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PETDX, I'd sure like to watch the day to day.....

edited July 2011 in Fund Discussions
Morn'in Coffee from MI to Ya'll,

PETDX. I would like to sit for a day and have the managers of this fund explain the tools available to them to use for operating this fund. Then, I would hang around for the remaining 4 days of a normal week and watch the moves and understand the "whys". There are other classes of this fund, but this class is in the afforable reach of the individual investor.

I have watched/thought about this fund for awhile and I still scratch my head about the name, the returns, their methods and try to understand the most current data about holdings and the big picture.

Perhaps this house will throw some sticky money against this fund's wall and find how much sticks in place. Not unlike our CAMAX holding, I classify this as a hot dog holding that could actually fall off the roasting stick, into the fire, burn to a crisp and no longer fit for eating.....:):):)

Just a little 2 cups of coffee chatter from this house, this morning.

Take care,
Catch

Comments

  • PETDX is a REIT fund. You can compare it to say CSRSX. However, like many other PIMCO funds, they are using derivatives (futures, options, swaps) to get exposure to the sector. Thus, when you look at the portfolio you see a lot of fixed income instead in the top 20 (per M*).
  • Wow! What a money maker! 18.56% Yield. Share price is $5.02...You'd think you could make some distro money offa this fund but wait....hold on. I went to Yahoo Finance and ran a chart on this fund. Selected Basic Tech Analysis, Range (max), Moving Avg (200). What the....? Huh? Punched in CSRSX and same variables. OK. Makes sense. Fund line below 200 MA in 2008 and 2009 during the recession. Then fund line above 200 MA since. OK. Back to PETDX.... Wow is right. Fund line below 200 MA line most of the funds history and....looks like the fund started at maybe $10/share back in 04 but now at $5.02? I'm wondering...if a person had invested $10,000 in this fund at it's intial opening of $10/share back in '04...where would I be now? Down 50%? What I'm thinking is....this is a fund for a trader and not a B&Her like me with an account at Fidelity where I have to hold the fund for 6 months before I sell to avoid a transaction fee.
  • Reply to @Dante:

    Not sure about the data you are looking at in Yahoo, but if you go to M* / Performance, and compare PETDX and CSRSX, growth of $10,000 isn't much different between the two funds since 2004. Actually, PETDX grew to $26000, 2004 - YTD 2011. Slightly better than CSRSX.

    Something strange about the share price for PETDX. If you look back around the end of Dec, 2004, it looks like the price was adjusted. It took abpit a 30% drop in a day. Anyway, your 10k growth analysis doesn't appear accurate.
  • Reply to @Dante:

    I don't think you should only look at the NAV chart. You need to look at the total returns as these funds have a very large dividend yield (REITs have to distribute the majority of their income for maintaining tax favored status). If you look at the total return, you will get a different picture.
  • Guys, this fund is much less complex than you're making it out to be. This is another iteration of PIMCO's portable alpha approach to managing money where they gain 100% of an index exposure using derivatives collateralized by a bond portfolio. This strategy is 100% long the DJ Wilshire REIT index using futures and swaps collateralized by a high quality bond portfolio. PIMCO actively manages the bond portfolio and tries to generate excess return. This creates returns of 100% REIT index +/- PIMCO's bond portfolio return minus fees. TIPS are commonly used as the trading vehicle for the bond portfolio making this a "real real" return type vehicle, ideally with inflation protection from the real estate exposure and inflation protection from the TIPS exposure. As to whether swaps or futures (or forwards) are used, it's a matter of what's cheapest in the market at the time.

    For those using Yahoo Finance to chart funds using 200 day MA's, this is not a good practice and it's not an accurate measure of fund performance, particularly for funds that pay large distributions. MikeM's post regarding using M* is accurate. M* is a better tool for charting fund returns. As to the major dip in price in 2004, this was not a price change, but a true decline in value. The REIT market fell by 20% from April through May 2004. It recovered strongly from there. PIMCO Real Real Estate fell by about 24% during the same time.

    I can't fully explain the 18% TTM distribution other than to say that it isn't really a sustainable number and one should not expect an 18% total return from the fund by any means. PIMCO's other funds run in this manner also have double-digit payouts over the last year. If you do continue to receive that payout, you will no doubt also be getting NAV erosion.
  • I'm mainly concerned about my $10,000. If I had invested that $10,000 back in 2004 when I believe the fund started and the NAV was $10 I should have gotten 1,000 shares.....but today...at $5.04 a share? Something ain't right here. Take a look at the chart of PETDX at Yahoo. I'll make it easy on you and give you some hand holding. Yahoo Finance/Search Block-PETDX/Charts-Basic Tech Analsis/Range-max/Moving Avg-200. The fund line is on a downward path. So if M* is telling us in their Performance section that PETDX made more money than CSRSX over 10 years...I just don't understand how the NAV can be cut in half and I would surmise that the Dividend distribution made up the difference over time. It just doesn't seem logical to me.
  • edited July 2011
    From Morningstar RE: PETDX
    Growth of $10,000 = 26,504.38

    Giant divs have eroded the NAV. See a number of other, similar Pimco funds that offer similarly giant dividends (PIXDX w/a 21.66% *listed* yield) for similar results.
  • I've considered PIXDX until I looked at things a little closer. That fund started at $10/share in mid '04 and now it's NAV has about halved but according to the charts at M* the fund has gone from an intial $10,000 investment to $16,000. Hmmm.....
  • edited July 2011
    Some very good conversation on this. Investor pointed to a critical portion in regards to REIT's and distributions. Everyone has provided excellent thinking points about this fund and similar funds that function with similar investment tools, regardless of the fund type. Also, M*'s reporting of total return and also looking at their charting should keep one in place as to a particular funds performance over a time period and/or using the $10K starting points. Aside from internal acct numbers info we use with Fidelity, I prefer to use M* for solid numbers info.
    Lastly, the SEC 30 day yield is just shy of 8% for this fund.
    Regards,
    Catch
  • Hi catch22, I'd like to ask you some questions if you don't mind. How long have you owned PETDX? How has the funds performance done over that time frame, namely, if you started with $10,000 or $5,000 or whatever....have you made some gains? Any NAV erosion? Has the fund been a positive performer? Would you recommend it?
  • Reply to @Dante:

    Hi Dante,
    No, our house hasn't and currently does not own this one. I noted in the original post that we having been looking at this fund. Based on the M* performance, and as noted; 2004 was a general REIT area problem and one also finds 2007 being a fairly big negative, and of course the 2008 melt.
    We would only consider to use this fund as an add-to other unrelated sector/type holdings. We currently have a conservative REIT fund, FRIFX; and PETDX could be a tag along for this sector portion, with a bit more "fire".

    We currently are awaiting the outcome of the follies in DC to find broad market reactions to the decisions being made and/or finalized.

    We are sitting with about 13% cash that needs a good home for some growth, but will wait a few more weeks to attempt to find the path.

    Thank you for your questions and thoughts regarding this fund. This is what helps all of us learn, think and stay sharp.

    Regards,
    Catch
  • Yes! and I'm still wondering about this fund along with PIXDX. I'll keep digging. Somebody owns this fund and I'll find out from that investor.
  • Oh! forgot to add...I have some money waiting to invest but not till after this debt ceiling charade. Now....I'm shaking my head over that one!
  • Reply to @Dante:

    A quick note about posting. You will find with your own post, as long as you are signed into MFO, an edit button next to the reply button. For your second post here you could have used the edit button to add to your first post. When you are finished with "edit" you with find a "save comment" at the bottom of your editied post. This will help keep the discussion thread cleaner, as some discussions can be long.
    Also, you should post about PIXDX and ask whether anyone holds this fund.
    Take care,
    Catch
  • Reply to @Dante: Again....this is seen with many of Pimco's derivative-driven funds - giant distributions that have eroded the NAV over time.
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