<<Do you know that fund pays no yield?>>
I spoke at some length with a broker from Upland Security. In fact, idle cash, or cash sitting around between contracts, gets parked in treasuries. The interest is applied to reduce the fund fees.
But the fees are much worse than 5%. The 5% is a one-time "subscription fee". Add 1% annual management fee, 0.75% (on average) brokerage fees, 0.5% for marketing, and some miscellaneous fees.
Nevertheless, the prospectus states that the fund has to achieve a 1st-year return of 4.52% to break even, in spite of all these fees. I asked how this was possible - it apparently reflects the credit for interest from the treasuries.
If you set up an IRA with Upland, they will tack on additional IRA management fees. If you try to set it up through Schwab, you need to contact their Alternative Investments group. Standard Schwab brokers have no idea what this fund is about. However, Schwab will charge you $250 to set up the IRA for an alternative investment, plus $50 annual fee, plus a few miscellaneous fees. Everybody is getting their snout in the trough - this is not for me. I'm working with Fidelity at the moment to see whether they will set something like this up.
Finally, just for informational purposes, the composition of the fund is more or less static (I don't think Rogers has adjusted the mix more than once or twice, and then only slight tweaks). However, because futures contracts are not long term, they have to close out old contracts and purchase new. This is apparently done monthly, and is an ongoing process. I don't know how automated this process is with the fund but probably requires Rogers' Midas Touch from time to time. |
