If you look at 3 month rolling returns for TRBCX vs a fund like VFIAX, it seems that when the market is doing well, TRBCX outperforms VFIAX enough to make up the higher load.
TRBCX overweights consumer discretionary. That sector normally shifts with the economy more than other sectors. It does really well when the economy is going well, but it tends to take a bigger hit in recessions.
However, it seems to me that multiple years of beating the S&P is nothing to be sneezed at.
Achoo!There are thousands of active funds. What are the odds that a coin will come up heads 10 times in a row? Pretty slim, but if you flip it thousands of times I'm sure it will flip heads 10 times in a row at some point. Look hard enough and you will find other active funds that have outperformed the market for a few years in a row here and there. There are active funds that beat their benchmarks, even over time. It happens. No one disputes that. However, it happens rarely enough that it's hard to tell, is it skill or luck?
TRBCX has done well lately, but if you look at a chart of it's whole history it performed pretty similar to the S&P 500 right up until 2009. Even after 2009 it has been hit or miss. There were a few years where it really shined, and several years where it did about the same or worse than the S&P 500.
When it outperforms for multiple decades, then tell me about it. Speaking of such funds...
VPMAX: It has outperformed the S&P 500 and TRBCX over the long term. Over 16 years it has averaged 3% returns above the S&P 500. The higher cost original version, VPMCX, has outperformed the S&P 500 by about 2.5% per year going back to 1984.
This is one of those few cases I think it might actually be skill, but VPMAX breaks all the rules that hinder other active funds. It has very low turnover, lower than it's comparable index fund, VIGAX. The managers make decisions with the long term in mind, and don't bother themselves with the traditional short term quarterly mindset. It has very low costs for an active fund, less than half of the cost of TRBCX. It's also closed... When active funds do really well they attract more money. Most managers are greedy so they keep taking new funds, and eventually they run out of great ideas for investing the new funds so they start investing in stocks they would have passed over before(or.. their luck runs out). That normally leads to lower future performance. Primecap closed to new investors to prevent this from happening.
Finding a fund like Primecap before it closes is just about impossible... which brings us back to index funds. There is also no guarantee Primecap will continue to outperform. 30+ years would be a whole lot of luck, but statistically it is possible.