May 01, 2012
Once upon a time there were sales loads (they still exist). Let's say you bought the PIMCO Total Return fund through a broker and paid a 3% load on Feb 29. The appreciation of the fund still leaves you -1.5% underwater. Meanwhile, the PIMCO Total Return ETF is up +3.8%. In 2 months you have given up +530 basis points in performance relative to simply buying the ETF. While fees like loads are not officially counted against Bill Gross' performance, trust that many investors have been paying ludicrous fees like this for years and years --- and it still goes on. If you think we are making this up, then you don't understand how the financial services industry works.
This ETF is likely going to blow through $1 billion and then head much higher. $665 million in less than 50 trading days.
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