PTY - PTY Has Been Holding Steady While Generating Monthly Income Yielding Over 10%

2024-02-12 09:00:00 ET

Summary

• The PIMCO Corporate and Income Opportunity Fund has maintained its pace of generating income, despite speculation about the impact of higher rates on corporations.
• I remain bullish on PTY, as I anticipate appreciation of its underlying assets and the continuation of monthly income during a Fed easing cycle.
• While there are risks associated with PTY, such as complex investments and exposure to global macro events, I see potential upside and plan to increase my position.

The PIMCO Corporate and Income Opportunity Fund ( PTY ) continues to distribute income at the same pace since September of 2021. There has been some speculation as to whether the amount of income generated would remain intact as higher rates put additional pressure on corporations. Throughout the entire Fed hiking cycle, PTY has continued to produce an annualized distribution of $1.43 and pays a monthly distribution of $0.12. I am still bullish on PTY as we head into a Fed easing cycle because PTY's underlying assets should appreciate while generating the same amount of income. Shares of PTY seem to have bottomed in the fall of 2023, and I believe shares can continue into the mid-teens as rate cuts are implemented. As an income investor, I am excited, and I am looking forward to adding to my position as PTY could generate both capital appreciation and monthly income going forward....

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