WhassUp (This Year)?

BenWP

Not much as most everyone knows. I reviewed my TIAA account and was surprised to find that the only fund available to me (including the MMF) that is up YTD is Real Estate. Not only is it up about 1.64% YTD, but it clocked +17.8% for the past year. Two years ago my advisor had me dump my modest holding on the assumption that urban RE would suffer permanent damage from the pandemic.

A quick look at mainstream RE ETFs revealed -8 to -10% losses YTD. QREARX is an interval fund and I believe many of its holdings are commercial properties that TIAA itself owns in part or in whole. Anyone here with RE funds that are up?

carew388

Every real estate and global real estate fund listed in Fidelity's screener has lost money so far ytd.

yogibearbull

QREARX - TIAA Real Estate Account VA is not really an interval-fund. It does have once/quarter withdrawal restriction but ANY amount, including 100%, can be withdrawn. QREARX pays a Liquidity-fee to TIAA and in case of heavy redemptions, TIAA is obliged to support QREARX (and it did to the tune of $1.2 billion in 2009-10). Unlike listed real-estate equity funds (VNQ, XLRE, etc), QREARX is mostly directly-owned properties and has low leverage/mortgage.

Interval-funds typically have restriction that only up to 5% may be withdrawn in quarterly window.

https://www.tiaa.org/public/investment-performance/investment/profile?ticker=41091375
https://markets.ft.com/data/funds/tearsheet/summary?s=QREARX

BenWP

Thanks, @yogibearbull, for that info.

hank

I know you said “this year.” But I’m blinded by a sea of red from Thursday. Only TMSRX (+.30%) and RIO (+.80%) were green. Just glancing at Dodge and Cox, looks like most of their equity funds are flat or slightly up for the year. Could change with Thursday’s results factored in. DODBX, DODWX, DODFX, DODGX, DODEX. However, their income funds are bleeding big time this year. RIO’s had a strong run. I’d guess that’s true of most everything in the commodities areas - but excluding the precious metals which continue to be weak.

Mark

I use RQI a CEF for a real estate fund. After rising about 50% last year it is down 10.5% thus far this year.

yogibearbull

QREARX surprised its skeptics. Its best description is private-equity real estate. Its NAV declined less than 2% in 2020 and then started its strong move up. The feared collapse in top tier real-estate never happened. Some rents/leases were delayed under government mortgage forbearance program but values held. QREARX has a mix including offices (weak), malls (weak), apartments (v strong), industrial properties (strong) and the overall portfolio held well. It also made some minor adjustments in its portfolio. There were many discussions on M* TIAA forum, several posters got out in early'-2020, but then several got back in late-2020. Its annual 2021 10-K is due in 2-3 weeks and, for those interested, I track them at LINK.

MikeM

Up this year is commodities, not surprisingly. I'm not smart enough to pick a specific commodity, so my bet has been DBC, a broad basket commodity ETF, up almost 10% YTD.

Derf

The only question of have ; Is there more fruit to be picked from this tree ?

MikeM

The only question of have ; Is there more fruit to be picked from this tree ?

@Derf, absolutely yes, maybe, no I don't think so.

Commodities have always been known as an inflation hedge. Do you expect inflation? Commodities (especially the energy sector, oil, gas, ect...) have been beaten down for a decade and now they are starting to move. I think that sector is a good play through 2022 but that's just my know-not-much opinion. It's a hedge for me that I got into mid last year and will likely hold through 2022.

This index ETF is easy to work with. There are plenty of managed funds to go with also if that's someone's cup of tea.

BenWP

@MikeM: I assume you will receive a K-1 form from DB for the 2021 tax year. I do my own taxes, so I’m curious.

I subscribe to a stock picking newsletter that has been advocating for DBA and DBC over the last few years. It has turned out be be good advice, but only since the beginning of 2021. You appear to have gotten in at the right moment.

hank

Gold shot the lights out today. OPGSX +3.99% WPM + 4.98% GLDB + 2.03%

Nothing like having the Prez mention WW III to kick the miners in gear.

bee

Breath of fresh air…

“Your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.” – Peter Lynch

https://crossingwallstreet.com/archives/2022/02/cws-market-review-february-11-2022.html

carew388

PBDC is an Invesco Commodity etf that doesn't issue a K-1. Is this a better option to avoid filing the complicated K-1 form?

MikeM

@BenWP, I hold this in a tax deferred account, in an IRA. To be honest, because of this I never even thought about a K-1. It is my understanding I don't include a K-1 when filing. At least that is what I see when Googling:

Activity within an IRA account is reported to IRS by the fund Custodian, not IRA Owner.

carew388's suggestion would certainly be a good one otherwise, PDBC is the corrected moniker. Charting versus DBC is very close.

Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF PDBC

yogibearbull

For most people, K-1 in IRAs don't matter. But for some, it may - if there is large UBI in K-1 Box 20 (over $1,000); and then the IRA sponsor will prepare Form 990 and will bill you a few hundred bucks for its preparation and filing.
https://finance.zacks.com/report-k1-ira-account-7692.html
https://www.fool.com/knowledge-center/tax-effects-of-k-1s-issued-by-etfs-in-iras.aspx#:~:text=K-1s are tax forms,deductible expenses to their investors.
https://ttlc.intuit.com/community/retirement/discussion/does-schedule-k-1-income-held-in-an-ira-need-to-be-shown-in-tax-filing/00/150684

BenWP

Thanks all for adding to my understanding. I knew K-1’s were an annoyance, but they could be much more than that for certain high rollers. I recall owning Blackstone (BX) for a short time and having to deal with the K-1. Talk about an opaque form…

Mark

Yes K-1's are more work but I have been using Turbo Tax for years and it handles K-1's like waffles handle maple syrup. Zero problems or issues.

BenWP

You're right, @Mark, TurboTax does work well. I started many moons ago using one of its ancestors, MacInTax.

BenWP

@carrew388: thanks for the lead on PDBC. Do you or @MarkM or @yogibearbull have an explanation for what the fund did in 2021 to generate such a massive distribution? I assume the managers trade a lot, but I wonder if trading commodities contributes to the big tax bill for holders.

yogibearbull

@BenWP, short-term nature of futures leads to high realized gains (and distributions) in strong years. There may be some loss-carryovers to offset those. But the ETF structure alone isn't any help in this case.