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PIMCO Income D (PONDX) Message Board

  • clidinho1 clidinho1 Aug 25, 2013 5:03 PM Flag

    Price Drop Rationale

    Need a bit of help understanding the 6% drop (12.83 to 12.07/sh). The fund duration is 3.7 years, hence, my expectations were that for each 1% rise in interest rate we would see 3.7% decline in NAV. We haven't seen the 1% rise in rates yet, but have already incurred 6% drop in NAV. What other dynamics are out there setting this fund NAV? Thanks in advance.

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    • Since early May 10 years treasury has risen 1% and mortgage rate also was up more than 1%. PONDX has 52% mortgage in its portfolio according to Pimco's website, this is the reason for that 6% drop of its NAV. Interest rates are going up when the Fed is only talking about slowing down bond buying, Watch out when Fed starts implement it.

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