For the first time in at least 15 years, new investors can buy shares in two of Vanguard’s best-regarded actively managed mutual funds. In June, Vanguard fully reopened Vanguard Primecap (VPMCX) and Vanguard Primecap Core (VPCCX). Both funds are run by Primecap Management, described by Jeff DeMaso, editor of The Independent Vanguard Adviser newsletter, as, “arguably, one of the best active managers out there.”
Vanguard locked new investors out of Primecap in 2004 and out of Core in 2009, limiting existing investors to adding no more than $25,000 a year. The funds’ strong performances had attracted more money than the managers felt they could put to work in the long-term, value-priced growth opportunities they seek.
But in recent years, performance — especially at Primecap — has been lumpy. Investors have withdrawn more than $38 billion from Primecap since 2019 (leaving it with assets of $76.1 billion), and nearly $5 billion from Core (now with $13.2 billion). And, says Ryan Barksdale, who oversees Vanguard’s active stock funds, “the market has evolved,” creating new investment opportunities for additional cash. Both funds require a minimum initial investment of $3,000 for investor-class shares.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The two funds hold many of the same stocks. Both are tilted toward health care and industrial firms, and have benefited from a boom in Eli Lilly, which makes up more than 10% of each portfolio. Lilly has returned 94% over the past 12 months.
Although it can invest in stocks of any size, Primecap is currently weighted slightly more toward large companies. Charging an expense ratio of 0.38%, it has returned 27.5% over the past 12 months, beating the 24.6% return of the S&P 500. The fund gained 15.5% annualized over the past 15 years, compared with 14.8% for the S&P 500. Core, with expenses of 0.46%, has returned 25.4% over the past year; 14.7% over the past 15 years.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
-
Stock Market Today: Cautious Investors Let Stocks Drift LowerMarkets weigh encouraging trends for earnings and tariffs against concerning signals from U.S. consumers.
-
A Smart Way to Combat Economic RollercoastersSavings With rates on CDs remaining high for now, a CD ladder allows you to maximize your returns with flexibility to your cash when you need it.
-
Stock Market Today: Cautious Investors Let Stocks Drift Lower
Markets weigh encouraging trends for earnings and tariffs against concerning signals from U.S. consumers.
-
Buffered ETFs for a Rocky MarketBuffered ETFs provide protection during market downturns, but in exchange, your gains are capped.
-
Time to Spring-Clean Your Finances: A Financial Professional's Four Steps to Tidy Them UpA midyear review of everything from spending to saving, with adjustments as needed, can set you on track to financial security. Plus, don't forget to check in on your workplace benefits.
-
Why a Law Firm Secretly Recording Client Conversations Is Wrong (and Illegal)A law firm that has been recording client conversations without the clients' knowledge or permission and has threatened employees if they speak out faces legal and ethical challenges.
-
Stock Market Today: Markets Discount Another U.S. DowngradeAfter Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
