CGO - PDX: An Unusual Offering From PIMCO But A Good One

2024-06-03 05:51:42 ET

Summary

• PIMCO Dynamic Income Strategy Fund has a lower yield than many of its peers, but its share price has outperformed significantly in the past year.
• The fund's strong recent performance relative to peers is attributed to its allocation to pipeline operators, which have outperformed bonds and many other securities over the past year.
• PDX employs leverage, but it is not excessive compared to its peers and does not pose significant risk.
• The fund fully covered its distribution in the most recent six-month period and should not have trouble sustaining its recently raised 6.44% yield.
• The fund trades at an enormous discount on NAV, a rarity for a PIMCO fund.

The PIMCO Dynamic Income Strategy Fund ( PDX ) is a closed-end fund that income-focused investors can employ as a method of earning a high level of income from their assets. As regular readers are likely well aware, PIMCO funds in general tend to have remarkably high yields compared to their peers. However, this one seems to be an exception, as its 6.44% yield is not particularly impressive for a debt fund in today's environment. We can see this quite clearly by comparing this fund's yield to that of its peers:

For further details see: