PDO - PIMCO Dynamic Income Strategy Fund (PDX): New And Improved Still Among Best-Performing CEFs

2024-03-18 10:45:34 ET

Summary

• I first recommended the PIMCO Dynamic Income Strategy fund (PDX) January 2022 at $13.20.
• Back then, the fund was known as the PIMCO Energy & Tactical Credit Opportunities fund (NRGX), and after a rough start during COVID-19, PDX has been the No. 1 CEF performer.
• And when I say CEFs, I'm talking about equity and bond CEFs. And yet, PDX still trades at a wide -13.3% discount, the lowest valuation of all the PIMCO funds.
• But soon, PDX will become just like all of the rest of the PIMCO multi-sector credit CEFs, only at a much better valuation and while keeping a portion of its portfolio in energy investments.
• So if you want to talk timing, PIMCO has done everything right with this $1 billion fund and I can't wait to see what it can do when leverage is re-applied and PIMCO raises PDX's distribution again.

I should first say that if you're expecting another 10% to 14% yielding PIMCO CEF, which is sort of the norm for their multi-sector credit/bond funds, then you might be disappointed to learn that the PIMCO Dynamic Income Strategy fund ( PDX ) , $20.41 closing market price , only yields a current + 6.6% .

And that's after PIMCO raised PDX's distribution twice in the same declaration earlier this month in this press release . But before you write off PDX due to its pedestrian market yield, you might want to learn a little history on the best performing CEF over the last few years and why PDX has probably not seen its last distribution increase....

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