The allocations in the fund are completely static, and there is almost no active management going on.  You can replicate the fund by yourself by buying a few funds and ETFs for much cheaper.  I still don't understand why people buy this fund.

Dao
 

Dao,

Thanks for your info. Could you be more specific on the funds and the ETFs that replicate the fund? Thanks.

Artie 

Morningstar shows recent purchases of new positions in this fund. So I wouldn't exactly call it static. I opened a position in this fund today.

 Jim

The idea behind PRPFX seems to be reasonable enough, but it is expensive for a fund providing a static allocation of

Gold ......................... 20%

Silver ....................... 5%

Swiss Franc Assets ........... 10%

U.S. and Foreign Real Estate

and Natural Resource Stocks .. 15%

Aggressive Growth Stocks  .... 15%

U.S. Treasury Bills, Bonds and

Other Dollar Assets  ......... 35%

There is no good reason to pay an ER over 1% for a fixed allocation to t-bills -- with t-bills yielding about 1% right now, you would currently be losing money on that portion of the pie.  And, of course, you can buy the t-bills with no expense ratio at Treasurydirect.

And there are ETFs that cover all of these classes much more cheaply.  Breaking it apart would allow you to allocate your assets in a more tax-sensitive manner, if you have both taxable and tax-advantaged accounts.

Suggested ETFs might include: Gold GLD, Silver SLV, Swiss Francs FXF, Tbills BIL, etc....

Best, Russell

As someone else said, there is a long thread on the Permanent Portfolio concept on the other board:

http://www.diehards.org/forum/viewtopic.php?t=15434&mrr=1208373111

The Permanent Portfolio Fund and the Permanent Portfolio Strategy have diverged over the years a bit. The fund is a more complicated allocation than the strategy advocated by Harry Browne in his later books. The Permanent Portfolio strategy is basically this:

25% - S&P 500 Index fund

25% - Long Term US Treasury Bonds (20+ years) 

25% - Treasury Money Market Fund

25% - Gold

You hold in this portfolio money you can't afford to lose. If you feel like speculating you do it with a Variable Portfolio (this is optional). The only rule is you can't use money from the Permanent Portfolio to re-fund your Variable portfolio if it lags the market or you lose it all. The portfolio is re-balanced whenever an asset is 15% or less or 35% or more (sell or buy to bring it back up to 25%).

The portfolio is designed to do well across the four basic economic conditions of prosperity, inflation, recession and depression. It has low volatility and respectable returns in the 9-10% range over the past few decades given the low level of risk.

I believe that Harry Browne's 16 Golden Rules of Financial Safety are worth reading and following. They contain a lot of very good wisdom:

http://harrybrowne.org/articles/InvestmentRules.htm

Russel,

     As you can see there are no 1% T-bills in the top 25 holdings in the portfolio. However, if there are any, it's of no consequence. With the number 1 ratings in 1,3, 5, and 10 year periods in there Global Conservative Allocation category and number 2 in since inception-1983, It's irrevelant. The 1.11% expense fee is worth it. Also, the cost of trading in and out with ETFs you mentioned further reduce the actual cost of the fund. 

Artie

PRPFX is a good model to use if you want to construct a balanced portfolio of truly non-correlated assets... but it works best as a model, not as an individual mutual fund holding... folks who hold 2% of it as a "buffer" are clearly paying far too much for the impact to their overall portfolio...

Ajw