PDI: Pain Could Be On The Horizon

Summary

• Rising interest rates have negatively impacted bonds and bond funds.
• PDI utilizes leverage, the cost of which is borne ultimately by investors.
• While PDI's strategy is bound to work in certain environments, we do not think conditions will be favorable towards the fund for some time.

monsitj

Bond Stuff

While many, if not most, readers are familiar with exactly why rising interest rates have pummeled bonds and bond funds over the last two years, sometimes the basics are worth revisiting.

When interest rates rise, yields on outstanding

Analyst’s 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.

Disclaimer: The information contained herein is opinion and for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Factual errors may exist, and while they will be corrected if identified the author is under no obligation to do so. Author Is also under no obligation to update changes of view. The opinion of the author may change at any time and the author is under no obligation to disclose said change. Nothing in this article should be construed as personalized or tailored investment advice. Before buying or selling any stock, you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal, and readers should not utilize anything in our research as a sole decision point for transacting in any security for any reason.