The PDI And PTY Dilemma

Oct. 07, 2022 10:38 AM ETPIMCO Dynamic Income Fund (PDI), PTY154 Comments


  • There are good reasons to be attracted to the PIMCO Dynamic Income Fund and the PIMCO Corporate & Income Opportunity Fund.
  • Both funds are yielding about 12% now, quite attractive in both absolute and relative terms.
  • These yields are about 4x higher than risk-free interest rates and also about 10% above their historical averages. However, I see both funds in a dilemma.
  • For income generation, their yields are not high enough to compensate for the current risks.
  • And for capital appreciation, their allocation strategies are very likely to continue lagging behind the overall market.
  • I do much more than just articles at Envision Early Retirement: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

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There are good reasons to be attracted to the PIMCO Dynamic Income Fund (NYSE:PDI) and the PIMCO Corporate & Income Opportunity Fund (NYSE:PTY). As you can see from the following chart, both funds

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Source: Seeking Alpha

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Source: FRED

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Source: FRED and author

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Source: Portfolio Visualizer

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This article was written by

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** Disclosure** I am associated with Envision Research

I am an economist by training, with a focus on financial economics. After I completed my PhD, I have been professionally working as a quantitative modeler, with a focus on the mortgage market, commercial market, and the banking industry for more than a decade. And at the same time, I have been managing several investment accounts for my family for the past 15 years, going through two market crashes and an incredible long bull market in between. 

My writing interests are mostly asset allocation and ETFs, particularly those related to the overall market, bonds, banking and financial sectors, and housing markets. I have been a long time SA reader, and am excited to become a more active participator in this wonderful community! 

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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