DODGX - sell or keep [Dodge & Cox Stock Fund]

[TheQuestionGuy]

Its the 3 yr anniversary of holding DODGX.

Purchased $41K worth and after 3 years the total value is at $47K.

All I read about the DODGX (back then and now) is that its one fund at the core of all 401k holdings and a must have.

Based on that performance I just don't seen it.

Based purely on this performance would you continue to hold it?
If it wasn't for all the hoopla surrounding this fund I probably would have dropped it a while ago.

[jhfenton]

It's an OK active fund. It has disciplined management and not unreasonable expenses. If I had to own it in a 401(k), it would not be the end of the world. (I own DODFX, Dodge & Cox International, in my employer-sponsored HSA for just that reason.)

But given an unrestricted menu of choices, it's not a fund I would chose to invest in. It has slightly underperformed even other value funds, whether of the index variety (Vanguard Value) or the active variety (Vanguard Windsor II).

But I wouldn't sell it just because it has underperformed. I'd sell it because it is an actively-managed fund with higher expenses than other choices and no reason to expect outperformance in the future. I would say that even if it had slightly outperformed over the last 3 years.

[Phineas J. Whoopee]

OP is referring to the Dodge & Cox Stock Fund, DODGX.

OP: Whether to continue to hold it depends very much on the totality of your financial situation. You may wish to post in our Asking Portfolio Questions format. Also, it's more polite to include both the fund name and the ticker symbol. One gets more responses that way, too. In this case, because you're new, I've given you a helping hand.

PJW

[TheQuestionGuy]

...
But I wouldn't sell it just because it has underperformed. I'd sell it because it is an actively-managed fund with higher expenses than other choices and no reason to expect outperformance in the future. I would say that even if it had slightly outperformed over the last 3 years.

Interesting perspective and good information, thanks.

OP is referring to the Dodge & Cox Stock Fund, DODGX.

OP: Whether to continue to hold it depends very much on the totality of your financial situation. You may wish to post in our Asking Portfolio Questions format. Also, it's more polite to include both the fund name and the ticker symbol. One gets more responses that way, too. In this case, because you're new, I've given you a helping hand.

PJW

Yeah, I am the noob here.
I thought the ticker symbol would have actually been better to avoid confusion. Will include both in the future (you can bet I will be posting some more. )
I checked that reference provided (thanks) but was trying to keep this question generic and based purely on performance.
The reply by jhfenton was very good and sort of the type of feedback I was aiming for.

[Miriam2]

If you sold it, what would you buy?

[TheQuestionGuy]

If you sold it, what would you buy?

Planning to purchase Vanguard Dividend Growth Fund (VDIGX).

[Miriam2]

So you would be selling one stock fund that is not the total market and buying another stock fund that is not the total market, hoping the new fund will give you greater returns because in the past it gave greater returns?

[TheQuestionGuy]

So you would be selling one stock fund that is not the total market and buying another stock fund that is not the total market, hoping the new fund will give you greater returns because in the past it gave greater returns?

Yeah, sometimes I feel like I am just tossing darts at a dartboard with names on it. Lately the results reflect that too.

[Phineas J. Whoopee]

You may wish to stop tossing darts and start learning principles. Choosing funds is the last step, not the first. A good place to get started is in our wiki: Getting started.
PJW

[gundlached]

OP is referring to the Dodge & Cox Stock Fund, DODGX.

OP: Whether to continue to hold it depends very much on the totality of your financial situation. You may wish to post in our Asking Portfolio Questions format. Also, it's more polite to include both the fund name and the ticker symbol. One gets more responses that way, too. In this case, because you're new, I've given you a helping hand.

PJW

A venial sin, PJW

[pkcrafter]

Questionguy, Dodge and Cox, like Vanguard, is one of the few actively managed fund companies that stick to their strategy--they don't chase returns. Right now growth is outperforming value and that's why DODGX appears to be lagging. Note in this link that the two lower returns are for DODGX and Vanguard large value, VVIAX. The higher return is VG growth, which is similar to VDIGX. If you switch, it would seem like performance chasing. If your portfolio calls for large value, then stay with large value. Growth and value take turns outperforming.

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

Look at No. 2 in John Bogle's TellTail Chart--Value vs Growth

https://www.vanguard.com/bogle_site/sp20020626.html


Paul

[nedsaid]

Its the 3 yr anniversary of holding DODGX.

Purchased $41K worth and after 3 years the total value is at $47K.

All I read about the DODGX (back then and now) is that its one fund at the core of all 401k holdings and a must have.

Based on that performance I just don't seen it.

Based purely on this performance would you continue to hold it?
If it wasn't for all the hoopla surrounding this fund I probably would have dropped it a while ago.

Whoa, hold your horses. The reason that Dodge & Cox Stock Fund has underperformed is that it is a Large Value fund. Large Value has been underperforming the S&P 500 from about 2010 through 2015. So it shouldn't be surprising that it has been underperforming the Index. I wouldn't sell it just because it has been underperforming the S&P 500. The fund has performed in line with other Large Value funds. If you want to have a good value fund in your portfolio, you might consider keeping it.

I went to Morningstar and did a comparison with the Vanguard Value Index. Unfortunately, the Dodge & Cox product has been beaten badly by the Vanguard Value Index. The growth of $10,000 chart over 10 years shows $18,085 for Vanguard Value Index and only $16,280 for Dodge & Cox. Not good. I own a Large Value fund at my favorite mutual fund company and it shows $18,897. From that analysis, I am keeping my boring old Large Value fund. My fund has a manager that has run the fund since its inception.

So now you have to ask yourself, are the problems temporary? Did the fund lose a star manager who was a reason for its success? My guess is that you are probably right to sell the fund. The fund has been smoked by a Vanguard Index fund. Houston, we have a problem here. My uneducated guess is that they made some sort of sector bet that hasn't worked.

But you know how the "Nedsaid effect" works, the Dodge and Cox Stock fund will probably zoom the minute you sell it. If I owned Dodge & Cox Stock, I would be pounding the table and urging you to sell, acting like Cramer and pushing the buzzer. But the sale of your shares would probably cause mine to go up! In fact, I would be begging you to sell! But I don't own any Dodge & Cox fund and my cold rational advice would be to sell. But again, be prepared for the "Nedsaid effect." Doesn't always work but it seems to work most of the time.

I have owned active funds and I have been very, very patient with them as I believe in their underlying processes and their managers. Sometimes you have to let the cycles play out. In the case of Dodge & Cox, their 2016 year to date performance has been weak versus both the S&P 500 and Large Value in general. This has been a good year for value and Dodge & Cox Stock has not been participating. Not a good sign.

Based upon what I see, I would agree with you and sell the Dodge & Cox fund. If you want a Large Value fund in your portfolio, I would consider the Vanguard Value Index. If you don't want to Value tilt, then put the proceeds into an S&P 500 Index fund or a Total US Stock Market Index fund.

[nedsaid]

Morningstar still has confidence in this fund. The fund had big losses in 2008 and 2011 in part because of a large stake in financial shares. Financial stocks have long been a staple of Value funds and Dodge and Cox was not alone in getting slaughtered in the 2008-2009 financial crisis. This fund has very experienced managers and a very disciplined approach. Even good investment disciplines have their bad patches.

It really is up to you. My head would tell you to sell and my heart would tell you to keep the fund. It is a matter of whether or not you believe in the investment philosophy of the managers. These folks will stick to their strategy come heck or high water. Personally, if I owned it myself, I would keep it. Again, I have found that patience is a virtue.

[Northern Flicker]

Be advised that this fund (DODGX) has a fairly concentrated portfolio holding only 63 different stocks. It also currently tilts toward the technology, healthcare, and financial services sectors, which are already hefty sectors at cap weight. (To be fair, it also holds some E-mini's, which are S&P500 futures contracts, but the dollar value isn't enough to diversify the portfolio). Portfolio concentration gives the fund the opportunity to over or underperform significantly. You may want to direct new contributions and dividend/cap-gain distributions to a more diversified portfolio such as an index fund as a start. I have no opinion on the prospects for mean reversion of the fund portfolio.

[davidsorensen32]

I recently dumped 100% my Dodge and Cox holdings after suffering from their poor performance for 15+ years. Very happy since I moved to Vanguard. Ever since Harry Hagey retired, Dodge and Cox has been a poor fund. Harry was their alpha man. These days Vanguard is a slam dunk over Dodge and Cox.

Also, I hate their snooty, snobbish "holier than thou" , "we know better than you", attitude. Its one of those firms strictly reserved for the children of the blue-blooded "elite" of America. Just check their bios. Completely opposite to Vanguard. I think this is one of biggest reasons for their poor performance. They lost touch with reality and predatory feast on their customers to keep their extravagant lifestyles going. I'd much rather my money be managed by egalitarian Vanguard than paying for the private yatches of class obsessed elites.

[Toons]

Give it ten years,
Minimum.
Then revisit.

[nedsaid]

Ever since Harry Hagey retired, Dodge and Cox has been a poor fund. Harry was their alpha man. These days Vanguard is a slam dunk over Dodge and Cox.

I had wondered what happened. Manager change is often the culprit.

[student]

I recently dumped 100% my Dodge and Cox holdings after suffering from their poor performance for 15+ years. Very happy since I moved to Vanguard. Ever since Harry Hagey retired, Dodge and Cox has been a poor fund. Harry was their alpha man. These days Vanguard is a slam dunk over Dodge and Cox.

Thanks for the information. Looking at the chart, it seems that you are right that its performance slide started around 2006 when he retired. I also have a small holding in it.

[pkcrafter]

I recently dumped 100% my Dodge and Cox holdings after suffering from their poor performance for 15+ years. Very happy since I moved to Vanguard. Ever since Harry Hagey retired, Dodge and Cox has been a poor fund. Harry was their alpha man. These days Vanguard is a slam dunk over Dodge and Cox.

Also, I hate their snooty, snobbish "holier than thou" , "we know better than you", attitude. Its one of those firms strictly reserved for the children of the blue-blooded "elite" of America. Just check their bios. Completely opposite to Vanguard. I think this is one of biggest reasons for their poor performance. They lost touch with reality and predatory feast on their customers to keep their extravagant lifestyles going. I'd much rather my money be managed by egalitarian Vanguard than paying for the private yatches of class obsessed elites.

David, what fund(s) from Vanguard did you select to replace DODGX?

Paul

[DetroitRick]

I hold it too. As others have said, it's been a tough run for large cap value funds these past 5 years. But I consider this a core long-term holding and find there is still a lot to like about it - decent expense ratio, managerial depth, large asset base, low turnover, well-regarded parent. It's gonna have its off periods and I don't try to guess when value wins (because I can't). It fits my portfolio design and I will keep it. But consider your own situation in depth. If value has a particular place in your portfolio, I still think this is a decent choice.

[davidsorensen32]

VSMPX: Vanguard Total Stock Mkt Idx Instl Pls (VSMPX), ER = 0.02%

I recently dumped 100% my Dodge and Cox holdings after suffering from their poor performance for 15+ years. Very happy since I moved to Vanguard. Ever since Harry Hagey retired, Dodge and Cox has been a poor fund. Harry was their alpha man. These days Vanguard is a slam dunk over Dodge and Cox.

Also, I hate their snooty, snobbish "holier than thou" , "we know better than you", attitude. Its one of those firms strictly reserved for the children of the blue-blooded "elite" of America. Just check their bios. Completely opposite to Vanguard. I think this is one of biggest reasons for their poor performance. They lost touch with reality and predatory feast on their customers to keep their extravagant lifestyles going. I'd much rather my money be managed by egalitarian Vanguard than paying for the private yatches of class obsessed elites.

David, what fund(s) from Vanguard did you select to replace DODGX?

Paul

[davidsorensen32]

That was my thinking too. And I paid dearly for it. If you want large cap value buy Buffett's Berkshire Hathaway. If I had bought Berkshire instead of DODGX over my holding period I would have been richer by a sum in the six figures.

Learn from my mistake. Dodge & Cox is over. Stick to vanguard.

I hold it too. As others have said, it's been a tough run for large cap value funds these past 5 years. But I consider this a core long-term holding and find there is still a lot to like about it - decent expense ratio, managerial depth, large asset base, low turnover, well-regarded parent. It's gonna have its off periods and I don't try to guess when value wins (because I can't). It fits my portfolio design and I will keep it. But consider your own situation in depth. If value has a particular place in your portfolio, I still think this is a decent choice.

[pkcrafter]

I recently dumped 100% my Dodge and Cox holdings after suffering from their poor performance for 15+ years. Very happy since I moved to Vanguard. Ever since Harry Hagey retired, Dodge and Cox has been a poor fund. Harry was their alpha man. These days Vanguard is a slam dunk over Dodge and Cox.

Also, I hate their snooty, snobbish "holier than thou" , "we know better than you", attitude. Its one of those firms strictly reserved for the children of the blue-blooded "elite" of America. Just check their bios. Completely opposite to Vanguard. I think this is one of biggest reasons for their poor performance. They lost touch with reality and predatory feast on their customers to keep their extravagant lifestyles going. I'd much rather my money be managed by egalitarian Vanguard than paying for the private yatches of class obsessed elites.

David, what fund(s) from Vanguard did you select to replace DODGX?

Paul

Edit: moved reply to bottom for clarity

VSMPX: Vanguard Total Stock Mkt Idx Instl Pls (VSMPX), ER = 0.02%

[TheQuestionGuy]

I am baaaaaaaaccccccccccccckkkkkkkkkkkk.

Ok, it took a while and had to read the replies, do some research, read the replies again, do more research and so on.
Each time more and more started making sense.
Although I will be generating other threads, the topic will hopefully be more from an educated perspective instead of vague and broad.

You may wish to stop tossing darts and start learning principles. Choosing funds is the last step, not the first. A good place to get started is in our wiki: Getting started.
PJW

I thought it was going to be a short read but each link takes you deeper and deeper.

Questionguy, Dodge and Cox, like Vanguard, is one of the few actively managed fund companies that stick to their strategy--they don't chase returns. Right now growth is outperforming value and that's why DODGX appears to be lagging. Note in this link that the two lower returns are for DODGX and Vanguard large value, VVIAX. The higher return is VG growth, which is similar to VDIGX. If you switch, it would seem like performance chasing. If your portfolio calls for large value, then stay with large value. Growth and value take turns outperforming.

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

Look at No. 2 in John Bogle's TellTail Chart--Value vs Growth

https://www.vanguard.com/bogle_site/sp20020626.html


Paul

These were good reads too and sort of what you hear a lot of but people like myself rarely listen as we think there is an easy way to beat the market.

If I comprehended all the reading and got the basics it is to focus on the index funds for the long haul. Even if this is oversimplifying it I still have other questions which will appear soon.

Thanks again for taking the time to reply and educate.

[canbonbon]

VSMPX: Vanguard Total Stock Mkt Idx Instl Pls (VSMPX), ER = 0.02%

Was going through this old post. And if I am reading this right, VSMPX has min initial investment of $100,000,000 as in $100 Million???

Wow just wow!! People with that kind of money coming and posting on this board.

[Billavoider]

I hope the Op has an existing foothold in VDIGX, as it is closed to new investors.

[canbonbon]

I hope the Op has an existing foothold in VDIGX, as it is closed to new investors.

Why even bother with an actively managed fund and deal with Capital Gains every year? You could invest in VIG ETF instead if you can get it commission free.

[grabiner]

VSMPX: Vanguard Total Stock Mkt Idx Instl Pls (VSMPX), ER = 0.02%

Was going through this old post. And if I am reading this right, VSMPX has min initial investment of $100,000,000 as in $100 Million???

Wow just wow!! People with that kind of money coming and posting on this board.

Institutional funds are common options in large-company 401(k) plans. As long as the whole plan has $100M, everyone in the plan gets the benefit of the low expenses.

[Valuethinker]

Also, I hate their snooty, snobbish "holier than thou" , "we know better than you", attitude. Its one of those firms strictly reserved for the children of the blue-blooded "elite" of America. Just check their bios. Completely opposite to Vanguard. I think this is one of biggest reasons for their poor performance. They lost touch with reality and predatory feast on their customers to keep their extravagant lifestyles going. I'd much rather my money be managed by egalitarian Vanguard than paying for the private yatches of class obsessed elites.

In truth, if you can even make the link, you are confusing 2 different things.

The billionaires & their yachts are by and large not blue bloods. Peter Thiel certainly is not. Nor are most of the folk at Goldman Sachs.

Old money? It's around. But in the raw wealth game it has been shoved aside by the Schwarzmann's & Petersen's (Blackstone), Fink (Blackrock) etc.

PS Had a quick read of the CVs of the managers. All Harvard MBAs & Stanford MBAs-- the latter not surprising given the firm is based in San Francisco. But then so is Jeremy Grantham of GMO (who we tend to like around here). Warren Buffett has an MBA from Columbia (and his father was a stockbroker?).

Don't see any Rockefellers or Cabot Lodges in the list, though. No Haas (Levi Jeans). No Walton (WalMart). Nope, no obvious members of the great dynasties.

Note that David Swensen, who specializes in picking superior managers (in all asset classes) says that what you need in long equity managers is 1). long length of tenure 2). distinct investing style 3). manager ownership of the firm and thus direct stake in its performance. All of which D&C tick the boxes.

That they haven't done well of late is perhaps a marker of just how hard it is to beat the index.

https://www.dodgeandcox.com/stockfund_bios.asp

U.S. Equity Investment Committee
The Stock Fund is managed by the U.S. Equity Investment Committee. The eight members of this committee have an average tenure at Dodge & Cox of 23 years. The titles below reference positions held with Dodge & Cox, the Fund's Investment Manager.

Philippe Barret, Jr., Vice President — Mr. Barret received his B.A. degree (magna cum laude) from Washington and Lee University in 1998 and his M.B.A. degree from the Stanford Graduate School of Business in 2004. Between degrees, he worked as financial analyst at JP Morgan and American Securities Capital Partners, LLC. Mr. Barret joined Dodge & Cox in 2004. He is a shareholder of the firm and holds the CFA® designation.

Wendell W. Birkhofer, Senior Vice President — Mr. Birkhofer received his B.A. degree from Stanford University in 1978 and his M.B.A. from the Stanford Graduate School of Business in 1987. Prior to entering the M.B.A. program, he worked for six years with Wen Birkhofer & Co., an investment broker dealer firm in Los Angeles. He joined Dodge & Cox in 1987. Mr. Birkhofer is a former member of the Board of Governors of the Investment Adviser Association. He is a shareholder of the firm, a Chartered Investment Counselor, and holds the CFA designation.

C. Bryan Cameron, Senior Vice President and Director of Research — Mr. Cameron received his B.A. degree in Economics from the University of California, Davis in 1980 and his M.B.A. from the Stanford Graduate School of Business in 1983. He worked for Dodge & Cox for one year before entering the M.B.A. program and rejoined the firm in 1983. Mr. Cameron is a shareholder of the firm and holds the CFA designation.

David C. Hoeft, Senior Vice President and Associate Director of Research — Mr. Hoeft received his B.A. degree from the University of Chicago in 1989 (Phi Beta Kappa) and his M.B.A. from the Harvard Business School in 1993. Prior to entering graduate school, he worked for two years as a consultant to the energy industry. He joined Dodge & Cox in 1993. He is a Director and shareholder of the firm and holds the CFA designation.

Kathleen G. McCarthy, Vice President — Ms. McCarthy received her B.A. degree in Economics from Stanford University in 2001 and her M.B.A. degree from the Stanford Graduate School of Business in 2007. Prior to graduate school, she worked at Merrill Lynch and Palladium Equity Partners. Ms. McCarthy joined Dodge & Cox in 2007. She is a shareholder of the firm and holds the CFA designation.

Charles F. Pohl, Chairman and Chief Investment Officer — Mr. Pohl received his B.A. degree in 1980 and his M.B.A. degree in 1981 from the University of Chicago. He was with Wells Fargo Investment Advisors from 1981 until joining Dodge & Cox in 1984. Mr. Pohl is Chairman and a Trustee of the Dodge & Cox Funds. He is a Director and shareholder of the firm and holds the CFA designation.

Diana S. Strandberg, Senior Vice President and Director of International Equity — Ms. Strandberg graduated from the University of California, Berkeley, in 1981 (Phi Beta Kappa) and received her M.B.A. from the Harvard Business School in 1986. After two years as a securities analyst at the First Boston Corporation, she joined Dodge & Cox in 1988. Ms. Strandberg is a Senior Vice President of the Dodge & Cox Funds. She is a Director and shareholder of the firm and holds the CFA designation.

Steven C. Voorhis, Vice President — Mr. Voorhis received his B.A. and M.A. degrees from Stanford University in 1992 and his M.B.A from the Harvard Business School in 1996. Prior to graduate school, he worked at Goldman Sachs as a financial analyst. He joined Dodge & Cox in 1996. Mr. Voorhis is a shareholder of the firm and holds the CFA designation.

[canbonbon]

Institutional funds are common options in large-company 401(k) plans. As long as the whole plan has $100M, everyone in the plan gets the benefit of the low expenses.

OK yes that would make sense. Thanks for clarifying.

I reached here due to a reverse search. Just out of curiosity, I was looking for a Total stock fund or ETF with lower expenses than VTI (which is what I have). VSMPX is lower expense ratio but when I looked at initial purchase amount, I realized that I am many many millions short But I forgot that this could be part of a 401K plan where it is much easier to overcome this type of limit.

[cody69]

As others have mentioned, you'll do well to learn some background, and joining this site is a really good way to accomplish that!

Lots of ways to break down funds... one such way is are they actively managed or passive index. If you want an active managed fund, then D&C DODGX would be very high on my list. I invested with this company and fund when I started out investing. Their methodology, cost and overall approach fit what I thought I wanted.

Then, the more I read and learned, I decided a passive index approach was right for me. I realized I couldn't spend the rest of my life looking at fund performance and second guessing myself when a fund under-performed... that my nature would cause me to want to change something. I opted for broad index funds covering all markets, and am comfortable accepting market-based returns and not having to worry about fund manager performance.

Decide what is the right approach for you, then select your funds appropriately. And good luck!

[ruralavalon]

Its the 3 yr anniversary of holding DODGX.

Purchased $41K worth and after 3 years the total value is at $47K.

All I read about the DODGX (back then and now) is that its one fund at the core of all 401k holdings and a must have.

Based on that performance I just don't seen it.

Based purely on this performance would you continue to hold it?
If it wasn't for all the hoopla surrounding this fund I probably would have dropped it a while ago.

Dodge & Cox Stock Fund (DODGX) is a good actively managed domestic stock fund.

What are the other domestic stock funds offered in your 401k?

What your have may be the best offered.

[davidsorensen32]

Correct. I have it through my mega corp 401(k)

VSMPX: Vanguard Total Stock Mkt Idx Instl Pls (VSMPX), ER = 0.02%

Was going through this old post. And if I am reading this right, VSMPX has min initial investment of $100,000,000 as in $100 Million???

Wow just wow!! People with that kind of money coming and posting on this board.

Institutional funds are common options in large-company 401(k) plans. As long as the whole plan has $100M, everyone in the plan gets the benefit of the low expenses.

[SpringMan]

I thought I would add that VBS gives one access to PIMCO institutional funds which normally require $1,000,000 minimums for a much lower $25,000 minimum. They are not NTF (no transaction fee) but Flagship clients can use one of their free trades. I am a fan of PIMIX, Pimco Income Institutional. Since Vanguard has no multi-sector bond fund and with an ER of .45% PIMIX works for me.