2024-07-13 00:49:52 ET
Summary
- Inflation easing may lead to a faster than expected Fed pivot, benefiting PIMCO Dynamic Income Fund.
- The CEF's portfolio structure has shifted slightly since my last work in March, with PDI now overweighting high-yield credit.
- The price differential between net asset value and market price may expand with potential rate cuts.
As per the latest inflation report, price pressures continued to ease in June, meaning the Federal Reserve is moving closer to a federal fund rate cut. One investment that may benefit from a changing federal fund rate trajectory is the PIMCO Dynamic Income Fund ( PDI ) which owns a large portfolio of fixed-income investments like mortgage securities and high-yield credit. In my opinion, the nearing rate cut decision could spur interest in the PIMCO Dynamic Income Fund again and lead to net asset value growth. Since PDI pays a 14% yield and the macro environment is set to be more favorable soon, I believe the closed-end fund ((CEF)) could be an attractive investment options for dividend investors especially!...
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PDI: Get In Before The Fed Pivots And Lock In A 14% Yield