PIMCO Commodity Real Return Fund
Despite its standing as
the world’s top commodity fund based on assets, it still seems most investors
are unaware that Pimco offers an excellent commodities mutual fund, the
Commodity Real Return Fund. Many investors still seek out the Rogers fund
based on Jim Rogers’ name recognition, but Pimco’s entry is also an index-based
commodity fund, and it’s one we hold in very high regard.
To view details on the only three true commodity funds available today (most
“commodity-related” funds invest in stocks of energy-based companies, not the
physical commodities themselves), a comparison can be found in
Commodity Funds Comparison.
Alternatively, readers can request more information on any of these funds from
investment advisors, highly-experienced industry professionals we have found
that know these investments very well.
About Pimco’s Commodity Real Return Fund:
The Fund uses commodity-index-linked derivative instruments, such as commodity
swap agreements, to gain 100% exposure to the investment return of the Dow Jones
AIG Commodity Total Return Index (DJAIGCTRI)— a well-balanced and widely
followed measure of commodity prices. The Fund fully collateralizes the
commodity-index-linked derivative instruments by investing its assets in an
actively-managed portfolio of inflation-indexed bonds and other fixed-income
securities. Inflation-indexed bonds offer a return that is linked to changes in
the rate of inflation. As a result, the Fund attempts to employ a "Double RealTM"
strategy, seeking to capitalize on the inflation-hedging properties of both
commodities and inflation-indexed bonds. Thus far, the result has been a fund
whose performance has exceeded its own benchmark index.
Like the Rogers Raw
Materials Fund, Pimco’s commodity fund is based on an index, so the investor
has little exposure to management-related investment mistakes; the performance
of these funds will simply mimic the performance of commodities in general.
Unlike the Rogers
Fund, which is a stand-alone product, investors in this vehicle gain some
significant advantages in terms of pricing, liquidity and ease of investment.
Again, a detailed comparison can be found in the
commodity fund comparison
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