Permanent Portfolio Fund - 2018 Returns.

Discussion of funds that implement the Permanent Portfolio strategy

Moderator: Global Moderator

Post Reply
User avatar
MarketIfTouched
Junior Member
Junior Member
Posts: 7
Joined: Sun Sep 09, 2018 4:46 pm

Permanent Portfolio Fund - 2018 Returns.

Post by MarketIfTouched » Sat Jan 19, 2019 7:38 pm

Wow. The Permanent Portfolio Fund really struggled last year...

From the website: http://www.prpfx.com/permanent-portfolio.html

Average Annual Total Returns (as of December 31, 2018)

Code: Select all

                YTD	   1 Year	 5 Years	10 Years	15 Years	Inception
Class I       -6.23%	   -6.23%	    1.33%	   4.97%	   5.70%	   5.77%

Expense Ratios	       Class I	
Gross Expense Ratio	  .82%
Last edited by MarketIfTouched on Wed Feb 13, 2019 9:25 pm, edited 1 time in total.
User avatar
sophie
Executive Member
Executive Member
Posts: 3072
Joined: Mon Apr 23, 2012 7:15 pm

Re: Permanent Portfolio Fund - 2018 Returns.

Post by sophie » Sun Jan 20, 2019 10:10 am

Yuck!!

There was an astonishing ~7% dividend on December 6. Yikes. Something crazy is going on under the hood - could this all be due to active stock picking?
User avatar
ochotona
Executive Member
Executive Member
Posts: 2663
Joined: Fri Jan 30, 2015 5:54 am

Re: Permanent Portfolio Fund - 2018 Returns.

Post by ochotona » Sun Jan 20, 2019 3:02 pm

Awful. One of you please start a real HBPP ETF and charge 10 basis points above the costs of the underlying ETFs.
User avatar
Kbg
Executive Member
Executive Member
Posts: 1313
Joined: Fri May 23, 2014 4:18 pm

Re: Permanent Portfolio Fund - 2018 Returns.

Post by Kbg » Sun Jan 20, 2019 3:20 pm

I wish starting an etf wasn’t so expensive. I’d love to start a leveraged one. I was listening to a MEB Faber podcast and in his discussion with who ever it was they were talking about etf start up and maintenance costs...not cheap.
D1984
Executive Member
Executive Member
Posts: 398
Joined: Tue Aug 16, 2011 7:23 pm

Re: Permanent Portfolio Fund - 2018 Returns.

Post by D1984 » Mon Jan 21, 2019 3:38 am

ochotona wrote:
Sun Jan 20, 2019 3:02 pm
Awful. One of you please start a real HBPP ETF and charge 10 basis points above the costs of the underlying ETFs.
Not a bad idea...although first I would I would like to see what percent of the the underperformance of PRPFX vs the HBPP was due to the mutual fund's allocation vs the "classic" PP (i.e. 15% aggressive growth stocks, 15% natural resource stocks and REITs, 35% US Treasuries of varying maturities, 20% gold, 5% silver, and 10% in Swiss Franc bonds and bills vs the 4 x 25% PP) and how much of it was simply due to ridiculous fees (0.82% on the I class and 1.08% on the A class) and to Guggino thinking he could outsmart the market by active trading (he couldn't and didn't).

GestaltU had two posts comparing the PP with PRPFX ( "Permanent Portfolio Shakedown" Pts 1 and 2) which clearly showed the PP outperformed from 1983 to 2012 but it was essentially a wash after the high expense ratio of PRPFX was factored out. This means that in a potential rising rate environment the PP might actually underperform PRPFX's allocation given that PRPFX--being modestly biased to protecting against inflation rather than deflation--has generally kept mostly to ITTs and STTs rather than LTTs for its 35% Treasury sleeve (IIRC it was calculated here on this very forum that PRPFX could be blended 92/8 with EDV to create a portfolio with approximately the same bond duration as the 4 x 25 PP).

One thing is for sure; if you could charge maybe 15 or 20 basis points (with a credible promise to reduce to 10 basis points once AUM was large enough) for PRPFX's allocation in an ETF you would only have to poach about 11% or 12% of the current PRPFX's assets to break even; from Meb's podcasts in 2014 and 2018 he and his guest pinned the one-time first year cost for registrations, SEC filings, etc as around $150K to $250K and then ongoing costs of actually running the fund at $200K to $250K (so the first year's cost could be as much as $450K or $500K but after that it would be only the ongoing costs you would have to pay). PRPFX currently has assets (across all share classes) of $2.03 billion; even just 10% of that would more than cover the ongoing costs and would basically be at break-even for the first year's costs (which means that after the first year you could cut the fee to 15 basis points, then 14, then 13, etc as the asset base got larger). Now, if we could just get a list of PRPFX's shareholders...... >:D
D1984
Executive Member
Executive Member
Posts: 398
Joined: Tue Aug 16, 2011 7:23 pm

Re: Permanent Portfolio Fund - 2018 Returns.

Post by D1984 » Mon Jan 21, 2019 3:39 am

Kbg wrote:
Sun Jan 20, 2019 3:20 pm
I wish starting an etf wasn’t so expensive. I’d love to start a leveraged one. I was listening to a MEB Faber podcast and in his discussion with who ever it was they were talking about etf start up and maintenance costs...not cheap.
A leveraged PP ETF or a 2X or 3X leveraged market timing one?
User avatar
Kbg
Executive Member
Executive Member
Posts: 1313
Joined: Fri May 23, 2014 4:18 pm

Re: Permanent Portfolio Fund - 2018 Returns.

Post by Kbg » Mon Jan 21, 2019 12:51 pm

Straight PP leveraged

Something PP risk parity-ish leveraged

With DualMo for the stock component leveraged

A PP with no cash (e.g. 33.33% to the other three) with the assumption you have your own cash elsewhere

And the above with different leverage amounts 1.25, 1.5, 2.0, 3.0
User avatar
ochotona
Executive Member
Executive Member
Posts: 2663
Joined: Fri Jan 30, 2015 5:54 am

Re: Permanent Portfolio Fund - 2018 Returns.

Post by ochotona » Mon Jan 21, 2019 2:55 pm

Kbg wrote:
Mon Jan 21, 2019 12:51 pm
Straight PP leveraged

Something PP risk parity-ish leveraged

With DualMo for the stock component leveraged

A PP with no cash (e.g. 33.33% to the other three) with the assumption you have your own cash elsewhere

And the above with different leverage amounts 1.25, 1.5, 2.0, 3.0
When Shiller's CAPE is between 8 - 10, I'll lever up. Not before then!
Hal French
Junior Member
Junior Member
Posts: 3
Joined: Thu Aug 09, 2018 11:46 pm

Re: Permanent Portfolio Fund - 2018 Returns.

Post by Hal French » Sun Jul 14, 2019 7:49 pm

I haven't contributed to PRPFX in nearly a decade , and lost 6% on it in 2018. So I was pleasantly surprised by my YTD statement telling me that my PRPFX increased by 10.79% through 6/28/19. After last year's notable divergence between HBPP and PRPFX results, I'll take it!
Post Reply