PIMCO Dynamic Income Fund (PDI) Educational Report

What this ETF is trying to do

The PIMCO Dynamic Income Fund (PDI) is an ETF traded on the NYSE. While the specific investment strategy is not detailed in the provided data, this fund is categorized as an asset type that focuses on providing regular distributions to investors.

What the numbers show

When looking at PDI, it is important to distinguish between "price return" and "total return." Price return only tracks the change in the share price. Total return includes both the share price changes and the money paid out through distributions.

• Year-to-Date (YTD): The price return is approximately -21.74%. However, the YTD total return is -12.03%.

• One Year: The one-year price return is approximately -29.79%, while the one-year total return is approximately -18.21%.

• Three Year: The three-year price return is approximately -20.80%. Interestingly, the three-year total return is positive at approximately 21.93%.

To visualize the price change, the estimated price from roughly one year ago was $19.74. The current price is $13.86.

Income and distribution explanation

PDI has a high distribution yield of approximately 19.09%. This means the fund pays out a large amount of cash relative to its share price. These distributions are usually paid monthly, with 12 payments recorded over the last year. Most of these payments have occurred on Thursdays.

It is important to remember that a high distribution yield does not guarantee that an investor will earn that percentage as a total return. High yields can sometimes be accompanied by a falling share price.

NAV erosion explanation

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion.

However, the data does show significant price-based trends. The fund has a "significant" erosion-risk severity and an erosion score of 30, which is labeled as "Significant price erosion." Because of these factors, the fund has triggered a severe erosion-risk flag. This flag means that the split-adjusted price trend and the erosion score have reached levels that indicate substantial price deterioration.

Pros

• The fund provides a high distribution yield of approximately 19.09%.

• Over a three-year period, the total return (which includes distributions) was positive at approximately 21.93%, even though the share price declined.

Cons

• The fund shows significant price erosion.

• There is a severe erosion-risk flag due to the declining share price.

• The one-year and year-to-date price returns are both negative.

Beginner takeaway

PDI is a fund that offers high monthly cash distributions, but those payments have been accompanied by a decline in the share price. While the total return over three years was positive, the recent price trends show significant deterioration and have triggered a severe erosion-risk warning. Investors should remember that high yields can exist even when the share price is falling.