IF you look a the long-term chart, a question comes to mind: can anyone tell me what was in the portfolio 1996-2000, while the DOW was going up 100% (tech bubble times) and the fund was absolutely flat-line 0%?
I like this fund for bad or inflationary times; but in a market bull run, won't it dramatically underperform? Hence, is it not primarily a defensive instrument, a kind of portfolio insurance?
Not sure that's exactly correct. "Cuggino has been directly involved in the Fund's operation for over twenty years" (p. 31 of the current prospectus). Now I wish I had easy access to the prospectus for the year 2001 or 2002.... I think that its strategy has been pretty similar from the beginning, as it was based on Harry Browne's concept. Anyone been with it for a long time? I bought my first shares about four years ago.
I believe that back in the late 1990s it was holding the same relative percentages of assets -- but I don't know that for sure, as I wasn't aware of it back then.
Its primary goal, I think, is to preserve purchasing power through all sorts of economic conditions. So I would tend to agree that's defensive. But I don't know if it fits in the category of "portfolio insurance". It's really just a widely diversified balanced fund that obviously includes more asset classes than just stocks, bonds, and cash. So do university endowments and pension funds, etc., these days. It also has rebalancing built in, due to its charter to hold fixed percentages of the various asset classes.