Fund Research and Analysis
by David Kathman, CFAVanguard Primecap Core is a great core fund, for those with access to it.
On Aug. 14, 2009, Vanguard announced it was closing this fund to most new investors, the only exception being those with more than $1 million in Vanguard funds. The firm also imposed a $25,000 annual limit on share purchases by existing investors in this fund and its two larger and older siblings, Vanguard Primecap VPMCX and Vanguard Capital Opportunity VHCOX, which have already been closed for several years. Read more
On Aug. 14, 2009, Vanguard announced it was closing this fund to most new investors, the only exception being those with more than $1 million in Vanguard funds. The firm also imposed a $25,000 annual limit on share purchases by existing investors in this fund and its two larger and older siblings, Vanguard Primecap VPMCX and Vanguard Capital Opportunity VHCOX, which have already been closed for several years. Read more
Kudos
Very experienced, proven management team.
Managed in style reminiscent of that employed at uber-successful siblings Vanguard Primecap and Vanguard Capital Opportunity.
Low expenses.
Management trades very infrequently, enhancing the fund's tax efficiency and reducing transaction costs. Read more
Risks
Because this fund's advisor, Primecap Management, runs a lot of money using variations of the same strategy, asset bloat is a long-term concern.
Management's willingness to bet big on favored industries can sometimes backfire; witness the dismal showing of the Primecap fund's airline holdings during the bear market. Read more
Strategy
This fund's strategy is reminiscent of Vanguard Primecap's, with firms propelled by secular growth drivers taking center stage. As such, names are typically drawn from industries boasting improving unit growth, with the health-care, consumer, and semiconductor areas playing prominent roles. Read more
Management
Howard Schow, Mitch Milias, Theo Kolokotrones, Joel Fried, Alfred Mordecai, and Dave Van Slooten, who also run Vanguard Primecap and Vanguard Capital Opportunity, split the management duties here, with each manager running a sleeve of assets independent of the others. Read more
Inside Scoop
This fund is the newest offering from Vanguard run by the vaunted Primecap Management crew (which also runs Vanguard Primecap and Vanguard Capital Opportunity). Those managers are off to a great start here. Read more
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