sam
Lieutenant
Posts: 123
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Post by sam on May 1, 2023 3:51:25 GMT
PDI used to be very popular here. So not sure if still the case.
I was looking at portfolio and it has leverage of 41% or 71% (it depends how you calculate leverage, from total assets or from fund assets (non- borrowed money)).
Any way, thing I noticed now vast majority of of assets have maturity of under 7 years (100% of 171%).
Bond funds have 2 risks, duration and credit risk.
So duration point of view most of damage has already done. LQD is down 20% and so 40% decline is sort of expected due to leverage. Next factor is how potential credit default will affect price/NAV esp. with recession (if there is any)?
Q: PDI price is down (summer of 2021 till now) from $29.75 to $18 (40% decline for a 71% leverage portfolio) vs 20% decline for LQD ($136.5 till $109.5) (I understand they may not very comparable) due to duration risk?
Q: In past recessions credit risk affected price/NAV tremendously. So are we looking at further decline of such proportion if do indeed go into recession? That will be very bad downfall for a CEF which is already 40% + down.
It seems like this is sort of repeat for 2008-09 for CEFs.
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Post by gman57 on May 1, 2023 21:17:29 GMT
May Pimco distributions are out... no changes
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Post by FD1000 on May 1, 2023 21:56:08 GMT
PDI used to be good, but since 1-1-2020 the SP500 made 50+% more. PDI looked pretty good in 01/2023,but in the last 6-7 weeks it lost over 10%, while the SP500 made money and has much better performance YTD. Looks to me, the choice is clear, and I have been saying it for at least 3 years. schrts.co/HKsqagWx |
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Post by steadyeddy on May 1, 2023 23:11:22 GMT
PDI used to be very popular here. So not sure if still the case.
I was looking at portfolio and it has leverage of 41% or 71% (it depends how you calculate leverage, from total assets or from fund assets (non- borrowed money)).
Any way, thing I noticed now vast majority of of assets have maturity of under 7 years (100% of 171%).
Bond funds have 2 risks, duration and credit risk.
So duration point of view most of damage has already done. LQD is down 20% and so 40% decline is sort of expected due to leverage. Next factor is how potential credit default will affect price/NAV esp. with recession (if there is any)?
Q: PDI price is down (summer of 2021 till now) from $29.75 to $18 (40% decline for a 71% leverage portfolio) vs 20% decline for LQD ($136.5 till $109.5) (I understand they may not very comparable) due to duration risk?
Q: In past recessions credit risk affected price/NAV tremendously. So are we looking at further decline of such proportion if do indeed go into recession? That will be very bad downfall for a CEF which is already 40% + down.
It seems like this is sort of repeat for 2008-09 for CEFs.
, I am sure you know this but, closed end funds have another risk that LQD doesn't have. That is discount/premium risk. The prices for PDI you quoted as market prices but NAVs. Also, an ETF publishes its holdings daily while a CEF does not and PDI uses all kinds of tools in the financial trade that PIMCO is known for. I personally consider CEFs as equity equivalent in the sense the loss of capital could be very long or permanent. With LQD, the NAV will slowly drift to align with the interest rates. |
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Post by steelpony10 on May 2, 2023 0:15:03 GMT
sam , Interest = greed. Lol. If it scares you look for something you’re comfortable with or fits a plan. I enjoy the high income way above my personal inflation rate, 8%+ in better times. My kids or LTC get the values. Both equities and bonds have variable values but bonds pay something through all markets. Equities sound like crickets now for an unknown period. Government defaults, elections, Fed rates, Russia, China, Putin etc. I favor income. All I spent last month is replaced with any leftover funds directed for more income, compounded at high rates if you choose. I have big problems holding equities (we hold VTI) because I never know when cap gains stop or resume. In an average 15-20 year retirement that trait alone is enough for me. Waiting for a recovery and penny pinching until then reminds me too much of the retirees I knew who started their golden years in 1968 or so. They were really bitter.
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Post by Fearchar on May 2, 2023 1:08:12 GMT
May Pimco distributions are out... no changes That is good, but thinking ahead I do not see how much longer those distribution s can be maintained. |
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Post by johnsmith on May 2, 2023 9:09:33 GMT
PDI used to be very popular here. So not sure if still the case.
I was looking at portfolio and it has leverage of 41% or 71% (it depends how you calculate leverage, from total assets or from fund assets (non- borrowed money)).
Any way, thing I noticed now vast majority of of assets have maturity of under 7 years (100% of 171%).
Bond funds have 2 risks, duration and credit risk.
So duration point of view most of damage has already done. LQD is down 20% and so 40% decline is sort of expected due to leverage. Next factor is how potential credit default will affect price/NAV esp. with recession (if there is any)?
Q: PDI price is down (summer of 2021 till now) from $29.75 to $18 (40% decline for a 71% leverage portfolio) vs 20% decline for LQD ($136.5 till $109.5) (I understand they may not very comparable) due to duration risk?
Q: In past recessions credit risk affected price/NAV tremendously. So are we looking at further decline of such proportion if do indeed go into recession? That will be very bad downfall for a CEF which is already 40% + down.
It seems like this is sort of repeat for 2008-09 for CEFs.
I am a fan of PDI. I’d say it has performed pretty much like it should considering leverage, premium and credit quality - in hindsight. My holdings of PDI are pretty much flat compared to 12 months ago. I re-invest the dividend too. Credit quality did not prevent a fall in value. We can see the same fall in US Govt bonds. See the same in investment grade REITs like PLD, ARE etc. ARE fell from 220 -> 120, 45% fall. It’s still paying the same dividend. Around 30% debt. PDI fell from 26 -> 18, 30% fall. So the fall in price is not really credit related, it’s related entirely to the interest rates. No one really expected them to rise this fast. The way I see it - PDI is a known quantity- credit, management and duration. It performed fantastically and I know management will take advantage of any future market dislocation to the benefit of the shareholders. |
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Post by anitya on May 4, 2023 3:48:26 GMT
May Pimco distributions are out... no changes , Curious where you got that info when you posted. Around the same time you posted, I checked the PIMCO site for CEF press releases and Yahoo Finance and neither had reported yet. It would be nice to know the source you go to. Thanks. richardsok , In the PIMCO stable, PAXS looks reasonable to play around the Ex date, and I entered it after sitting on the CEF sidelines for nearly 2 years. However, I suspect (without evidence or DD) PAXS might have the most private debt in that stable. Do any of you guys know if SA or some other site reported the percentage of level 2 and level 3 assets in each of the PIMCO multi CEFs? If not, I would be curious if anybody here has done the work and willing to share. |
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Post by johnsmith on May 4, 2023 12:05:29 GMT
Level 1 / 2 / 3 - Look at the Annual Report or the Semi-Annual Report
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Post by steelpony10 on May 4, 2023 12:45:40 GMT
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Post by anitya on May 4, 2023 13:26:00 GMT
Level 1 / 2 / 3 - Look at the Annual Report or the Semi-Annual Report
I know these valuations are required SEC reporting for every fund, including OEFs. The link takes me to a 404 error - it is possible I need to use my laptop and not an iPad to access the page. I will do that when I am out of bed. Does the link give me a table of comparison of their CEFs’ %age of level 1,2,3, which is what i was looking for if somebody has already done the work? |
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Post by gman57 on May 4, 2023 13:45:10 GMT
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Post by johnsmith on May 4, 2023 14:03:15 GMT
Level 1 / 2 / 3 - Look at the Annual Report or the Semi-Annual Report
I know these valuations are required SEC reporting for every fund, including OEFs. The link takes me to a 404 error - it is possible I need to use my laptop and not an iPad to access the page. I will do that when I am out of bed. Does the link give me a table of comparison of their CEFs’ %age of level 1,2,3, which is what i was looking for if somebody has already done the work? These are Annual Reports, you can use your iPad to browse over to Pimco.com
go to the page for the CEF you are looking for and then scroll down to the documents - Annual Report
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Post by anitya on May 5, 2023 8:11:00 GMT
I already mentioned I checked the PIMCO CEF press releases page. It is possible I missed it by a whisker before you picked it up. Here is the direct link to the CEF press releases I mentioned, in case you are interested - www.pimco.com/en-us/resources/product-resources/cef-press-releasesWhat happens is the website guy at PIMCO who is responsible for posting these sometimes does not get to it until much later than when PIMCO actually shares the information with the financial press. So, sometimes I find these on Yahoo Finance much before they are posted on PIMCO website. I was trying to figure out which site posts these the earliest. |
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Post by mnfish on May 5, 2023 12:32:03 GMT
From the recent (March 31) PDI holdings spreadsheet - I chose some with 2% or higher positions
They certainly go out on the risk spectrum - Some of these are emerging from bankruptcy or some sort of reorganization - All are rated junk as far as I can tell via Google search
Name Yield % Net Assets
Profrac Services LLC 12.099 - 12.420% 2.053%
Envision Healthcare Corp. TBD% 2.097%
Promotora de Informaciones SA TBD% 2.516%
Syniverse Holdings, Inc. TBD% 2.269%
Voyager Aviation Holdings LLC 8.500% 2.181%
Intelsat Jackson Holdings SA 6.500% 2.676%
Wesco Aircraft Holdings, Inc. 10.500% 4.032%
Orient Point CDO Ltd. 5.024% 2.850%
Gateway Casinos & Ent TBD% 1.990%
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Post by anitya on May 7, 2023 23:13:12 GMT
As of June 30, 2022, looking at their annual reports each of the following have hardly any Level 1 assets; their approx percentage of Level 3 assets is as follows: PDI -20% PDO -14% PAXS -10% As of Dec 31, 2022, the percentage of Level 3 assets have changed materially - PDI -13% PDO -9% PAXS -10% Fair value of Total assets of both PDI and PDO have also decreased by 10% during the six month period ending Dec 31, 2022. I have not looked to see if this decrease is a result of deleveraging, dropping asset prices or a combination of both. (I did not observe a material decrease in total assets of PAXS.) www.sec.gov/ix?doc=/Archives/edgar/data/0001510599/000119312523064788/d330906dncsrs.htmPlease check my calcs before relying on them. "The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Levels 1, 2, and 3 of the fair value hierarchy are defined as follows: Level 1 — Quoted prices in active markets or exchanges for identical assets and liabilities. Level 2 — Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs. Level 3 — Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair value of investments." |
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Post by anitya on May 7, 2023 23:29:54 GMT
Level 1 / 2 / 3 - Look at the Annual Report or the Semi-Annual Report
I know these valuations are required SEC reporting for every fund, including OEFs. The link takes me to a 404 error - it is possible I need to use my laptop and not an iPad to access the page. I will do that when I am out of bed. Does the link give me a table of comparison of their CEFs’ %age of level 1,2,3, which is what i was looking for if somebody has already done the work? Just an FYI - The above link did not open on my computer either. |
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