Versatile Bond Fund

[rllewis]

Harry used to recommend holding some of the cash portion in the Permanent Portfolio Family of Funds "Versatile Bond Fund."  It only invests in the highest quality corporate bonds. I have been doing that for a long time, and it has worked out.  However, I just got a letter from them that new changes to the fund "provide the Portfolio the opportunity to now invest of bonds of any type and maturity."  Does anyone know about this, and should I get out of this fund?

[AdamA]

For which asset class are you using this fund?

I don't really think it's appropriate for the PP, because it hold corporate bonds.

[rllewis]

Harry Browne recommended it for some of the cash portion.

[foglifter]

This fund doesn't seem like an appropriate vehicle for the PP cash. You don't want any market risk with cash - and corporates usually sink together with stocks.

I don't know why Cuggino still keeps this fund alive... miserable performance (practically flat for the last 3 years), high expense ratio, lack of interest (about $13 mln in assets). A short-term Treasury bond fund would do much better with less risk and expenses.

[craigr]

I would avoid this fund. It is expensive and significantly lags relative benchmarks due to active management. The Vanguard Total Bond Market, Vanguard Intermediate Term Treasury and Vanguard Short Term Treasury funds for instance beat it on every single metric of cost, performance, risk, etc. Actively managed funds (especially bond funds) have a notoriously bad track record vs. the index equivalent.