That statistic should speak for itself in a world where most managers fail to deliver on their value. As a testament to their results, 91% of PIMCO assets have outperformed their respective benchmark, net of management fees. The company has produced reliable, strong returns through capable management. PIMCO needs no introduction having provided investment management services for over fifty years. The West Coast behemoth has a storied past including eccentric manager Bill Gross who pioneered fixed income investing. PIMCO is a premier manager of mutual funds, ETFs, CEFs, managed accounts, and other private investments. Let’s dive into the fund and see what has led to PDI’s success. As of current share prices, the fund has a forward dividend yield of 10.5%, well above the current rate of inflation. The fund is actively managed, using leverage to assemble a high performance portfolio of income producing assets. PDI and similar funds offered by PIMCO provide a compelling value proposition for investors. Other asset classes have followed suit and today, most yields will not conquer a rate of inflation above 6.00%. Treasury yields have remained close to a bottom since the depths of COVID-19. However, the upward climb in inflation rates combined with yield compression across various asset classes has resulted in a challenge for those looking to achieve a real return. The predictability combined with higher yields in other asset classes has provided investors with an arsenal to generate value over the crawl of inflationary pressure. Since the Great Financial Crisis, inflation has remained controlled with limited upward and downward motion. Recent gains in wage growth have indicated inflation may be sticking around longer than the federal reserve had originally anticipated. Recently, the word transitory seems to have adopted a new meaning as inflation has no signs of slowing down. To make matters worse, the rate of inflation has climbed to the highest levels in decades and remains stubborn. PDI has not attracted the same premium valuation as other PIMCO funds such as PTY, resulting in a more reasonable long-term opportunity. The fund’s impressive performance is driven by a winning and battle tested strategy. The PIMCO Dynamic Income Fund ( NYSE: PDI) is an established CEF that has performed well over nearly all time frames. Smshoot/iStock via Getty Images Our Thesis
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