One of the CEFs is new to me so I thought I would check it out. The fund in question is the DWS Global Commodity Fund (GCS). It is fairly new, it listed about two years ago. According to ETFconnect the fund will own stocks in commodity-related issuers.
To that objective the current top four are Exxon (XOM) 7.2%, BHP Billiton (BHP) 4.8%, Rio Tinto (RTP) 3.8% and the Gold ETF (GLD) 3.3%. The top four comprise 19.1% of the fund. This is all from ETFconnect so the fund could look different now.
The idea of the fund sounds like it is right up my alley, it owns several of the themes I have been writing about for the last (almost) two years.Something gets lost in the execution. The chart compares GCS to iShares Australia (EWA), GLD, iShares Materials (IYM) and iShares Global Energy (IXC). I think the comparisons make sense and it lags them all, badly.
I do not know what the fund has owned in the past or the timing of any changes made within the fund.
GCS has traded at a persistent mid-teens discount to NAV so I don't think we can attribute the lag to the discount. If the discount were added back in it would move above IYM but that is it.
Long time readers will recall that I am not a fan of all-anything portfolios. Two years is enough track record to think that GCS is not the best way to capture energy/commodity/Australian exposure. I doubt this fund is even the third best way to invest in these parts of the market.
For disclosure; GLD, EWA and IXC are client or personal holdings.
Note the chart includes an area for PE ratios, hat tip to reader Jay Cornelius. It is available through the Indicators button under the third indicator.
11 comments:
According to ETF Connect:
1 year return:
GCS up 30.14%
IXC up 23.75
EWA up 21.5
IYM up 22.86
GLD up 40.95
So, only one of your comparison investments outperformed your brothers GSC. So, if you had money split equally between your four vs his one ( GCS ).....he's got you beat by 325 bps.
g
thanks George, obviously I did not look shorter term.
np
I am beginning to think all of our long term return history may be misleading. The past is the past.
Where should we be invested for the NEXT 5 yrs?
An investment that has a better "more recent" return is apt to at least be closer to the sweet spot.
jmho
g
GCS also looks to have a pretty good yield. Any thoughts on how this factors into the investment value?
ETFconnect has the yield at 1.03%
Roger, do you have suggestions on other commodity plays?
more important, i think you're right, you may be the only brother combo in BlogWorld! I can't even challenge you, i only have sisters.
Morning Roger... off-topic, but were you planning to comment on the latest filings from powershares? As usual, I suspect some will turn out useful and some rather less so. The listed private equity portfolio looks potentially interesting, though a plain vanilla market-cap weighted one might have been equally useful. There are a few funds (open and closed ended) investing in listed private equity companies on this side of the pond, but this would be the first ETF I have come across in the sector. Let's see the detail of what the proporietary index will include (listed VC/buyout entities, or just BDCs?), but this could turn out to be a handy tool to give exposure to (a proxy for) an inaccessible asset class.
Do you take into consideration the $1.65 of capital gains distributed on 1/12/06?
Remember too that although the cap gains distribution isn't really yield it is a distribution at NAV(sort of).
They aslo did a cutesy tender offer that let me sell a few shares back at nav.
The GCS chart is not adjusted for the 2 distributions totalling 1.81, ex date 12/28/05
your comparison is incorrect, because your research is inadequate.
Post a Comment