Why I Still Believe in This 13%+ Yielding Income Fund

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I’ve noticed over the years that this closed-end fund has a way of dividing people, especially after the pandemic and when interest rates started increasing. Because there are some really good things about PDI, and there’s also some concerning things about this investment. On one hand, it’s currently offering a dividend yield of almost 13 and a half percent. On the other hand, its share price has gotten beaten up over the past five years. PDI has also never cut its dividend since its inception. But, it also holds some very risky investments inside of it. PDI also offers a really good DRIP discount, meaning that when you choose to reinvest your dividends, you actually get a 5% discount on all your shares.

But then according to PDI’s undistributed net interest income report, which shows how well covered its dividend payments are, this fund has been consistently coming up short for awhile. But it does pay a monthly dividend, which again has never been cut. Yet, PDI comes with a very high expense ratio, even by closed-end fund standards. Despite these things, PDI has continued to cover its monthly dividend, seemingly defying the odds at times. More recently this funds share price has been seeing a really good recovery. But again, on the negative side, it’s currently trading for a big premium compared to its historic performance. So you can see there’s a lot of great things, and concerning things about this closed end fund going on right now. Despite these things, I continue to hold this fund and I remain optimistic about its future. So in this video, we’ll look at the most recent developments with PDI and I’ll discuss why I hold this fund, and where I think it’ll eventually go in the future.