|
|
Post by Chahta on Nov 3, 2021 16:54:21 GMT
How are CEF distributions paid? PTY paid at $18.46 yesterday, higher than closing price.
|
|
|
|
Post by yogibearbull on Nov 3, 2021 17:05:06 GMT
|
|
|
|
Post by Chahta on Nov 3, 2021 21:15:39 GMT
Was not a clear question. I actually meant what is the reinvestment price? It was higher than the closing price and the NAV. Not sure how that value is chosen. |
|
|
|
Post by steelpony10 on Nov 3, 2021 22:07:45 GMT
|
|
|
|
Post by Chahta on Nov 3, 2021 22:24:36 GMT
I may not be reinvesting either if someone is charging that kind of markup.
The Schwab proprietary program buys at some random price on the reinvestment day. Schwab controls the reinvestment since it is not a function of the CEF. The high was $18.50 and close was $18.31, the reinvestment was at $18.46. CEFs do not reinvest on closing price. Only full shares can normally be bought.
|
|
|
|
Post by steelpony10 on Nov 4, 2021 1:04:39 GMT
Chahta , We compounded the excess cash to needs in growth indexes as mentioned before. That compounded at a higher rate then our CEF’s. Really lucked out. If you don’t need the income then auto invest (DCA) into something else if the fees bother you. If it’s a small amount then it goes to cash but remember you’re losing to inflation there. I guess you have to consider the fees and process to possible gains or losses somewhere else.
|
|
|
|
Post by yogibearbull on Nov 4, 2021 1:27:35 GMT
There are 2 types of CEF reinvestment programs. Common are the broker-sponsored programs where all client reinvestment orders are packaged and a big market-order is executed. The others are when brokers work with the CEF fund companies to reinvest at more predictable prices.
|
|
sgra
Lieutenant
Posts: 64
|
Post by sgra on Nov 4, 2021 3:12:50 GMT
In the past, I have reinvested distributions with two other Pimco CEFs from time to time: PFN and PCI. These are the second type that Yogi mentions. I always got a better deal than market price as spelled out in the prospectus (see below). These are held at Fidelity and Fido operatea a good back office. Vanguard did not participate in the Pimco DRIP, so you have to verify with your broker.
This is from the PTY prospectus (same as PFN and PCI): "If, on a distribution payment date, the NAV is equal to or less than the market price per Common Share plus estimated brokerage commissions (often referred to as a “market premium”), the Plan Agent will invest the distribution amount on behalf of participants in newly issued shares at a price equal to the greater of (i) NAV or (ii) 95% of the market price per Common Share on the payment date. If the NAV is greater than the market price per Common Share plus estimated brokerage commissions (often referred to as a “market discount”) on a distribution payment date, the Plan agent will instead attempt to invest the distribution amount through open market purchases."
|
|
|
|
Post by Chahta on Nov 4, 2021 12:47:46 GMT
Chahta , We compounded the excess cash to needs in growth indexes as mentioned before. That compounded at a higher rate then our CEF’s. Really lucked out. If you don’t need the income then auto invest (DCA) into something else if the fees bother you. If it’s a small amount then it goes to cash but remember you’re losing to inflation there. I guess you have to consider the fees and process to possible gains or losses somewhere else. My thought was to build an income generating position by reinvesting like I have done with OEFs since I don't need the income now. It turns out that I am still accumulating in a way. I like the idea of low cost-basis investments. If I only looked at the year-end statement I would not know the difference. Equities are pretty high now. Turns out it was not fees. It was Schwab buying partial shares on my behalf. Their program use a "market order" on purchase day which could be the high, low or any price in between that day. The way to beat it is to take a cash dist. and buy myself. sgra , I have no choice if Schwab reinvests for me. yogibearbull, I assume that Schwab does pool the clients money to buy. I would think they still need to buy even number of shares. Possibly they could hold a left over partial share for "inventory" or fudge the price by a small amount to make any partial share disappear. What is interesting ETF reinvestments don't work that way. Live and learn. |
|
|
|
Post by judger on Nov 18, 2021 20:33:52 GMT
Yogi, isn't there a 3rd reinvestment type, that of PIMCO? If one's CEF's pay day price is at a 5% or higher premium, then PIMCO gives you a 5% discount off of the pay day price versus the average price to buy that CEF after the pay date.
|
|
