I was wondering the same thing - it seems like the NAV is not updated on a daily basis or something like that - PTTRX for the most part seems to change on a daily basis but I see the same issue with HSTRX. Maybe with dividends accrued and other influences it is such that often there is no change in NAV. I called the doubleline office yesterday and left a message asking this same question. I will try and update this post when I get an answer.
"The dividend accrual frequency for theDoubleLine Total Return Bond Fund is monthly. Income accrual is reflectedin the NAV each day. On the last business day of the month, when thedividend is paid, the NAV of the Fund will be reduced by the amount of thedividend payment. As you allude to below, this change may be offset inpart by fluctuations in the market value of the underlying securities. You have selected to reinvest your dividends. So, on June 30th, youwere credited additional shares. Morningstar’s “yield”is not the dividend yield. The dividend yield fluctuates monthly but hasbeen around 7.5% for the past two months. "
Questions: 1. Why does the fund drop on the last day of the monthnegative to the same amount as the dividend? Other bond funds just pay adividend at the end of the month and there is no drop. If the dividend is paidon a daily basis, shouldnt it just be paid on that daily basis but no drop invalue at the end of the month?
2. Also if you paid me $1,000 in dividends on a daily basisthroughout the month, but the fund drops by - $1,000 at the end of themonth it looks as if I didn't actually get paid anything. I know I receivedmore shares by reinvesting but thats really the same thing: $1,000 worth ofmore shares, but $1,000 drop in value that day. Can you further explain this?
Response from Doubline "1. There are bond funds that accrue a dividend payment daily, butthere are an equal number that accrue dividends on a monthly (or quarterly,semiannually) basis as DoubleLine does. For DoubleLine’s TotalReturn Fund, the daily NAV includes the value of the portfolio including itsearnings. Every day there is a positive contribution to the NAV thatreflects the income earned by the portfolio. An investor who sellshis/her shares mid month receives his/her share of the income for the timeperiod owned by the fact that the NAV includes all the earnings accumulatedsince the last dividend payment.
2. Below is an example to demonstrate how the dividend processworks. To highlight the dividend, this example assumes there is no change tomarket value of the underlying assets. As you can see the NAV at purchaseis $11 and the NAV at the end of the month is again $11. During the monththe NAV rose to $11.07 to reflect the earnings generated by the portfolio anddropped back to $11 after the 7 cent dividend was paid. The investorreceived an additional 63.64 shares and the ending value of the investment is$700 more than the investor’s beginning balance.
Purchase transaction/Beg of month Nav 11.00 Shares 10,000.00 Value $110,000 NAV Prior to 7 cent dividend 11.07 Shares 10,000.00 Value $110,700 Payment/Reinvestment of Dividend 0.07 Shares 63.64 $700 Ending Balance/End of month Nav again back to 11.00 Shares 10,063.64 Value $110,700 "