Gyroscopic Investing

What a tool!

Cuggino called the fund’s expense level fair.
“If people think they can replicate us, I say, ‘Have at it. Good luck,’”? he said.

jmourik wrote: What a tool!

Cuggino called the fund’s expense level fair.
“If people think they can replicate us, I say, ‘Have at it. Good luck,’”? he said.

It looks like PRPFX is collecting around $92,000,000 a year in management fees.  That seems pretty high to me for what is basically a static asset allocation.

What would be hard to replicate would be the huge pool of assets PRPFX has under management.  Given the same pool of assets, however, I am pretty sure you could run the fund for half of what it is currently charging (if not a lot less).

Nice work if you can get it. 

It doth seem a bit much expense-wise.

MediumTex wrote:

jmourik wrote: What a tool!

Cuggino called the fund’s expense level fair.
“If people think they can replicate us, I say, ‘Have at it. Good luck,’”? he said.

It looks like PRPFX is collecting around $92,000,000 a year in management fees.  That seems pretty high to me for what is basically a static asset allocation.

What would be hard to replicate would be the huge pool of assets PRPFX has under management.  Given the same pool of assets, however, I am pretty sure you could run the fund for half of what it is currently charging (if not a lot less).

Can you imagine how successful someone would be if they started a real permanent portfolio mutual fund?

How do we go about doing it? 

Reub wrote: How do we go about doing it? 

There is a tremendous amount of red tape and expenses involved. You would probably need at least 250k just to get the ball rolling. The annual fees for compliance, regulations, accounting, salaries, etc. would mean you'd have to charge a much higher fee than PRPFX in all likelihood until your assets became very large. By that point the hot money will be onto something new and available new assets would probably shrink.

Cuggino should be banking that money while he can. The party for the fund may end one day if he has a year or two lagging the stock market. Dumb money always chases hot returns and doesn't stick around.

craigr wrote: ... There is a tremendous amount of red tape and expenses involved. ...

I guess that's why he can say ‘Have at it. Good luck’.
I'm sure most of us run our personal pp for a lot lower expense ratio...

Talking about being at the right place at the right time. I hope he thanks his lucky stars regularly!

If it was a closed ended fund, then perhaps it wouldn't matter if dumb hot money liked or disliked it? If it was very transparent what the holdings were then would there be much of an issue with it trading at a discount/premium? Perhaps the share price would always closely track the NAV just because shareholders would know what it held?? Is there a tax problem with holding treasuries in a closed ended fund?

Wow, Harry didn't get a whole lot of credit in that article, did he. It's almost as if he had been on the sidelines while Mr Coxon created this ingenious asset mix.