PDI - PDI Under $20 Exceeds A 13% Yield With Potential Upside On The Horizon
2024-04-03 09:00:00 ET
Summary
- PIMCO Dynamic Income Fund (PDI) has been recovering since October 2023, with shares appreciating by 25.05% and 8.19% YTD.
- PDI focuses on generating current income and investing in global debt and income-producing securities.
- The author is bullish on PDI, believing that it will continue to rebound and could potentially reach the mid-20s by the end of 2024.
Since establishing a bottom in October of 2023, the PIMCO Dynamic Income Fund ( PDI ) has been working on its recovery. Since reaching $15.53 on October 25 th, shares of PDI have appreciated by $3.89 or 25.05%. Its recovery has continued in 2024 as PDI has appreciated 8.19% YTD. This also doesn't take into account the $0.22 monthly distribution PDI has paid since 2015, which is a current yield of 13.65%. PDI isn't for everyone, as it focuses on generating current income. Its immediate investment objective is to invest in global debt and other income-producing securities rather than focusing solely on capital appreciation. I still believe there is a strong opportunity in global debt instruments, and a large recovery should occur during a rate-cutting environment, which would push PDI's net asset value (NAV) higher. Prior to the pandemic, shares of PDI were trading in the low $30s, and they were headed back to that level before the macroeconomic environment created a selloff in the debt markets. Now that we have more clarity from the Fed and the economic data indicates that inflation is stabilizing while a lower rate environment is approaching, I believe PDI will continue to rebound. I wouldn't be surprised if PDI is trading in the mid-20s by the end of 2024....
PDI Under $20 Exceeds A 13% Yield With Potential Upside On The Horizon