PRLPX - PIMCO Real Return P

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PIMCO Real Return P (PRLPX)
Expense Ratio: 0.55%
Expected Lifetime Fees: $17,164.20

The PIMCO Real Return P fund (PRLPX) is a Inflation-Protected Bond fund started on 04/30/2008 and has $23.80 billion in assets under management. The current manager has been running PIMCO Real Return P since 01/22/2008. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

iShares Barclays TIPS Bond (TIP)
Expense Ratio: 0.20%
Expected Lifetime Fees: $6,475.12

The iShares Barclays TIPS Bond (TIP) is an Exchange Traded Fund. It is a "basket" of securities that index the Inflation-Protected Bond investment strategy and is an alternative to a Inflation-Protected Bond mutual fund. Fees are very low compared to a comparable mutual fund like PIMCO Real Return P because computers automatically manage the stocks.

The Following Inflation-Protected Bond Funds Have Lower Fees Than PIMCO Real Return P (PRLPX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
AllianceBern Bond Inflation Strategy Adv ABNYX 38.0% 212 0.45%
American Beacon Treas Infl Prot Sec I ATPIX 381.0% 327 0.26%
American Century Infl-Adj Bond Instl AIANX 26.0% 5,300 0.28%
American Century Infl-Adj Bond Inv ACITX 26.0% 5,300 0.48%
American Century Inflation Prot Bd Instl APISX 85.0% 649 0.30%
American Century Inflation Prot Bd Inv APOIX 85.0% 649 0.50%
BlackRock Inflation Protected Bond Instl BPRIX 131.0% 4,900 0.45%
BlackRock Inflation Prted Bd BlackRock BPLBX 131.0% 4,900 0.33%
DFA Inflation-Protected Securities I DIPSX 18.0% 2,200 0.13%
Dreyfus Inflation-Adjusted Sec Instl DIASX 138.5% 357 0.40%
Fidelity Advisor Infl-Prot Bond I FIPIX 24.0% 3,800 0.54%
Fidelity Inflation-Protected Bond FINPX 24.0% 3,800 0.45%
Goldman Sachs Infl Protected Secs Instl GSIPX 194.0% 310 0.28%
Hartford Inflation Plus Y HIPYX 232.0% 2,400 0.51%
JPMorgan Real Return Instl RRNNX 86.0% 170 0.50%
PIMCO Real Return Instl PRRIX 129.0% 23,800 0.45%
Schwab Treasury Inflation Protected Secs SWRSX 37.0% 362 0.29%
T. Rowe Price Inflation Protected Bd PRIPX 18.0% 549 0.53%
TIAA-CREF Inflation Link Bd Instl TIILX 13.0% 1,700 0.29%
TIAA-CREF Inflation Link Bd Retail TCILX 13.0% 1,700 0.47%
Vanguard Inflation-Protected Secs Adm VAIPX 28.0% 42,800 0.11%
Vanguard Inflation-Protected Secs Instl VIPIX 28.0% 42,800 0.07%
Vanguard Inflation-Protected Secs Inv VIPSX 28.0% 42,800 0.20%
Western Asset Inflation Idxd Plus Bd I WAIIX 50.0% 587 0.33%

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Why Are These Metrics Important?

Turnover represents how much of a mutual fund's holdings are changed over the course of a year through buying and selling. Active mutual funds have an average turnover rate of about 85%, meaning that funds are turning over nearly all of their holdings every year. A high turnover means you could make lower returns because: 1) buying and selling stocks costs money through commissions and spreads and 2) the fund will distribute yearly capital gains which increases your taxes. Look for funds with turnover rates below 50%. For comparison, ETF turnover rates average around 10% or lower.

Generally, smaller funds do better than larger ones. The more assets in a mutual fund, the lower the chance that it will beat its index. Managers outperform an index by choosing stocks that are undervalued. In order to find these undervalued stocks, the manager has to know more than his competitors to develop an "edge." There are only a finite number of stocks a mutual fund manager can reasonably analyze and actively track to gain such a competitive edge. When the fund has more assets, the manager must analyze large companies because he needs to take larger positions. Large companies are more efficiently priced in the market and it becomes increasingly difficult to get an edge.