With a fairly constant allocation to gold, silver, swiss franc, REIT and treasury, this fund seems as an interesting diversifier and with very low volatility. Some investors are skeptical of static allocation and high fee, Why to pay +1% as fees for a fund, which will never change course in allocation. 

For me this can be place to park my money, until I can find some better alternative investments. If high inflation hits, it is expected to do well with gold, commodities and REIT. Investors who are underweight in gold and currency, can take a look at it for a simple diversification. Forex trading can be tricky and is not recommended for a home grown investors like us, may be this is a right vehicle for some currency hedge against declining dollar.

From their website: 

Permanent Portfolio 

Designed to provide growth at low risk, the primary goal of Permanent Portfolio is to preserve and increase the real long-term purchasing power of each shareholder’s investment, regardless of economic climate. 

To accomplish this goal, the fund employs a time tested investment strategy of categorical diversification. Permanent Portfolio’s investment categories have been chosen and weighted with the goal of providing downside protection in all foreseeable economic conditions. For over 24 years, this strategy has not wavered despite significant market fluctuations. 

The six investment categories and main investments for Permanent Portfolio include:

GOLD: Bullion and coins held in major banks and with accredited commodity exchange depositories. Gold is expected to profit from inflation, especially runaway inflation. 

SILVER: Bullion and coins held in the same form as gold. Silver is expected to profit from inflation or a soft landing, and possibly gain during runaway inflation.

SWISS FRANC ASSETS: Current and call accounts at Swiss and non-Swiss banks, and Swiss government bonds. The Swiss franc is expected to profit from inflation, especially runaway inflation.

STOCKS OF U.S. AND FOREIGN REAL ESTATE AND NATURAL RESOURCE COMPANIES: Stocks of companies whose assets should allow them to appreciate or depreciate in much the same manner as real estate and natural resources. These stocks are much more liquid than real estate and natural resources. They are expected to profit from continued inflation.

AGGRESSIVE GROWTH STOCKS: Common stocks and stock warrants that tend to move further, in either direction, than the general stock market. Such stocks are intended to allow Permanent Portfolio to have a stake in any extended bull stock market but to do so with a limited risk to the overall Portfolio. Because all the Portfolio’s stocks are purchased for cash, without the use of margin, they can never lose more than is invested in them no matter what the future brings. And they are in a position to potentially profit dramatically if prosperity continues. They may hold much of their purchasing power during runaway inflation.

U.S. TREASURY BILLS, BONDS & OTHER DOLLAR ASSETS: Short-term securities (one year or less to maturity) issued or guaranteed by the U.S. government or its agencies. These investments provide liquidity and stability, and their yields tend to match the rate of inflation closely. Long-term bonds (as long as 30 years to maturity) that may profit greatly if a deflation or soft landing caused interest rates to drop from today’s levels to the level of 2% to 3% that normally has prevailed during non-inflationary periods. Because a deflation would cause widespread defaults on lower-grade bonds, only long-term bonds issued or guaranteed by the U.S. government or its agencies are held by the Portfolio. 

Fund Manager - Clyde S. McGregor / Ed Studzinski

Fund Manager Tenure: 13.5 years [Other Funds: OAKGX]

Annual Operating expense: .81

This is our largest holdings and one such fund you can use to build your portfolio around it. The Oakmark Equity and Income Fund seeks income and preservation and growth of capital. It's designed for investors who want to tap into the potential of stocks, yet want the cushion bonds may provide. The Fund is primarily made up of U.S. equity and fixed-income securities. Truly, Kiplinger calls it one stop investing solution.

Oakmark, which is co-managed by Clyde McGregor and Ed Studzinski, was launched in November 1995. From then through March 6, it returned an annualized 10%, an average of seven percentage points per year better than Morningstar's benchmark of balanced funds and seven points more than Standard & Poor's 500-stock index. Over the past ten miserable years, the fund gained 8% a year, while a basket of balanced funds returned a shade above 0% on average.

And Oakmark Equity & Income has been remarkably consistent. In its 13 full years of operation, it has landed in the top 20% of balanced funds nine times and has never been in the bottom 40% of its peer group. In 2008, the fund lost 16%, compared with the S&P 500's decline of 37%

Top 10 Equity holdings as of March 31st, 2009 from Oakmark.com

Security Percent of Net Assets

XTO Energy, Inc. 3.64 %

EnCana Corp 2.73 %

Nestle SA 2.66 %

General Dynamics Corporation 2.59 %

ConAgra Foods, Inc. 2.45 %

Avon Products, Inc. 2.40 %

CVS Caremark Corporation 2.28 %

Diageo plc 2.21 %

Apache Corporation 2.13 %

Hospira, Inc. 2.05 %

As an investor in OAKBX, I love receiving quaterly newsletter and fund commentary from the managers. It offers some great insight into investing with broader macros economics. Perhaps the best fund for growth and capital preservation and with managers you can trust on.

Interesting comments from manager in one such commentary

"If we cannot explain a potential investment to our clients in a few simple declarative sentences, the investment is probably a bad idea. We also have an aversion to anything that smart salespeople are trying hard to sell to us. Mortgage-backed securities presented us with both complexity and the hard sell, and given our temperament, this made them easy for us to avoid."