IMHO and those of others 42.5% leverage is highly leveraged. Maximum allowed is 50% as per the Investment Company Regulation act of 1940 and the median amount of leverage for cef's is about 33%. My post was to highlight the fact that in a financial downturn this leverage will still require payment on the debt ,which will cause increased shareholder loss. In addition ,losses will be magnified by the leverage with interest rate declines, especially in the longer maturity securities. The 26% of fund holdings in MBS in PDI is of the non agency variety ie subprime with higher yields. In a downturn when folks are running to the exits this fund will likely have liquidity issues/problems. I do own CEF's and know about the potential downsides. Sugarcoating PDI does not do it justice. PONDXPIMIX is a buy and hold fund and PDI is not, IMHO. I own PIMIX as a satellite fund in my portfolio and sleep well with it there

Great!
We've targeted 1 hour for each ... Wednesday, 16th at 3 pm eastern and Wednesday, 30 August at 11 am eastern.
Plan to cover same material in each session.
Happy to add one more session at later time on the 16th, say 8 pm eastern?
Will be hosting via Zoom, which chip recommends based on her good experiences with online classes. Requires no special software or equipment.
Just send me an email with preferred session to get an invite: [email protected] or send me message on the board.
c
PS. Will be attending Morningstar ETF conference in Chicago early next month, so happy to hook-up there as well and walk-through premium search tools in person.

Highly leveraged with a healthy high yield portfolio. When the bears start to run, those in it will be in a world of hurt. I will stick with my PIMIX/PONAX and sleep better.

Technically (and more from the top of my head than bc I am delving deep into their portfolio), PDI, PCI, and it's PIMCO CEF cousins are mostly NOT high yield funds. They make a lot of their return on smartly-purchased MBS, but also on swaps and derivatives that both hedge their portfolios to swings in interest rates and add to their returns. Look at the performance of their NAVs on days when interest rates rose.
As far as premiums go, think of PDI as the equivalent of a single bond. (I know I know it's not! Just work with me here....) Would you rather hold a bond that matures in, say, 10 years (I know PDI doesn't mature and return your full par value.....just an exercise), and pays 8% interest along the way (again, I know it's distribution is not fixed like a bond....), or would you rather own a bond with similar maturity that pays 4% interest along the way? Leaving out price of the bond. The yield-starved market is pricing these CEFs that earn 8-10% on their NAV, at premiums, that still allow an ~8.5% distribution (give or take a %) on current price. And yes, prices are volatile compared to their NAVs or to OEFs.
Just my thoughts. Currently hold PDI, PCI (bought later 2 just yesterday for a small account I help manage), PFN, PTY, PKO, for full disclosure. But I would also like to see their prices decline some so I can purchase more in various accounts. So talking them up defeats that purpose some ;)
Lastly, on the topic of "highly leveraged", is a fund that holds bonds picked by arguably the best bond-picking managers/team around presently, levered up 1.5-to-just-under-2 times, really a bad thing? Plus managed with "the full toolbox" available to bond managers today--hedges, swaps, derivatives, so dampen the effects of macro interest moves. mREITs are often levered up multiples of that and generally much less diversified in their holdings.
Finally, and yes, then I'll get off my proselytizing soapbox, for those who worry about asset gathering and forced redemptions, these CEFs do not deal with that, as success leads to investors purchasing the fund, driving up the premium perhaps. Conversely, sales do not force the managers to sell to meet redemptions. These are $1-2 billion-sized Ivascyn funds (best of ideas maybe? Or at least able to invest across the spectrum of holding sizes/availabilities). Imagine investing in PONDX/PIMIX when it was only this size.....

FYI: The stock market continues to reach new highs, with the bull market in its ninth year, yet individual investors, especially millennials, are not buying it.
Regards,
Ted
http://www.barrons.com/articles/why-wont-millennials-embrace-the-stock-market-1501533989?mg=prod/accounts-barrons

FYI: Study shows high returns from purchasing least crowded stocks.
Regards,
Ted
https://www.bloomberg.com/news/articles/2017-08-02/avoiding-the-crowd-is-a-good-bet-for-beating-the-stock-market

Hi @Old_Skeet
You noted: "but, let me ask a question. How much of the reflected outsized performance for the securities shown in the chart was the result of the FOMC's bond buying program? Generally, back then most bond yields fell as bond valutations increased. I'm thinking this performance would be hard to repeat again in the nearterm to midterm based upon current low bond yields."
>>>From the market melt in 2007/2008 through today; global central bank policies have indeed "perverted" returns in both equity and bond sectors. This perversion remains today. I have noted before (2009 FundAlarm) and still maintain that "this time is different". Consumer side economic damage took place during the market melt and many folks, IMO; have not fully recovered. For a very short list, the continued low interest rate policies from central banks and technology advances will maintain pressures going forward to determine the winners and losers in the equity and bond arenas.
While interest rates are indeed low and the potential for out sized returns likely no longer exists as related to the market melt returns; financial or political events would likely push up prices on investment grade bonds, being corporate and more so U.S. government issues.
While the current view of policies and politics, as viewed from outside the U.S., is likely not as favorable as with past administrations; future turmoil globally, be it economic or military will still find the large money buying the safety of U.S. treasury bond issues.
World Largest Economies, 2017
https://www.weforum.org/agenda/2017/03/worlds-biggest-economies-in-2017/
Yes, we live during interesting times, eh?
Regards,
Catch

@Old_Skeet
I don't know and can't predict whether large organizations and likely not individual investors would be selling "enough" bonds to meet margin calls. If equity markets are headed to the toilet, generally speaking; at least U.S. gov't. Treasury issues find favor which of course, translates into pricing increases (spell that profit trajectory).
Fidelity's cash account has a current 7 day yield of .68%. We'll stay with our current bond holdings of 98% corporate bonds for our "cash" position.
Chart: SPY versus LQD (corp. bds) versus IEF (Treasuries 7-10 year) versus EDV (extended duration government bonds). One may move the slider at either end to narrow the time frame for a closer look at a specific time period. This chart is from Dec. 13, 2007 through August 2, 2017.
http://stockcharts.com/freecharts/perf.php?SPY,LQD,IEF,EDV&n=2426&O=011000

@Sven, I got into PCI/PDI after reading Sam Lee's work at the Morningstar's ETF newsletter. On his blog Sam once noted PIMIX was PIMCO's best fund. That is when I added PIMIX/PONDX to my Mom's account. A little PCI for Mom as well since is was at a wider discount. It occupies part of the risk version of her account. Actually Sam Lee noted PIMIX behaved like a bond fund with a 10-15% stock sleeve so adjust accordingly. Will take a look at FSICX especially std dev.

Awhile back I switched from PTTRX to PIMIX in my 401(K). I also invested in EMB and BND.

Since late 2014 I have gradually reduced my risk by reinvesting dividends in a short term bond fund rather than the stock fund that produced them . It has hurt performance but helped my calmness. In the event the bear appears I will NOT buy the dip until its fairly large. i.e something like 4000 dow points but I probably won't do much selling o the way down..

FYI: A conversation on the global economy and the future of capitalism with Jeremy Grantham, chief investment strategist at GMO.
Regards,
Ted
http://ritholtz.com/2017/08/charlie-rose-jeremy-grantham-gmo/

Oaktree's HY fund has 2 share classes: Institutional (.95 ER / $1 mil. minimum) and Advisor (1.20 ER / $25,000 minimum). The .25 12 (b-1) fee (mentioned by rforno) applies only to the Advisor class and accounts for all of its higher ER. Neither class appears to be front loaded.
Not something I'd be interested in at this juncture. Agree with rforno the ER is high - but not extraordinarily so for some of these specialty funds. For comparison, Price charges a .75 ER for its (now closed) PRHYX.

If you're interested, you might look into RiverNorth/Oaktree High Income (RNOTX), which has a $5000 minimum and 1.7% expenses. It's the traditional RiverNorth model: a sub-adviser does their thing and RiverNorth supplements it with the CEF arbitrage strategy in the same asset class. It's been a mediocre performer so far, likely because the RiverNorth sleeve is expensive and only adds real value when markets are volatile, which hasn't been the case lately.
For what interest that holds,
David

M* has the minimum for their high yield fund at 25K. Not exactly chump change, and might even be lower at various brokers, but it's probably doable for many folks here. But the 1.20 ER and 12(b)-1 fee on the investor class turns me off.

His Oaktree Capital seems to specialize in distressed debt. I sense that they cater to very large and institutional investors. They have a high yield mutual fund - however I believe the minimum is quite high.

@JoJo: Yes, I believe cash is a portfolio 'position' (so to speak) but I don't consider cash as part of my portfolio return calculations. It's just an idle resource waiting to be used. But each to their own....

"If you're "nearly 100%" equities"
@JoJo26: That's not what he said. Read it again: "nearly 100% of my investments in equities". Obviously he does not consider his cash to be "invested"... a perfectly reasonable perspective.

But then the performance of your "investments" is not an accurate representation or apples to apples comparison to how it stacks up versus broader index performance... If you have cash that you'd actually deem as investible, then it should be a part of your portfolio, and be a boon in down markets and drag in up markets.

Perhaps the transport sector is not so relevant today, as with past theory, eh?
http://stockcharts.com/freecharts/perf.php?SPY,IYT&n=3477&O=011000

From David's Commentary - "(Howard Marks') premise here is that investors make the greatest and safest returns on their investment when they are prepared to do what others do not want to do. He posits a situation, analogous to what we see today, where too much money with too little fear is chasing risky investments since the alternative is unappealing ...".
-
Marks is an interesting bird. More impressive live (on Bloomberg) than in his writings, I think. I've been plodding through his The Most Important Thing on Audible. It's few hundred pages long, but with a tediously repetitious basic theme. That being: Adjust your risk appetite to market conditions. He's currently quite bearish. I enjoy the book, but listen mostly at bedtime and generally doze off after about 10 minutes.
His Oaktree Capital seems to specialize in distressed debt. I sense that they cater to very large and institutional investors. They have a high yield mutual fund - however I believe the minimum is quite high.

Some further thoughts:
https://www.washingtonpost.com/news/business/wp/2017/08/02/dow-jones-crosses-over-22000-for-first-time

Well ... If everyone buys, than the market won't go down. Will it?
---
Edit: The above was a quick shoot from the hip reaction to the thread. No intent to disparage anyone.
Truth is, you really don't know what you'll do until it happens. In '08 the picture was bleak. Hank Paulson, Treasury Secretary, was on TV trying to reassure a panicked public. Lehman Brothers - a giant financial institution - had crumpled in days. Money market funds, previously considered safe, were on the ropes and might well have collapsed without emergency government backing. As bad as it was here, international markets plummeted even more. I saw people who were retired and thought they were smart investors literally in tears after watching their retirement nest egg disintegrate 50% in a year's time.
There are options other than simple buy or sell. If you think the sell-off is overdone consider rotating out of conservative funds and into more aggressive ones at a slow and steady pace. Also, if your money is in Traditional IRAs, consider converting to a Roth while markets are depressed. Personally, I'm mostly buy and hold, but do adjust cash position upward or downward a bit as markets evolve (risk on/risk off). Generally, cash stays between 10% and 25% - so there's not a lot of leeway there to buy equities.
Just some rambling thoughts.

@johnN: Sorry, but you've hit on a sore spot with me. Unlike stock, where it it easy to get a quote the vast majority of bonds sell on the over the counter market at whatever price bond traders can get for them. A lot depends on how many individual bonds you want to buy, generally in $1,000 denomination, and their grade from junk to investment grade. When I buy bonds I make a bid and it is either excepted or rejected by the the bond house. I use Morgan Stanley who has the largest bond trading desk among the various brokerage houses, and since I'm a client I usually get a cheaper price if the bonds I want to buy a held in-house. If MS has to go on the street for what i want the price will generally be higher. The mark-up in bonds can be as high as 4%. Example, a bond a trader paid $960 might try sell at par, $1,000. Today I bought 18 HTZ 1/21 7.375% coupon 10 for $979.97 and 8 at $980.04
Regards,
Ted