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I was just there, several days ago, and nothing was mentioned about this. I was expecting a 0.01 CG distribution, as previously posted. The file noted by msf, above, was created at 4:23PM today. Doesn't give one much time to readjust tax-loss selling plans when it hits so late like this. Maybe I'll just use this fund to "readjust" things out. Yeah, PIMCO, expect a call tomorrow.
Doesn't give one much time to readjust tax-loss selling plans when it hits so late like this. Maybe I'll just use this fund to "readjust" things out. Yeah, PIMCO, expect a call tomorrow.
Something that seemed curious to me is that while PIMCO's link to the file is named is roughly what I stated above (quarterly/annual/supplemental), the file itself says only quarterly dividends. It looks like PIMCO may have grafted onto its quarterly income distributions a CG distribution (due to a last minute sale?).
Further evidence: - The amount column is labeled Income Dividend Rate (as opposed to the Cap Cains Dividend Rate label that appears in its 12/15 distribution page) - The distribution amounts are the same for all share classes; that happens for cap gains, not for income dividends (expenses are subtracted from income first, so share classes with different expenses have different net income distributions)
Put these two details together and it suggests a last minute change with incomplete editing, because you've got CGs listed in a file clearly labeled only for income distributions.
Regardless of how the distribution is sliced and diced the drop in nav is due mainly to the distribution in the amount of $0.24752 as stated in an above post. This effects the funds nav pricing and a decline in nav valuation but it does not effect the funds total return performance numbers as distributions are part of the total return computation.
@msf Exactomundo! I saw this after my post (holiday-addled brain a little slow on the uptake). And whatever it is they have done, however they chose to do it, I'm also fairly certain why they did what they did.
Given the recent draw-down (and prospects slight for any imminent recovery), and with the sizable distribution they would have to give up, had they released this info when they announced preliminary estimates for yr-end distributions they effectively would have been whooping a blue light special for those looking for a good reset opportunity (esp. Class A shareholders). [provisions for resetting actually are stated in the prospectus; redeem shares and change your mind later and all one has to do is return all or part of it within circa 40d, with a letter explaining it is money from that redemption you wish to reinvest, and they give you the current NAV, load-waved]
Now, imagine what that would have precipitated. Beginning of December, a bunch of shareholders see the opportunity and go for it, redeeming a bunch, with intention of resetting in early January. Big portfolio churn, and at end of December? Insipid fund flow scorekeepers announce: BREAKING NEWS: Investors turn on 5-star PIMCO Income, yank $2B! Soooo, hushing this surprising "supplemental" distribution until its execution was doubly advantageous for them; for investors, advantage removed.
@PRESSmUP - not unique, but not a routine occurrence (unlike monthly income divs and annual cap gains distributions).
The monthly income dividend comes on the last day of the month. For December, it came on the 31st in 2014, 2013, 2012, and 2010. In 2011 it was Dec 30th (Friday). The annual cap gains dividend comes each year in the middle of December.
In some years (2014, 2012, 2011) there was an extra distribution a couple of days before the end of the year. In other years (2013, 2010) there was not. When there was an extra distribution, it was 1x to 2x the mid December regular cap gains distribution (which IMHO looks bad enough - they should not be that bad at calculating the cap gains, absent a late sale). This year it was 25x (25c vs. 1c).
Morningstar is reporting the 24.75c/share div as an income dividend, but that's just repeating what PIMCO's supplemental dividend page said. How could a monthly income dividend of 5c/month transform into 25c for the month of December (in addition to the 5c dividend I expect to show up tomorrow)?
Unless PIMCO has been holding back on paying out the full amount of income on a monthly basis (contradicting its prospectus), or unless it is lying about the nature of the dividend? Any other suggested explanation of where an extra 5x monthly income div comes from?
Per M*, "The fund sets a monthly dividend and attempts to stick with it for at least a year. Prudence demands that number be set lower than what the fund's holdings actually produce each month in order to avoid a shortfall, and there's usually undistributed income at each year-end, which is paid as an extra dividend to avoid running afoul of IRS tax rules."
This does describe what I'm seeing - that an extra "income" dividend is paid at the end of the year, and that it doesn't vary by share class (since all the expenses have been paid already out of the usual monthly dividends).
What puzzles me about that M* statement (which likely reflects reality, at least in part), is that I don't see anything in the prospectus about the fund being an ersatz managed payout fund and that I can't get the financials to match.
Specifically, the fund's net investment income per share comes out to less than the total monthly income dividends (per share) paid out, let alone the total income dividends (including the year end "bonus"). How does it do this without return of capital?
This is based on the prospectus' Financial Highlights. (That's a 38MB file; just in case you've got thoughts of actually checking up on me ) Wait for it to load so that it jumps to Financial Highlights, then scroll a few pages, past prospectus p. 87, to p. 89 where you'll find the data for PIMCO Income Fund.
It shows for the year ending 3/31/15 that the fund distributed 74c as income (for PONDX, i.e. Class D). This matches the sum of the monthly income dividends between April 2014 and March 2015 plus the bonus dividend on 12/29/14 of 10.6c, give or take rounding to the nearest penny.
But that same line in the prospectus says that the net income per share for the same period was only 49c. Where did that other 25c/share come from? The prospectus says there was no return of capital.
I honestly don't have a clue; I don't usually try to dissect financials this finely. There's more going on; can't really comment more on it without understanding it better. Homework for another day, perhaps.
Comments
http://finance.yahoo.com/echarts?s=PONDX+Interactive#{"allowChartStacking":true}
PONDX = $0.24752
https://www.pimco.com/handlers/displaydocument.ashx?wd=Portfolio Statistics&fn=2015 Income Distributions - PIMS and EqS.pdf&id=9ifOaVwN8bvedzD2LKnBguAjyVbXHWZK9frjJMyYM7E4CMsNBng65BaTcqCYH0dO/Fz/QT5D1e8m9p2ao4xbmDfrHO2Fs/1uF+fFk9XEUqG5aWS3hE+SJmflkYXQZndm6jzOk3o8jC4/eiSHihLzaVcuSYvoXrG+dGihIGCau4QxdFSNu6fUNILeU5z35Kef+obx/MulQKwUuOh2dla7bPuoi3xuRU31ntDGI2Fd4XPIE7LhQp+osTEK5O9mQLv+4n9yzAlKWZLgFKcdu1DR+I+EHZnJ+cmgDmqcxcNRLlOPLIDE1OwTZk8ENyfWnPHB
Further evidence:
- The amount column is labeled Income Dividend Rate (as opposed to the Cap Cains Dividend Rate label that appears in its 12/15 distribution page)
- The distribution amounts are the same for all share classes; that happens for cap gains, not for income dividends (expenses are subtracted from income first, so share classes with different expenses have different net income distributions)
Put these two details together and it suggests a last minute change with incomplete editing, because you've got CGs listed in a file clearly labeled only for income distributions.
Given the recent draw-down (and prospects slight for any imminent recovery), and with the sizable distribution they would have to give up, had they released this info when they announced preliminary estimates for yr-end distributions they effectively would have been whooping a blue light special for those looking for a good reset opportunity (esp. Class A shareholders). [provisions for resetting actually are stated in the prospectus; redeem shares and change your mind later and all one has to do is return all or part of it within circa 40d, with a letter explaining it is money from that redemption you wish to reinvest, and they give you the current NAV, load-waved]
Now, imagine what that would have precipitated. Beginning of December, a bunch of shareholders see the opportunity and go for it, redeeming a bunch, with intention of resetting in early January. Big portfolio churn, and at end of December? Insipid fund flow scorekeepers announce: BREAKING NEWS: Investors turn on 5-star PIMCO Income, yank $2B! Soooo, hushing this surprising "supplemental" distribution until its execution was doubly advantageous for them; for investors, advantage removed.
Is this year's occurrence of multiple distributions in December unique from prior years?
The monthly income dividend comes on the last day of the month. For December, it came on the 31st in 2014, 2013, 2012, and 2010. In 2011 it was Dec 30th (Friday). The annual cap gains dividend comes each year in the middle of December.
In some years (2014, 2012, 2011) there was an extra distribution a couple of days before the end of the year. In other years (2013, 2010) there was not. When there was an extra distribution, it was 1x to 2x the mid December regular cap gains distribution (which IMHO looks bad enough - they should not be that bad at calculating the cap gains, absent a late sale). This year it was 25x (25c vs. 1c).
See historical div distributions at Yahoo Finance.
Morningstar is reporting the 24.75c/share div as an income dividend, but that's just repeating what PIMCO's supplemental dividend page said. How could a monthly income dividend of 5c/month transform into 25c for the month of December (in addition to the 5c dividend I expect to show up tomorrow)?
Unless PIMCO has been holding back on paying out the full amount of income on a monthly basis (contradicting its prospectus), or unless it is lying about the nature of the dividend? Any other suggested explanation of where an extra 5x monthly income div comes from?
Per M*, "The fund sets a monthly dividend and attempts to stick with it for at least a year. Prudence demands that number be set lower than what the fund's holdings actually produce each month in order to avoid a shortfall, and there's usually undistributed income at each year-end, which is paid as an extra dividend to avoid running afoul of IRS tax rules."
This may describe what you are seeing.
press
What puzzles me about that M* statement (which likely reflects reality, at least in part), is that I don't see anything in the prospectus about the fund being an ersatz managed payout fund and that I can't get the financials to match.
Specifically, the fund's net investment income per share comes out to less than the total monthly income dividends (per share) paid out, let alone the total income dividends (including the year end "bonus"). How does it do this without return of capital?
This is based on the prospectus' Financial Highlights. (That's a 38MB file; just in case you've got thoughts of actually checking up on me
It shows for the year ending 3/31/15 that the fund distributed 74c as income (for PONDX, i.e. Class D). This matches the sum of the monthly income dividends between April 2014 and March 2015 plus the bonus dividend on 12/29/14 of 10.6c, give or take rounding to the nearest penny.
But that same line in the prospectus says that the net income per share for the same period was only 49c. Where did that other 25c/share come from? The prospectus says there was no return of capital.
I honestly don't have a clue; I don't usually try to dissect financials this finely. There's more going on; can't really comment more on it without understanding it better. Homework for another day, perhaps.