Allocation Balanced fund seekers may want to consider taking a look at Permanent Portfolio Fund (
PRPFX Quick Quote PRPFX - Free Report) . PRPFX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance. Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as PRPFX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
PRPFX is a part of the Permanent family of funds, a company based out of San Francisco, CA. Permanent Portfolio Fund debuted in December of 1982. Since then, PRPFX has accumulated assets of about $2.64 billion, according to the most recently available information. The fund's current manager, Michael J. Cuggino, has been in charge of the fund since May of 2003.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.24%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.42%, which places it in the bottom third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 6.91%, the standard deviation of PRPFX over the past three years is 7.02%. The standard deviation of the fund over the past 5 years is 7.16% compared to the category average of 6.73%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, PRPFX lost 15.14% and outperformed its peer group by 20.99%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, with a 5-year beta of 0.3, the fund is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -2.26. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, PRPFX is a no load fund. It has an expense ratio of 0.82% compared to the category average of 0.84%. PRPFX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100.
Overall, Permanent Portfolio Fund has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
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