Hard to judge the price since it had a rights offering last year. Rising rates may indeed buoy the income, but a leveraged fund that will intentionally erode its NAV and dilute shareholder value is not a safe place to put capital in an unknown rate environment.
My investment in it is more current and I am up in the position. I like it from here. Nothing in my portfolio is forever. I am active investor, long timers here know that.
For my trade not to work, you'll need to convince 98+% of investors who just see a 12+% yield on a floating rate product that protects them from rising rates. You are correct of course, but it doesn't matter.
You might like what Dan Ivascyn has been saying lately, Energy Shocks, Rising Yields, and the Case for Bonds (Video) | PIMCO.
I too bought some, for a fraction less. $13.40 was a bid; the spreads on this one, at least for the past couple days, have frequently been 3-4 cents. My first purchase was yesterday, towards the close. I also bought some PDI the day before.
NII doesn't tell the whole picture for GOF since it has inflows from other sources, including share issuance, equity strategies, and derivatives. AI is probably just scraping garbage answers without nuance from Reddit.
AND his "buddy" learned nothing at all by asking a machine to summarize scraping from the web, where (even if long running) authors 1) don't understand the complexities of CEFs and 2) draw the most eyeballs with fear-inducing / negative "anal yses."
At 3/31, the Fed funds futures curve was inverted --- now it is predicting rate hikes. Times change. However, MOST PIMCO products are heavily allocated to floating rate MBS, ABS and bank loans.
So, this implies that FR components may offset rate sensitive components to some degree?
Thanks for the video. Dick has corrected my conclusion on floating rates by pointing me to also non-agency mortgages and ABS in addition to bank loans if I want to count the total floating rate asset class. I also see IG Credit is only 5-6% in the 2 bond funds I mentioned. I believe it is safe to say IG Credit is not a hopping value these days for these active managers. Although Ivascyn mentioned there is great value in the bond market, he did say you have to be selective with good bottoms up analysis. I assume they did that for the OBDC bond you mentioned.
Hi. I think you're treating the portfolio AND NAV as relatively static. The NAV the market price ultimately converges to might be $7 or $14 if rate structures change dramatically. Also, most term CEFs reduce maturities and durations AND consequently DISTRIBUTIONS as "end date"" approaches ---- to avoid much deviation from the then-current NAV.
Right. Most of the busted 2007-2009 vintage MBS structures lost their ratings --- and since nobody was marketing them, there was nobody to pay for a new rating. The true junk burned off/defaulted fast and a lot had to be eaten by the Agencies because they were non-compliant with terms. NOW, what's left of these assets are supported by pools of seasoned mortgage loans on homes that have doubled+ in value. These loans don't default because the borrower is deep in the money on the collateral. Not to mention the fact that floating rate bank loans are not rated because they are not bonds.
That definitely clarifies things for me, and I suspect others too.
I google things all the time. The google results that I get are at times, just plain amazing.
Coincidentally, I just finished listening to a long interview of Mike Piper by Paul Merriman. In the Q&A in the last 10 minutes of the interview, Mike shared an experience. He uses Claude AI and has found it highly reliable but not perfect. One example he gave was he posed a tax question to Claude and had some back and forth discussions with it. At one point, Claude responded with a quote (using quotation marks) from the One Big Beautiful Bill. The quote looked and sounded like something in the Bill but problem is Mike went back to read the Bill and the quoted language was NOT THERE. Claude was clever enough to learn the language style of the Bill and then make something up and put it in quotes as correct and definitive, but it wasn't. Hmmmmm
That is a significant amount of CEF/ETF. I did not look up every name to see composition. Are you buy/hold? Just ride out the rough patches? Or do you sell assets if rates rise?
That's why I switched to Brave search years ago and I use the Brave browser.
And I use Duck Duck Go. Google never.
