others that provided good withdrawal rates were - PRMTX (Communication & Media Tech Sector) and FSRPX (Retail Sector). Asset allocation funds that I own that did well were PRWCX (70 stocks/30 bonds) and VWINX (40/60). In fact, VWINX had a higher perpetual withdrawal rate than its sister fund VWELX when looking at the 10th percentile (worst market conditions).
Owning funds that have historically provide the best perpetual withdrawal rate in the worst market conditions (10th percentile) seems like a worthy review. Edited: adding criteria like "worst years first" makes your results even more sobering. Let me know your thoughts and how your funds fared using this criteria.

IMHO several others also could have been included in this list: VWINX VMVFX VTMFX VGHCX VDIGX and VWEHX .

Thx. Interesting. Vghcx Vanguard Healthcare was mentioned since 2000 wonder how it's doing if one after held all those Yrs (maybe way outperformed index spy dows)

Yes, beginning last Thursday and completing yesterday. I sold all equity funds down to a foothold status with the exception of VHCOX, RPMGX and VGHCX. the first two simply due to the protected nature of the share class in my account. Vanguard Healthcare remains fully invested due to it being what I consider to be defensive in nature. All foreign holdings are reduced to that foothold status since they're a mess.
Still, I have about 50% equities due to REITs and divi payers, which are currently safe havens.

I own ETIHX which I purchased at a bad time in 2015, right before the bio's dipped. I was going to sell, but didn't. Now I'm up 50%. With a relatively concentrated position of 70 or so stocks, they look to be good analysts in this space.
No leverage, but it does go into small bio's and is definitely a "risk-on" trade. Paring this with a combination of VGHCX could make a reasonable barbell position in healthcare as relates to risk. When the overall market takes a dive in the next 2 years or so, I'll be adding to this fund to make it a full position. Not for the squeamish though.
FWIW, I agree with the comments above on leverage. I make enough bad decisions without magnifying them.

If you have access to M* premium and look at the holding data (premium), you can see how the top 100 holdings did. (You'll have to do this within the next dozen hours give or take, before M* updates the daily changes for Friday).
If you export this into Excel (with a slight bit of tweaking to separate the day change/pct into two columns), you can sort by day's change to see what the big movers were.
FWIW, top winners by pct were:
Danaher Corp DHR (healthcare, LCB), up 4.47% (2.92% of fund)
Thermo Fisher Scientific TMO (healthcare, LCG) 2.20% (1.02% of fund)
PerkinElmer PKI (healthcare, MCG) 2% (2.39%)
Waste Connections WCN (industrials, LCG) 1.70% (1.06%)
Enterprise Products EPD (energy, LCV) 1.50% (0.66%)
Aramark ARMK (consumer cycl, MCB) 1.33% (1.6%)
DTE Energy DTE (utilities, LCV) 1.24% (1.49%)
Eversource Energy ES (utilities, LCV) 1.09% (1.36%)
NiSource NI (utilities, MCV), 0.97%, (1.21%)
The table doesn't give day change info on the bond holdings, but generally bonds did well yesterday, e.g. PTTFX was up 0.21%. So that had to help as well. That's consistent with utilities being near the top of the list above (for reference, VUIAX was up 0.96%). As Swen noted, the fund is overweighted in utilities (8% vs. 3% for category/benchmark).
The fund is even more overweighted in healthcare (21% vs. around 11% category/benchmark). Three of those stocks are at the very top of the list above. PRHSX was up minimally (0.03%) on the day, though VHCIX was down 0.40% and VGHCX was down 0.29%, suggesting that healthcare subsectors are not all the same. The second largest holding of PRHSX is BDX, which was up 0.34%, and represents 2.72% of PRWCX.

@VintageFreak, I own a number of funds that focus on sectors...Tech and Healthcare has worked long term (10+ years). I believe it will continue to be two important growth sectors going forward.
Sector performance in Healthcare sector funds like (VHT, PRHSX, FSMEX), or allocation funds like PRWCX (25% HC), and funds that overweight both Tech/HC (POAGX =65% Tech/HC) have also ranked high in their category for the last 1,3,5, & 10 years.
FSRPX is just a "freak of vintage proportion" in both up and down markets going out 30+ years... owning mostly consumer cyclicals...management here again is key.
FSRPX vs VFINX (1985- present)

A good manager manage risk and reward...call it luck when it works out...I call it success.
I don't second guess success...I just try to find it.
Interest article on Qualitative Driven Funds:
4-best-qualitatively-driven-mutual-funds-fsrpx-vghcx

@davfor, Thanks for your income recipe. I remember @rono always mentioning - "invest in what you buy". Your healthcare comments make me think that a health fund would serve almost all retirees well. My thought...add VGHCX or PRHSX to this recipe.
Also, you mentioned that you are managing this portfolio for your sister. This is as important as the income recipe - who will manage this portfolio? Even Warren Buffet has toiled with this concern (portfolio management) for his wife's portfolio and he suggests 90% SPY and 10% ST Bond (cash).
I believe she would take her yearly withdrawals from the cash side, then re-balance the portfolio once yearly.
KISS

Maybe its me, but I am an allocation guy when it come to paring down choices.
My H.S.A (@ Bruce Funds) will be BRUFX
My Roth IRA (@ TRP) will be PRWCX
My SD IRA (@Vanguard) will be VWINX or maybe even Global Wellesley, VGWIX
My Taxable account will be VTMFX
A 10-15 Year Trend Funds:
Health Care - PRHCX, VGHCX, FSMEX
Tech - PRGTX, FSITX,
Consumerism - FSRPX

One strategy that I have attempted to include as part of my portfolio review and yearly reallocation is to use "allocation funds" as the destination for other funds that need paring back. I consider these allocation funds as having attributes that served my goals well when I started investing and I now see them as serving a different goal in retirement.
I began my investing (call this my 30's) by first owning well diversified allocation funds such as VGSTX, OAKBX, VWINX, VWELX, DODBX, PRPFX, PRWCX, and others. These funds provided me with a way to funnel small contributions into one or a few of these funds based mainly on their availability to my workplace retirement plan. It exposed "my meager, but dear savings" into what I consider a long term well managed (hopefully), well diversified investment. These funds often had a history of good risk / reward, solid management, were reasonably priced (low ER ratio) and made "staying the course" pretty certain.
As my savings increased and my knowledge base grew (call it my 40-50's) I began realizing that I could create my own personal portfolio allocation using not only these funds, but a combination of "non-equity" funds (Bonds, RE, Commodities) and equity funds that had an "alpha/growth" strategy (sector, size, class, valuation, manager, etc.). These "fund combos" provided me with the biggest momentary losses and the largest momentary gains, but in the end have kept me up at night more often than the allocation funds I also still owned.
I began to discipline myself to trust my fund choices to "stay the course" and use these momentary ups and downs in the market to reallocate between the "non-equity" portion and the "equity" portion of these investments, but as I reach my 60's, 70's and beyond I see myself developing a third approach.
I see some of my low risk / low return "non-equity" funds along with some very conservation allocation funds as serving a roll in holding a portion of my portfolio for short term needs. (1-3 year, call these PONDX, PTIAX, CBUZX) for distributions of income, RMD, emergencies and retirement "fun".
I see the higher risk / higher reward "non-equity" funds along with the higher risk / higher reward "equity" funds as serving a roll in maintaining long term growth. (10 years and longer), and I'll place my stallions here (POAGX, VGHCX, FSRPX, etc). Note to self: "I have too many of these..."
I see my conservative, moderate & aggressive allocation funds as having a larger and key place in my retirement portfolio as the core of my holdings will occupy this space. These are investments have a (3-9 year) holding period that provide good portfolio diversification as well as "growth and income" to reallocate and "feed" ongoing (1-3 years) needs.
The Conservative Allocation fund (3-5 year) needs in VWINX, GLRBX or CBUZX.
The Moderate Allocation fund (5-7 year) needs in JABAX or OAKBX.
The Aggressive Allocation fund (7-9 year) in PRWCX or BTBFX).
Each of these allocation funds will periodically "feed" the 1-3 year funds over time.
Each of the long term funds (10 years or more) "feed" the allocation funds.
Hopefully there will be enough "feed" to go around.
If you have any thought on this approach or suggestions for potential candidates for:
1-3 year funds -
3-5 year funds -
5-7 year funds -
7-9 year funds -
10 and longer funds -
I'd appreciate it.

I'm really surprised that one of my very long-term investments, Franklin Mutual Global Discovery (MDISX), made this list, with an eye-popping outflow of 16%.
It has a great long-term record (even though Michael Price is just a fond memory). Solid team managing it. Guess that isn't enough.

I'm a recent buyer in MDISX, but not a meaningful position. I used to own it long time back when I was with E*Trade and it was NTF. However, I couldn't stand E*Trade and with it I had to exit my MDISX position. Now I'm back, and let's hope people fleeing MDISX is a contrarian indicator.
I also own MALOX in one of my retirement accounts and VGHCX for a trade.

@MFO: How about VGHCX, inception date 5/23/84, annualized return 16.63%.
Regards,
Ted