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They follow different commodities indexes (I believe Plus follows the Credit Suisse Commodity Index, while RR follows the Dow Jones-UBS commodities index) and the collateral/fixed income management is different (RR has a large portion of its fixed income collateral in TIPS, among other differences.)
Commodity RR: "A Double Real™ inflation-hedging strategy Instead of investing in physical commodities, the Fund purchases derivatives linked to a broad index, helping it diversify without committing substantial capital. The Fund then “collateralizes” these derivatives with an actively managed TIPS portfolio. This dual approach seeks to capitalize on real (after-inflation) returns from commodities and real returns from TIPS. TIPS may decline in value if interest rates rise, and may be particularly sensitive if real interest rates rise rapidly."
CommoditiesPlus: "The Fund combines a non-leveraged position in the Credit Suisse Commodity Benchmark with a portfolio of high-quality, short-term bonds. The commodities futures capture the price return of the commodities index, while PIMCO’s active management of the bond portfolio seeks to add incremental return above the index. The Fund maintains a high overall portfolio quality, and enhances diversification by investing in a variety of high-quality securities, such as mortgages and hedged non-dollar bonds, as well as relatively risk-free assets such as T-bills and money market instruments. The Fund may also invest in securities with ratings below AAA to capture additional yield. "
I own RR, and have never felt the need to add or switch to Plus.
The only issue with RR is that it does tend to throw off very large distributions at times.
It looks like Plus also has the same penchant for large distributions. I think this is inherent with all of the Pimco index funds that are based on derivatives. This is a big problem with holding these funds in taxable accounts -- something I am still trying to deal with.
I took a quick look at the two indexes and DJUBS (RR) has much more agriculture exposure while CSCI (Plus) has more energy. CSCI seems to be a newer index (and Plus a newer fund) so maybe it has some new whiz-bang methodology to it. Plus was clearly the better fund in 2011.
I think RR is expected to perform better if inflation starts to ramp up because of its TIPS strategy. Since my commodities allocation is supposed to be an inflation hedge, I stick with RR.
By the way, PIMCO All Asset All Authority (PAUIX) holds about equal amounts of Plus and RR. But this may not be a deliberate decision by the manager.
Comments
Commodity RR: "A Double Real™ inflation-hedging strategy
Instead of investing in physical commodities, the Fund purchases derivatives linked to a broad index, helping it diversify without committing substantial capital. The Fund then “collateralizes” these derivatives with an actively managed TIPS portfolio. This dual approach seeks to capitalize on real (after-inflation) returns from commodities and real returns from TIPS. TIPS may decline in value if interest rates rise, and may be particularly sensitive if real interest rates rise rapidly."
CommoditiesPlus: "The Fund combines a non-leveraged position in the Credit Suisse Commodity Benchmark with a portfolio of high-quality, short-term bonds. The commodities futures capture the price return of the commodities index, while PIMCO’s active management of the bond portfolio seeks to add incremental return above the index. The Fund maintains a high overall portfolio quality, and enhances diversification by investing in a variety of high-quality securities, such as mortgages and hedged non-dollar bonds, as well as relatively risk-free assets such as T-bills and money market instruments. The Fund may also invest in securities with ratings below AAA to capture additional yield. "
I own RR, and have never felt the need to add or switch to Plus.
The only issue with RR is that it does tend to throw off very large distributions at times.
DC
I took a quick look at the two indexes and DJUBS (RR) has much more agriculture exposure while CSCI (Plus) has more energy. CSCI seems to be a newer index (and Plus a newer fund) so maybe it has some new whiz-bang methodology to it. Plus was clearly the better fund in 2011.
I think RR is expected to perform better if inflation starts to ramp up because of its TIPS strategy. Since my commodities allocation is supposed to be an inflation hedge, I stick with RR.
By the way, PIMCO All Asset All Authority (PAUIX) holds about equal amounts of Plus and RR. But this may not be a deliberate decision by the manager.