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Pimco Commodity Real Return Strategy...Your thoughts?

beebee
edited March 2012 in Fund Discussions
I hold shares of PCRDX and noticed that its dividend yield according to yahoofinance is over 27%. Its share price has been hammered($6.67)...almost at its historic low of $5.67. Here's is PCRDX's price chart:

image

However, due to its strong distributions, a $10,000 invest over the past 10 years is worth over $22,000. Here is Morningstar's chart showing distributions reinvested:

image

Based on price it seems like a pretty good time to buy more shares...comments appreciated.

Comments

  • edited March 2012
    The user and all related content has been deleted.
  • edited March 2012
    Hi bee, Skeeter here …

    I held this fund up to a while back; but, in a different share class, PCRAX. From my thoughts it is a two sleeve fund and one that holds commodity futures and fixed income. It is … as you pointed out … a strong income generator when commodities are doing well … and, when commodities go soft as you are now seeing it has both a falling nav along with a softening in the income stream.

    I switched over to a commodity fund by Jefferies, JCRAX. It too is multi sleeve fund but added some additional sleeves. In addition to fixed income and commodity futures sleeves it holds a commodity equity producers sleeve and a physical metals sleeve.

    Remember, commodities can help capitalize on growth in emerging economies as well as mature economies with their need for and the rising demand of raw materials. When their economies go soft so do their need for these materials. From my thoughts, that is what we are now seeing … a softening for their demand.

    Form my perspective and in answer to your question … The best time to buy into or add to an asset class is when it has gone soft. It may take a while for the worm to turn so to speak … but, would you rather buy towards the top or towards the bottom. I like to add to established positions when they are soft. I currently have on my radar screen commodities as they have trailed the stock market rally so far this year and with this I plan to add to my position in the coming months. I do not wish to be too early in this move either and have dead money so to speak. I plan to follow T&A on JCRAX and start adding to it when I begin to see its price movement turn upward. Seems to be getting close ... Hoping for a stock market pull back and perhaps a good time to move some money into the commodity fund. I figure some time during the summer.

    Below is a year-to-date chart of JCRAX vs PCRAX. Notice the MacD is in decline and has yet to turn upward and complete ... and, like wise, the Slow Stoch is also a in decline ... has moved sidesways the past couple on months & recently turned south ... but has yet to turn upwards and complete.

    http://finance.yahoo.com/echarts?s=jcrax#chart4:symbol=jcrax;range=ytd;compare=pcrax;indicator=dividend+split+sma(21,65,260)+macd(27, 12, 9)+mfi(9)+stochasticslow;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

    I guess you are some what like me ... parked with some cash and looking for an investment move. Be patient. Things trend to go soft in the summer months. And, besides 1Q2012 earnings season will soon start. If earnings disapoint look for stocks to fall and perhaps bonds rally ... comodities?

    Hope this helps … and, I wish you “Good Investing.”

    Skeeter


  • Reply to @Maurice:
    Thanks Maurice...its sure feels more like 3%.
  • Reply to @Skeeter:
    Thanks Skeeter,

    I'll see how I might be able to incorporate JCRAX. Also thinking funds like these will fare well if interest rates begin to rise. I also have the same feeling for another holding USAGX which has dropped recently 14% and has separated from the physical market pretty substantially. Dead money is always a concern. Feeling this type of pain with my RIMM holdings. Who said learning needn't be painful?
  • Hey bee, Howdy,

    I did a quick and dirty look at PCRDX. 'Course the holdings indicated were from last year, so not too valid for today's date.
    From the 2011 numbers, it would appear at that time; that more than 65% of the holdings at the time were various maturities of Treasury TIPs.

    Wonder what is in the pot today?

    We reduced our commodity holdings a few weeks ago; although that surely does not indicate our house knows what we are doing......:):):)

    Take care,
    Catch
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