Bill Me Later
Dryer sheet aficionado
What da... Is PDI turning into another GOF
CEF Holdings --- June 2026
- Thread starter dickoncapecod
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For the uninitiated, briefly, what what's the story that happened to GOF?
AG-YH
Dryer sheet aficionado
Axel Merk resigned from his position on ASA - the ASA Gold & Precious Metals Fund.
The letter he sent to the fund was ... interesting. I expect ASA to liquidate.
The letter he sent to the fund was ... interesting. I expect ASA to liquidate.
GaltintheGulch
Recycles dryer sheets
Same
BuckeyesRC
Recycles dryer sheets
I saw that this morning and bought a bunch. Regardless of the fund's future, miners are oversold.
Doesn't Saba want it to become a BDC with a plan for significant buy backs? I mean, if it liquidates soon, I won't cry. I own it at a 13% discount or so.
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Writing early because I've got "events" Saturday morning.....
The week ended 6/12 produced mixed results for bondish income CEFs. While somebody(s) picked on big liquid PDI sending it down for the week. Most CEFs other than PDO and GOF were up on the week, as were portfolio content ETFs HYG LQD MBB and IEF. Even "sister type" BDCs like ARCC BXSL MSDL ARDC were up on the week. I found this interesting. Corrected for distributions, NAVs were up very nicely for the week....
PAXS +18c. PDI +18. PFN +9. PHK +5. PTY +14. PDO +16. WDI +7. GOF +5
...so there was nothing at all wrong under the hood.
Fed funds futures still call for a likely hike to 3.80% in Q4. The year bill one year forward fell a little to 4.32% and Fed favorite (until now at least) 5yr inflation breakeven 5 years forward is a benign 2.25%. Even in an "inflation week" mostly dominated by breathless SPCX conjecture, the data seem encouraging (IMO). Inflation readings were high but expected and clearly driven primarily by crude/products prices that have moved down -- at least temporarily --- since May readings.
Next week Industrial Production and housing data will be flattish, while retail sales are expected +0.5% with core +0.3% ---- notably showing recent "gains" have been equal to or below inflation. Chair Warsh runs his first FOMC meeting Wednesday. While lots of silly speculation will fill the airwaves, it will be a welcome aboard meeting in which, at best, Warsh will cite some changes he'd like staff to research for later consideration. It won't happen soon, but he may ultimately get the trimmed-mean PCE into Fed's inflation measures --- and it is currently at 2.5% Friday is a holiday.
So what's the bottom line? I'm fully invested again --- and pretty happy with it --' since a lot of evidence has appeared in price actions that suggest the "maybe hike" in Q4 is fully reflected or "over-reflected" in markets. Repeated to everyone's consternation: 12.5% to 16+% quality CEF portfolios are very very cheap against the "threat" of a 3 (THREE!) .8% policy rate and 4.5% or 4.8% 10yr note. It would be nice to lean back and collect these fat yields for a few years....but oil or DC "stuff" could change the current relatively benign view on a dime.
Regards, Dick
The week ended 6/12 produced mixed results for bondish income CEFs. While somebody(s) picked on big liquid PDI sending it down for the week. Most CEFs other than PDO and GOF were up on the week, as were portfolio content ETFs HYG LQD MBB and IEF. Even "sister type" BDCs like ARCC BXSL MSDL ARDC were up on the week. I found this interesting. Corrected for distributions, NAVs were up very nicely for the week....
PAXS +18c. PDI +18. PFN +9. PHK +5. PTY +14. PDO +16. WDI +7. GOF +5
...so there was nothing at all wrong under the hood.
Fed funds futures still call for a likely hike to 3.80% in Q4. The year bill one year forward fell a little to 4.32% and Fed favorite (until now at least) 5yr inflation breakeven 5 years forward is a benign 2.25%. Even in an "inflation week" mostly dominated by breathless SPCX conjecture, the data seem encouraging (IMO). Inflation readings were high but expected and clearly driven primarily by crude/products prices that have moved down -- at least temporarily --- since May readings.
Next week Industrial Production and housing data will be flattish, while retail sales are expected +0.5% with core +0.3% ---- notably showing recent "gains" have been equal to or below inflation. Chair Warsh runs his first FOMC meeting Wednesday. While lots of silly speculation will fill the airwaves, it will be a welcome aboard meeting in which, at best, Warsh will cite some changes he'd like staff to research for later consideration. It won't happen soon, but he may ultimately get the trimmed-mean PCE into Fed's inflation measures --- and it is currently at 2.5% Friday is a holiday.
So what's the bottom line? I'm fully invested again --- and pretty happy with it --' since a lot of evidence has appeared in price actions that suggest the "maybe hike" in Q4 is fully reflected or "over-reflected" in markets. Repeated to everyone's consternation: 12.5% to 16+% quality CEF portfolios are very very cheap against the "threat" of a 3 (THREE!) .8% policy rate and 4.5% or 4.8% 10yr note. It would be nice to lean back and collect these fat yields for a few years....but oil or DC "stuff" could change the current relatively benign view on a dime.
Regards, Dick
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OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Hi. For several years, GOF was able to cover or nearly cover its very large distributions while also being able to characterize a high proportion as ROC. As NAV began to suffer a bit, the consistent premium collapsed --- partly in expectation of a distribution cut and some "just because" other premiums were declining elsewhere. The post you are referring to, asking if PDI was following the same path was IMO more likely an expression of frustration with PDI's recent behavior.
Regards, Dick
PaulR888
Recycles dryer sheets
Hi Dick .... The other day I looked at a couple popular Pimco CEFs and the 2 DoubleLine CEFs I owned many moons ago and WDI and my memory tells me over the last couple of years and looking at yahoo finance chart they were all down between 40% to 55% in price. So price shrinkage is not unique to GOF but historically I've seen more grumbling about its price action. But let me ask you about an extreme example. What if a CEF price goes down to $1-$5 a share, yet an investor is OK with how the NAV looks and the monthly distribution. Other than the obvious large capital loss, are there any other bad things that can happen?
IncomeOriented
Recycles dryer sheets
GOF has multiple sources of portfolio income, that offer the added tax benefit of 65-70% ROC, most of which is non-destructive to NAV. For me, not only the 20% dividend, but also dividend is 70% tax free. Additionally ROC doesn’t add to MAGI to increase IRMAA tax, or add to AGI to increase NIIT taxes. The total after tax returns (of GOF) in my taxable accounts is top end.
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COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
If you look at the 5 year returns of GOF - just over 2% and PDI - just over 3% both of those include reinvestment of the dividend, it should be no surprise that the market price has declined because both have distributions well, well above that. It’s just math.
Even if you look at 3 year returns for PDI - 12.78%, it still should be no surprise that the market price has declined.
If you are concerned by the decline in market value, you are not looking at the bigger picture.
The NAV of the fund is a different story, but our portfolio values are based on market price.
Even if you look at 3 year returns for PDI - 12.78%, it still should be no surprise that the market price has declined.
If you are concerned by the decline in market value, you are not looking at the bigger picture.
The NAV of the fund is a different story, but our portfolio values are based on market price.
IncomeOriented
Recycles dryer sheets
Yes the 25% premium has collapsed, thus substantially decreasing the 3&5 year returns as a function of mathematical fact.
Some brave, or foolhardy souls, such as myself, see an opportunity at these prices looking forward.
Only the Shadow knows…
I just read this analysis of GOF on SA, for what it's worth. (I don't own it.)
Maybe why many folks have always been leery of premiums, myself included. The fact that many find this price level to be so attractive, further affirms that lower premiums (or discounts) can be advantageous. Mainly if the fund is solvent ,and can cover distributions.
IncomeOriented
Recycles dryer sheets
Good article and thanks for sharing.
My takeaway, biggest concern about GOF,
If there is a credit crisis, sell. But, in that circumstance I would have anyway.
The premium compression could result in a dividend decrease if it continues long and deep enough.
Otherwise, he has a BUY rating.
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
I don't know how to answer questions like yours because I try very hard not to be a victim of price declines ---- and hopefully to exploit them. It's not like bondish CEFs' price trends are a mystery. What happened in '22-late '24 ? Fed raised rates at the most aggressive pace in decades ---- basically 0 % to 5.4%. ALL bond portfolio prices declined -- a lot. This was not a surprise. I cannot imagine just watching my net worth melt by just holding assets that made sense BEFORE Fed started raising rates.
What happened recently? The entire narrative about future rate structures changed. The relevant parts of the Treasury curve steepened, the outlook for Fed went from hold then ease twice in 2026 to hold then HIKE once in 2026. These things did not happen overnight. Anyone who took no action to reduce exposures simply wasn't or didn't wish to pay attention. Such behavior mystifies me.
When you can treat price declines as an opportunity, PAST price action means little. Multi-year total returns don't apply to MY CEF holdings. CEFs are great investments, but they are not buy and hold investments.
Regards, Dick
BuckeyesRC
Recycles dryer sheets
This tells you that investors thought GOF was too expensive in October. It doesn't really tell you anything about the fund's performance. Valuations matter when choosing entry points for a closed end fund.
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
And? It was a good idea to hold EGRIX and probably PIMIX. It was a bad idea to remain long GOF and PDI when they rolled over/threw multiple sell signals. How did total returns line up?
What now/next?
Regards, Dick
Many investors hold CEFs for years without selling.
PDI 1,3,5,10 years' performance isn't looking good compared to SPY or even allocation fund VWELX (Wellesley). 5 year chart (SharpCharts | StockCharts.com) and play with it for 1-10 years.
I have said many times that CEFs must be traded.
What's next?
PDI weekly MACD signal = sell
GOF weekly MACD signal = buy.
But, GOF daily signal = sell, see chart below.
PDI 1,3,5,10 years' performance isn't looking good compared to SPY or even allocation fund VWELX (Wellesley). 5 year chart (SharpCharts | StockCharts.com) and play with it for 1-10 years.
I have said many times that CEFs must be traded.
What's next?
PDI weekly MACD signal = sell
GOF weekly MACD signal = buy.
But, GOF daily signal = sell, see chart below.
PaulR888
Recycles dryer sheets
Hi Dick .... As a "buy and rebalancing holder" I did take the price hit in the past but my sole goal is the added yield to my portfolio. I only own bond CEFs (GOF and PTY) in 2 of my accounts and together they are about 5% of my total investments. They provide me almost $35K a year in income. They've both been around for over 20 years but if they are on a death spiral to implosion, it would be nice to know. I feel better after reading your post, but I'll monitor for any changes. Thanks Chief. (I was a Get Smart fan. I hope you don't mind me calling you Chief.) ... Paul
Just like in Shark Tank, I never had any mutual fund/ETF/CEF less than 10% per position. Most times, a lot more.
I appreciate this insight and investment thesis but always get stumped digging in the weeds trying to figure out which ROC is destructive versus intentionally intelligent tax planning.....and then realizing that even if I can find this information, I would have to revisit for every distribution unless the fund follows a particularly consistent distribution cadence..............so all that eventually means unless it is an incredibly unusual market misprice, I just avoid funds doing very much ROC, particularly those that sell at a premium
OP
OP
dickoncapecod
Thinks s/he gets paid by the post
Predictions sometimes get easy on high distribution CEFs. Monday morning, all else equal, GOF will open down 18c = 1.6%!! Just like PDI was down 22c Friday morning. My market behavior differs from momentum indicators --- which I also use ---- because for better or worse, I have a view regarding future policy/macro.
Regards, Dick
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PaulR888
Recycles dryer sheets
I only invest in Pimco or Guggenheim CEFs. Pimco speaks for itself. They are the premier bond CEF house. Guggenheim's GOF began with Scott Minerd and Anne Walsh and I have high respect for both and their processes that Scott put in place. Unfortunately, Scott passed away a couple of years ago. The fact that I can't dig into the weeds on ROC or any other part of the fund is ok with me.
PaulR888
Recycles dryer sheets
That's because you are 100% TR guy. I am a TR + Income guy. If I can generate $35K income with only 5% at risk, count me in. Do they invest in CEFs in Shark Tank?
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