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Participant ○○○

Another thread on PIMIX again :)

I see that PIMIX paid a lofty and monstrous dividend of 0.0555 *again*. How are they able to do it even when the interest rates are at 0 - 0.25%?  I know the bonds that they hold might have a longer duration which buffers some of the dividend but the consistency baffles me.

I know the infamous saying: "If it's too good to be true, it truly is"... But, PIMIX is defying all logic. Granted NAV lost about 7% or so but the dividend is rock solid.

Anyone know what Pimco is cooking?

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Frequent Contributor

Re: Another thread on PIMIX again :)

Maybe not a complete answer but other funds with heavy securitized and lower rated bonds also have high yield...IOFIX,DPFNX 6+%...VCFAX 5+%

PIMIX also has HY+EM and both have yield > 5%

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Follower ○○

Re: Another thread on PIMIX again :)

I am curious the same, I recently sold a large holding for loss harvest and am looking to buy back, after my 30 day wash. Also, expecting the current rally to fade and perhaps implode which will drive PIMIX NAV even lower. Just don't see how it can continue unless the fed is buying up the bonds in the background... 

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Explorer ○○○

Re: Another thread on PIMIX again :)

I bght. PIMIX late summer of 2008 I think they lost about 7-8% at full yr. have been happy for almost 12 yrs. always looking for something as good as or better than PIMCO, have alot of their Cef's, they stumble once in a while but seem to get back on track quickly.     TERRY

 

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Participant ○○○

Re: Another thread on PIMIX again :)


@RainGater wrote:

I see that PIMIX paid a lofty and monstrous dividend of 0.555 *again*. How are they able to do it even when the interest rates are at 0 - 0.25%?  I know the bonds that they hold might have a longer duration which buffers some of the dividend but the consistency baffles me.

I know the infamous saying: "If it's too good to be true, it truly is"... But, PIMIX is defying all logic. Granted NAV lost about 7% or so but the dividend is rock solid.

Anyone know what Pimco is cooking?


They maintain short duration, not long.  You're referring to the overnight borrowing rate maintained by the Fed which affects your money market deposit rate.  It doesn't affect the market rates that are paid on mortgages, loans, sovereign debt, high yield, or, currently even investment grade corporates that are part of the PIMIX universe.  They get income from credit exposure, not duration.

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Participant ○○○

Re: Another thread on PIMIX again :)


@JRinNY wrote:
They maintain short duration, not long.  You're referring to the overnight borrowing rate maintained by the Fed which affects your money market deposit rate.  It doesn't affect the market rates that are paid on mortgages, loans, sovereign debt, high yield, or, currently even investment grade corporates that are part of the PIMIX universe.  They get income from credit exposure, not duration.

I see that their effective duration is 0.77 years. I thought it was 2 - 3 years as I recall seeing it, maybe last year? If the duration is shorter, the future income should be drastically lower than what they are paying now. Defaults on mortgage payments, high yield debt rollovers, and refinancing by home owners have to dent the income. 

But, PIMIX withstands it as if it's no big deal. Maybe, we will know the true story after couple of months as the massacre happened in March and by July/August, if PIMIX still pays the same dividend, then all kudos to their management for standing by their motto - income - their primary focus as long as they don't return the capital as part of their income. ;)

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Participant ○○

Re: Another thread on PIMIX again :)

Div is .0555 not .555...wish it was .555  :^) :^)

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