A "Prime" Choice

02/03/2006 12:00 am EST


Daniel Wiener

Editor, The Independent Adviser for Vanguard Investors

Daniel Wiener , the expert on Vanguard funds–as well as fund investing in general–consistently outpaces the markets, using a conservative, long-term approach. His favorite for 2006, Vanguard PRIMECAP Core, was also his pick for 2005, up a solid 12.1%.

"Vanguard's PRIMECAP Core Fund (VPCCX), my 2005 selection, is also my pick for 2006. The newest stock fund offering from the folks that brought us the top-performing Capital Opportunity and PRIMECAP funds, both of which are now closed to new investors, is a chip off the old GARP, or growth-at-a-reasonable-price block. Given its solid performance in 2005 on our top pick for the year, I don't see any reason why we should be selling out of it, particularly since its portfolio of technology and health care stocks have only just begun to come out of their slumber.

"PRIMECAP Core is an ‘all-cap’ fund run by a team of five managers, each selecting his own basket of stocks independent of the other four, yielding a portfolio of about 100 stocks, of which the ten largest holdings account for about one quarter of the fund’s assets. At the end of December 2005, the 13-month old PRIMECAP Core had already grown to more than $1.2 billion. As I said last year, once investors find this fund they may flood it with cash, so invest here before Vanguard closes the door on this fund too."

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