rumi
Ensign
Posts: 40
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Post by rumi on Dec 7, 2022 6:30:12 GMT
PDI: $0.65
PTY: $0.15
PCN: $0.15
PAXS: $0.52
PDO: $0.96
What actions will you perform knowing these distributions are coming up?
How does everyone feel about these? For me, it's in line with what I expected.
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Post by johnsmith on Dec 7, 2022 9:41:57 GMT
PDI: $0.65 PTY: $0.15 PCN: $0.15 PAXS: $0.52 PDO: $0.96 What actions will you perform knowing these distributions are coming up?
How does everyone feel about these? For me, it's in line with what I expected. I'll only buy more after the Ex-dates, nothing until then. |
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rumi
Ensign
Posts: 40
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Post by rumi on Dec 7, 2022 10:23:44 GMT
johnsmith What’s your rationale behind buying more after the ex-date? Do CEFs usually drop MORE than the decrease from the special dividend payout?
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Post by uncleharley on Dec 7, 2022 12:58:40 GMT
rumi , There’s a dividend capture trading technique you can research. The answers are all there. It can be used year round. We hold all of those but not the California muni that was left off your list. All our excess income like this is reinvested into PONAX currently yielding about 5%. Another income stream with less range in yearly value then a CEF but still above our personal inflation rate. Do you have a link or something to lead us to the dividend capture technique? |
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Post by ECE Prof on Dec 7, 2022 15:22:21 GMT
PDI: $0.65 PTY: $0.15 PCN: $0.15 PAXS: $0.52 PDO: $0.96 What actions will you perform knowing these distributions are coming up?
How does everyone feel about these? For me, it's in line with what I expected. I'll only buy more after the Ex-dates, nothing until then. I also like and try to do it every month for reinvesting my distributions. On the day of distributions, the automatic reinvestment cash floods the market and pushed the price up. Although, I have also tried the ex-div date, it does not work always. People like you and me push the prices again, especially, PIMCO CEFs. So, I buy two or three days after the distributions.
Anyway, just my two cents.
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Post by ECE Prof on Dec 7, 2022 15:48:04 GMT
I tried it back in 2017. But, you always end up paying more prices. In fact, you can use the DIV capture technique on the same month at the least twice a month by moving the cash after the record date to another and keep the shares until the next record date, and then following the same technique. Sometimes, you could earn more than 2%. But, if you account for the loss after Ex. div. and price increase of the next one, you end probably end up losing, not gaining so much. Besides, it makes Uncle Sam rich. So, I stopped doing it after 2018 and staying with PCI and a few BDCs, up or down. Now, I am staying with PDI and ECC.
An active trader like you may enjoy doing it using your T/A techniques. I did it for a year back in 2016-2017. If you want to do it, you may need some help from the Dividend channel. Here is the link.
I used to prepare a list in spreadsheet form and choose to flip using the list. It is not only CEFs, but you can use BDCs, Preferreds, etc.
You can also play this game for CG and reduce the taxes.
It seems that ECC's UNII keeps falling based on the previously published data, and its NAV has fallen. The current coverage ratio is 95.4%. But, unless they expected more income expected with increasing interest, they would not have announced another $0.50 special this month but payable in Jan., 2023.
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rumi
Ensign
Posts: 40
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Post by rumi on Dec 7, 2022 15:53:05 GMT
steelpony10 , I’m skeptical of dividend capture strategies working. Because I researched this a while back, and the data simply does not support it. I read this in-depth article by an investor who quantitatively and painstakingly did the hard work, and concluded the following: In fact, the author noted that the evidence suggest it might be a better strategy to do the oppsite! I can recommend reading the source article, which was excellently written and contains many charts and data points to back it up: A Look At Dividend Capture In CEFs
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Post by ECE Prof on Dec 7, 2022 16:35:09 GMT
“In fact, the author noted that the evidence suggest it might be a better strategy to do the opposite.”
I am in agreement with this statement, after trying in my life for a year. Besides, it is a big pain, trying to figure out, which one you should choose. It is all a guessing game, with not much real practical gain.
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Post by retiredat48 on Dec 7, 2022 17:17:08 GMT
PDI: $0.65 PTY: $0.15 PCN: $0.15 PAXS: $0.52 PDO: $0.96 What actions will you perform knowing these distributions are coming up?
How does everyone feel about these? For me, it's in line with what I expected. This special distribution IS TERRIFIC...Larger than I thought would be. Further, at a time when falling prices were occurring due rate hikes and mortgage rates rising greatly, this shows that PIMCO still made a lot of money/income for these funds. That is, a special shows they really over-earned their UNNI tragets to support monthly distributions. I was also surprised last year that in its first year of operations, PDO had a goodly year end special disty. My recently-retired brother is estatic his new PDI purchases (converting to an income portfolio) are up in price, and now a goodly special distribution. So are all current PDI owners. Disclosure...I own PDO and PDI and PTY...can now buy Xmas presents! R48 |
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Post by retiredat48 on Dec 7, 2022 17:21:20 GMT
FWIW...
My Current CEF Holdings:
(CEF's only)...
DSL (small holding)
HPS
JPI
NTG
PDI...largest holding
PFN
PDO
PTY
-------------------------------------------------------------------
Past month...no changes; added some PDI for my youngest brother's recent-retiree account conversion from growth, to more income. (First time he has ever listened to me!)
R48
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Post by richardsok on Dec 7, 2022 18:27:16 GMT
Going out on a limb here with a supposition, looking at the ratios between the most recent published UNII numbers and the actual special disty announced. The differences appear interesting.
LAST UNII SPEC DIST percentage
PDI .98 .65 66 %
PDO 1.02 .96 94
PAXS .62 .52 84
I'm guessing that Pimco has more confidence into PDO sustainability than the other two, either that, or perhaps PDO just had a better November than the other two. Either way, PDO may be a candidate for a possible distribution increase.
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Deleted
Deleted Member
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Post by Deleted on Dec 7, 2022 20:15:28 GMT
CC (Dick) at FC believes that PIMCO in attempting to preserve NAV is distributing specials at the minimum necessary to avoid excise tax.
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Post by ECE Prof on Dec 8, 2022 0:19:31 GMT
@haven,
What is FC? Fidelity..? Then, what?
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Post by johnsmith on Dec 8, 2022 1:50:15 GMT
johnsmith What’s your rationale behind buying more after the ex-date? Do CEFs usually drop MORE than the decrease from the special dividend payout? The NAV should fall. a day or two later, Market Price should follow.
CEFs are usually retail, and some retail investors when they see a large fall in NAV, sell a few days later decreasing Market Price.
Also, if I buy before Ex-Div Date. I'll be paying taxes on that extra income.
Most Likely Market Price should be lower after ex-Div day, and I don't pay taxes.
I don't know if I am making sense.
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rumi
Ensign
Posts: 40
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Post by rumi on Dec 8, 2022 7:02:25 GMT
Going out on a limb here with a supposition, looking at the ratios between the most recent published UNII numbers and the actual special disty announced. The differences appear interesting. LAST UNII SPEC DIST percentage
PDI .98 .65 66 %
PDO 1.02 .96 94
PAXS .62 .52 84
I'm guessing that Pimco has more confidence into PDO sustainability than the other two, either that, or perhaps PDO just had a better November than the other two. Either way, PDO may be a candidate for a possible distribution increase. Sorry. Could you explain your supposition in plain English? I'm not sure if I'm following what the key takeaway is here. Thanks. |
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Deleted
Deleted Member
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Post by Deleted on Dec 8, 2022 10:19:12 GMT
@haven , What is FC? Fidelity..? Then, what? Fidelity Investor Community Are you a member? |
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Post by ECE Prof on Dec 8, 2022 14:35:18 GMT
@haven , What is FC? Fidelity..? Then, what? Fidelity Investor Community Are you a member? No. I have known about it in the past. I have to get in touch with them and get an invitation. I may do it sometime in the future. |
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Deleted
Deleted Member
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Post by Deleted on Dec 8, 2022 15:15:04 GMT
Fidelity Investor Community Are you a member? No. I have known about it in the past. I have to get in touch with them and get an invitation. I may do it sometime in the future. Haven't posted there this year, but I am interested in what Dick has to say about CEFs. |
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Post by richardsok on Dec 8, 2022 15:19:21 GMT
Going out on a limb here with a supposition, looking at the ratios between the most recent published UNII numbers and the actual special disty announced. The differences appear interesting. LAST UNII SPEC DIST percentage
PDI .98 .65 66 %
PDO 1.02 .96 94
PAXS .62 .52 84
I'm guessing that Pimco has more confidence into PDO sustainability than the other two, either that, or perhaps PDO just had a better November than the other two. Either way, PDO may be a candidate for a possible distribution increase. Sorry. Could you explain your supposition in plain English? I'm not sure if I'm following what the key takeaway is here. Thanks. Rumi .... Just tossing ideas around, looking at these numbers. Pimco paid out 94% of PDO's last reported UNII but only 66% of PDI's last reported UNII.... and the two UNII numbers were quite similar (only four cents apart). I was wondering why the discrepancy in pay-out percentages. It's unlikely that PDI had a big performance stumble after the report came out that didn't affect PDO. Might it be that PDI is "pushing the envelope" paying out 13% while PDO more conservatively distributes 10% ? If so, going forward PDO could more rapidly accrue 2023 UNII than PDI, just like it did in 2022. This month's special dividends will pay out roughly 3% of PDI current price but about 6% of PDO's market value.... thus nicely offsetting PDI's 13% monthly distys compared to PDO's 10% Takeaway: since PDO seems to be distributing more conservatively, it may be less exposed to market shocks. Am interested in seeing what occurs in price to these puppies after the ex-div day. If their prices plunge more than their total payouts, (not to mention the added late year tax-selling tacked on), late December could be heckuva buy oppty. I'm already heavily allocated. Hope that answers yr question. |
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rumi
Ensign
Posts: 40
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Post by rumi on Dec 8, 2022 18:20:27 GMT
richardsok, Thanks for the good explanation. I already have a full position in PDI. I tripled my PDO position today. If PDO drops a lot more soon (post ex-dividend, or perhaps in January), I’d be happy to buy even more. I don’t own PAXS yet but I think I will buy some very soon.
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Post by fred495 on Dec 9, 2022 15:02:10 GMT
johnsmith What’s your rationale behind buying more after the ex-date? Do CEFs usually drop MORE than the decrease from the special dividend payout? The NAV should fall. a day or two later, Market Price should follow.
CEFs are usually retail, and some retail investors when they see a large fall in NAV, sell a few days later decreasing Market Price.
Also, if I buy before Ex-Div Date. I'll be paying taxes on that extra income.
Most Likely Market Price should be lower after ex-Div day, and I don't pay taxes.
I don't know if I am making sense.
But, if you buy a CEF in an IRA, for example, does it really matter if you do it before or after the Ex-Div Date? Fred |
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Deleted
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Post by Deleted on Dec 9, 2022 15:44:48 GMT
The NAV should fall. a day or two later, Market Price should follow.
CEFs are usually retail, and some retail investors when they see a large fall in NAV, sell a few days later decreasing Market Price.
Also, if I buy before Ex-Div Date. I'll be paying taxes on that extra income.
Most Likely Market Price should be lower after ex-Div day, and I don't pay taxes.
I don't know if I am making sense.
But, if you buy a CEF in an IRA, for example, does it really matter if you do it before or after the Ex-Div Date? Fred I try to avoid buying or selling a day or two before or after the ex-date in either account because of price swings around ex-dates. On occasion, I might forget to look it up. |
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Post by johnsmith on Dec 9, 2022 18:20:56 GMT
The NAV should fall. a day or two later, Market Price should follow.
CEFs are usually retail, and some retail investors when they see a large fall in NAV, sell a few days later decreasing Market Price.
Also, if I buy before Ex-Div Date. I'll be paying taxes on that extra income.
Most Likely Market Price should be lower after ex-Div day, and I don't pay taxes.
I don't know if I am making sense.
But, if you buy a CEF in an IRA, for example, does it really matter if you do it before or after the Ex-Div Date? Fred
Generally for mutual funds, ETFs (which are priced close to NAV), buying in an IRA should make no difference.
For CEFs it may or may not work. depends on the premium/discount post ex-div day. If the premium increases after ex-div, you might be better off buying before.
if the premium decreases after ex-div, you will be better off buying after.
The issue with CEFs is one of discounts/premiums changes pre & post ex-dates.
During a bull market, you may be better off buying BEFORE ex-date. During a bear market, you will probably be better off buying AFTER ex-date.
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Post by fred495 on Dec 9, 2022 22:21:31 GMT
Thanks for your informative comments, haven and johnsmith.
Much appreciated.
Fred
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