Vanguard Primecap Core

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HotRod140
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Vanguard Primecap Core

Post by HotRod140 » Mon Feb 09, 2009 6:41 am

Anyone have a opinion or even hold this fund in their account. I kind of like this fund as part of my total investment package

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DA
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Re: Vanguard Primecap Core

Post by DA » Mon Feb 09, 2009 6:54 am

HotRod140 wrote:I kind of like this fund as part of my total investment package
Why do you like this fund? Because the three year performance beats the benchmark by a couple of percent? That has zero predictive value for the future.

Dan

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rolleur
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I hold it, but not as core

Post by rolleur » Mon Feb 09, 2009 11:59 am

I hold Primecap Core in my Roth IRA as about 7% of my portfolio. It is certainly not a 'core' holding, but I keep around 20% in low-cost, actively-managed funds as a form of diversification (my other active holdings are International Value, and a non-Vanguard balanced pension fund). The management of Primecap Core has consistently created low-turnover funds in the past and that is something I look for in any fund.

If you keep any active funds you hold in tax-advantaged accounts I don't think there are too many reasons to avoid low-cost, low-turnover funds like Primecap Core. If you ever want to get out, you can do so without a tax penalty. Plus, you keep that little part of you that wants to outperform the index happy. If you've got that little part (like me), I can think of a multitude of worse ways to satisfy it than holding Primecap Core.

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Petrocelli
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Post by Petrocelli » Mon Feb 09, 2009 12:42 pm

I have not held Primecap Core. I have held Cap. Opp. and Primecap.

The Primecap team has done a great job beating their bogeys for years. Whether they will do so in the future is anyone's guess.

In the end, I like having some active management in my portfolio. Primecap Core is a good addition to a portfolio to fill the large blend/growth.

FYI, we had this discussion about 6 years ago, and it resulted in a Primecap vs. TSM "bet." Since the bet was made, Primecap has gained 1.07% and TSM has lost 15.57%. YTD, Primecap has gained .13% and TSM has lost 3.26%.

http://socialize.morningstar.com/NewSoc ... 15907.aspx

It appears that history is repeating itself.
Petrocelli (not the real Rico, but just a fan)

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BlueEars
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Post by BlueEars » Mon Feb 09, 2009 4:56 pm

One can create a TSM like allocation by mixing in VIVAX (large cap value), VISVX (small cap value) and VPMAX (primecap admiral or alternately primecap core). One mix is 42/46/12 vivax/vpmax/visvx. This M* style view looks like:
25 23 25
08 05 04
04 04 01

Over the last 15 years it's done better then VTSAX (total stock mkt admiral). The combo had CAGR=9.1% versus 6.5% for VTSAX. Of course, that is just history now.

Just thought I'd mention this as it's what is on my mind recently. I've owned Primecap for several years.

burge123
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Post by burge123 » Mon Feb 09, 2009 9:17 pm

I use a combination of Wellesley Income for bonds and value stocks, and PRIMECAP Core for my growth stocks. Not much in small caps, but a core producing combination for large caps.

burge123
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Re: Vanguard Primecap Core

Post by burge123 » Mon Feb 09, 2009 9:18 pm

DA wrote:
HotRod140 wrote:I kind of like this fund as part of my total investment package
Why do you like this fund? Because the three year performance beats the benchmark by a couple of percent? That has zero predictive value for the future.

Dan
Lighten up, DA...it's just a question.

Topic Author
HotRod140
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Vanguard Primecap Core

Post by HotRod140 » Tue Feb 10, 2009 6:44 am

Hey Burge

I was looking at doing something like you said. what do you think DA?

burge123
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Post by burge123 » Tue Feb 10, 2009 8:12 am

HotRod--
I've been happy with the VWINX/VPCCX combo--Solid returns and very little headache.

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DA
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Re: Vanguard Primecap Core

Post by DA » Tue Feb 10, 2009 7:24 pm

HotRod140 wrote:Hey Burge

I was looking at doing something like you said. what do you think DA?
Hi Hot Rod,

I'm one of the guys here (who burge123 seems overly sensitive to) who prefer index funds.

Wellington Management and Primecap Management have done a fine job with Wellesley and Primecap Core. Will that performance continue into the future? It's impossible for anyone to know. If you think the outperformance will continue, by all means go with these funds. Just remember that, over time, index funds outperform about 80% of actively managed funds. The primary reason they can do that is their low expenses.

While you're at it, if you're going to be depending on Wellesley for your bond allocation, surf on over to vanguard.com and take a look at the composition of Wellesley's bond holdings. It's almost all corporate bonds. Few treasuries. No TIPS. Not very diversified.

Whatever you decide to do, I wish you all the best.

Dan

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HotRod140
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Vanguard Primecap Core

Post by HotRod140 » Tue Feb 10, 2009 7:42 pm

Hey D

Thanks for the good wishes. I admit I am a novice with limited knowledge when it comes to bonds. I assume I am probably better off with total bond and some tips?

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DA
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Re: Vanguard Primecap Core

Post by DA » Tue Feb 10, 2009 8:05 pm

HotRod140 wrote:Hey D

Thanks for the good wishes. I admit I am a novice with limited knowledge when it comes to bonds. I assume I am probably better off with total bond and some tips?
50% Total Bond Index and 50% TIPS would be an outstanding choice.

Vanguard's Total Bond Market Index gives you short term bonds for when interest rates rise, long term bonds for when they fall and mortgage backed securities for when they stay the same. You don't need to worry about which sector of the bond market will do best because you will own them all (except high yield - which you don't need - and TIPS).

Buy your TIPS separately, through a mutual fund, etf or buy individual TIPS from your Uncle Sam. That will give your portfolio some great diversification and prepare you for unexpected inflation down the road.

Dan

Trev H
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Different...

Post by Trev H » Wed Feb 11, 2009 7:33 am

.
Below is something I like about PrimeCap CORE (in addition to the Growth at a reasonable price approach).

Many S&D type portfolio's suggest holding Large Blend + Large Value, or some hold TSM + Large Value (for large cap exposure value tilted).

If you check the top 10 holdings of Value Index you will find that TSM and Large Cap Index have 7 our of 10 in common.

If you check the top 25 you will find several more stocks in common between those.

Check Value Index and PrimeCap CORE and there are none in common.

I use Value Index and PrimeCap CORE for my US Large Cap exposure. I really don't care much for Growth at all but the slice that is dedicated to PrimeCap CORE is more of attempt to own Growth that is undervalued (reasonably priced growth stocks) applying a value approach to the growth exposure in my portfolio.

I have been in PrimeCap CORE since shortly after it opened and have been pleased with the choice, plan to keep it for the long haul. It is in IRA type account. The fact that it also holds some international Large GARP does not bother me at all, in fact I like that. My other internetional large cap exposure is all ILV, ILB.

Trev H

===

Value Index

1 ExxonMobil Corp. ***
2 General Electric Co. ***
3 AT&T Inc. ***
4 Chevron Corp. ***
5 Pfizer Inc. ***
6 JPMorgan Chase & Co. ***
7 Wells Fargo & Co.
8 Verizon Communications Inc.
9 Johnson & Johnson ***
10 Intel Corp.

TSM

1 ExxonMobil Corp.
2 The Procter & Gamble Co.
3 General Electric Co.
4 AT&T Inc.
5 Johnson & Johnson
6 Microsoft Corp.
7 Chevron Corp.
8 Wal-Mart Stores, Inc.
9 Pfizer Inc.
10 JPMorgan Chase & Co.

Large Cap Index

1 ExxonMobil Corp.
2 The Procter & Gamble Co.
3 General Electric Co.
4 AT&T Inc.
5 Johnson & Johnson
6 Microsoft Corp.
7 Chevron Corp.
8 Wal-Mart Stores, Inc.
9 Pfizer Inc.
10 JPMorgan Chase & Co.

PrimeCap CORE

1 Eli Lilly & Co.
2 Amgen Inc.
3 Novartis AG ADR
4 Medtronic, Inc.
5 GlaxoSmithKline PLC ADR
6 Roche Holdings AG
7 Oracle Corp.
8 Bed Bath & Beyond, Inc.
9 Intuit, Inc.
10 Marsh & McLennan Cos., Inc

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BlueEars
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Post by BlueEars » Wed Feb 11, 2009 11:21 am

Trev, thank you for pointing out the non-overlap of holdings feature. An observation, I noticed some month's ago Vanguard Large Cap Value Index had 8% in ExxonMobile and now it's up to 9.5%. I was surprised to see such a large single holding in an index fund (which I currently own).

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