Permanent Portfolio funds vs. the 25x4

Discussion of funds that implement the Permanent Portfolio strategy

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Permanent Portfolio funds vs. the 25x4

Post by sophie » Tue Aug 29, 2017 7:48 am

Given the recent gold bounce, I thought it would be interesting to see how the Permanent Portfolio funds are doing. Some forum members have used these as a "one-stop shopping" way to access the PP.

That may not be such a good idea. In the past 5 years (August 2012 - August 2017), per ETFreplay, the 25x4 portfolio (VTI, TLT, GLD, SHV) with no rebalancing has returned 21.4%, compared to 6.9% for PERM and 10.6% for PRPFX. I can understand PRPFX since the investment plan is different, with the silver, Swiss francs, small bond slice and natural resource stocks, but I'm mystified about what's happening with PERM. The high ER (0.49%) explains only part of this. I wonder if the daily rebalancing is part of the problem, too.

In addition to their other disadvantages, you can't access the cash that's locked into these funds so you'd have to keep a separate emergency fund - which would further dilute the performance over the past 5 years. Conversely, the ETFreplay version of the 25x4 PP underestimates its performance, since as an individual you can rebalance, hold assets with lower expense ratios, and take advantage of high yield cash vehicles.
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Re: Permanent Portfolio funds vs. the 25x4

Post by whatchamacallit » Tue Aug 29, 2017 8:38 am

Some of the trouble for PERM must be the Stock allocation:

•        U.S. Large Cap Stocks 9%
•        U.S. Small Cap Stocks 3%
•        International Stocks 3%
•        U.S. Real Estate Stocks 5%
•        U.S. and Foreign Natural Resource Stocks 5%
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