I bought PCI on Friday.
music selection: “Down Boy” — Yeah Yeah Yeahs
weigh-in: 216.0 (3.2)
High yield and fixed income are a critical part of my strategy. The options part of the strategy can be thought of as “short volatility”. To balance that out (proper diversification) I need low Beta components of the portfolio. I also need a steady current income in early retirement and monthly paying debt instruments fit the bill.
PIMCO Dynamic Credit Income Fund (PCI) is a closed end fund invested in a mix of debt instruments. It has an average credit rating of Investment Grade. Versus the trailing twelve months of distributions, it yields 11.42% and pays monthly. I like this one a lot because Bill Gross (the “bond king”) is a major holder of shares and the advisors also own shares for their personal portfolios. These guys are eating their own cooking. Importantly, the fund is trading for a little better than 5% discount to NAV. I am getting a dollar’s worth of assets for only 95 cents.
I bought this with cash from checking into the Wells Fargo brokerage. So it represents a reduction in cash withdrawn from portfolio. I’ll update my withdrawal rate at next transparency post accordingly.
Devour your prey raptors!