PTY - PTY: Is It Really Worth The Price? Probably Not

• PTY is a very popular fund, both on Seeking Alpha and amongst PIMCO investors. The fund gets a lot of coverage, and its massive premium to NAV indicates many die-hard followers.
• With this hype, PTY seems to be the king of the jungle, sitting at top the pack in terms of premium for the long term. That history could support more gains, but it's risky.
• The recent volatility should give investors pause. Yes, it could be a buying opportunity, but it should also reiterate that this fund is not for the risk averse.
• The high yield credit sector is improving, so PTY's underlying assets should hold up reasonably well. However, with a recent income cut and a hefty premium, future gains may not be alpha-generating.

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