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UNII Report

Dynamic Income Strategy Fund

PDX

Updated December 05, 2023

UNII Report

Objective

The Fund seeks current income as a primary objective and capital appreciation as a secondary objective.

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Overview

Important Notice Regarding the Fund: Effective November 21, 2023, the PIMCO Energy and Tactical Credit Opportunities Fund changed its name, ticker symbol, investment objectives and guidelines, portfolio manager lineup, and made other changes. PIMCO expects that these changes will reduce the fund’s focus on investments linked to the energy sector in favor of a primarily income-oriented objective and broader, multi-sector credit mandate. For more information, click here.

PRESS RELEASES

Fund Overview

The fund utilizes an opportunistic approach to pursue high conviction income-generating ideas across global credit markets to seek current income as a primary objective and capital appreciation as a secondary objective.

In managing the fund, PIMCO will employ an active approach to allocation among multiple fixed income sectors based on, among other things, market conditions, valuation assessments, economic outlook, credit market trends and other economic factors. With PIMCO’s macroeconomic analysis as the basis for top-down investment decisions, including geographic and credit sector emphasis, PIMCO will manage the fund with a focus on seeking income generating investment ideas across fixed income sectors, including opportunities in developed and multiple emerging global credit markets. PIMCO may choose to focus on particular countries/regions, asset classes, industries and sectors to the exclusion of others at any time and from time to time based on market conditions and other factors. The relative value assessment within fixed income sectors will draw on PIMCO’s regional and sector specialist insights. As a matter of fundamental policy, the fund normally invests at least 25% of its total assets (i.e., concentrates) in the energy industry. PIMCO will, on behalf of the fund, make reasonable determinations as to the appropriate industry classification to assign to each security or instrument in which the fund invests.

The fund seeks to achieve its investment objectives by utilizing a dynamic asset allocation strategy among multiple sectors in the global public and private credit markets, including corporate debt, mortgage-related and other asset-backed instruments, government and sovereign debt, taxable municipal bonds and other fixed-, variable- and floating-rate income-producing securities of U.S. and foreign issuers, including emerging market issuers and real estate-related investments. The fund may invest without limitation in investment grade debt securities and below investment grade debt securities (commonly referred to as “high yield” securities or “junk bonds”), including securities of stressed, distressed or defaulted issuers. The fund may also invest without limit in common stocks and other common equity securities issued by public or private issuers.

PIMCO has been actively managing income-producing securities since the firm’s founding in 1971. Our innovative investment process is designed to add value for clients by marrying a top-down, global macroeconomic outlook with bottom-up analysis from one of the industry’s most experienced research teams.

ASSET CLASS
  • Multi Asset
  • Real Asset
  • Equities
  • US Large Equity
CUSIP

69346N107

IPO Market Price

$20.00

IPO NAV

$20.00

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Managers

John M. Devir

Portfolio Manager

View Profile for John M. Devir

Greg E. Sharenow

Portfolio Manager, Commodities and Real Assets

View Profile for Greg E. Sharenow

Mark R. Kiesel

CIO Global Credit

View Profile for Mark R. Kiesel

Daniel J. Ivascyn

Group Chief Investment Officer

View Profile for Daniel J. Ivascyn

Alfred T. Murata

Portfolio Manager, Mortgage Credit

View Profile for Alfred T. Murata

Giang Bui

Portfolio Manager, Securitized Debt

View Profile for Giang Bui

Distributions

Historical Prices & Distributions

Quarterly Distribution Rates

as of 09/30/2023
Quarterly NAV Distribution Rate 3.96%
Quarterly Market Price Distribution Rate 4.44%

Distributions

Latest Distribution ($ / Share) as of 09/08/2023 $0.220000
Distribution (YTD)1 as of 09/08/2023 $0.660000

disclosures

1Data is based on distributions since the most recent calendar year end and does not include special cash dividends.
Distribution rates are not performance and are calculated by annualizing the most recent distribution per share and dividing by the NAV or Market Price as of the reported date. Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital (ROC) of your investment in the fund. Because the distribution rate may include a ROC, it should not be confused with yield or income. A negative value for Undistributed Net Investment Income represents the potential for a ROC on an estimated tax basis. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the composition of distributions. Final determination of a distribution’s tax character will be made on Form 1099 DIV sent to shareholders each January.

It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the fund may not issue a Section 19 Notice in situations where the fund’s financial statements prepared later and in accordance with U.S. GAAP or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please see the fund’s most recent shareholder report for more details.

Fees & Expenses

Management Fee2 1.25%
Total Expense Ratio (excluding interest expense)3 2.08%
Total Expense Ratio (including interest expense)3 6.41%

disclosures

2The Management Fee is stated as a percentage of applied to the Fund's total managed assets. Total managed assets includes total assets of the fund (including assets attributable to any reverse repurchase agreements, dollar rolls, borrowings and preferred shares that may be outstanding) minus accrued liabilities (other than liabilities representing reverse repurchase agreements, dollar rolls and borrowings). By way of clarification, with respect to any reverse repurchase agreement or similar transaction, “total managed assets” includes any proceeds from the sale of an asset of the fund to a counterparty in such a transaction, in addition to the value of the underlying asset as of the relevant measuring date. In addition, for purposes of calculating “total managed assets,” the fund’s derivative investments will be valued based on their market value. Effective December 1, 2023, the Fund’s contractual management fee rate decreased from an annualized rate of 1.35% to 1.25% of the Fund’s average daily total managed assets.
3Expense ratios are calculated as a percentage of common share net assets. Total expense ratio (excluding interest expense) excludes certain investment expenses, such as expenses from borrowings and repurchase agreements, any dividends and other costs paid on preferred shares issued by the Fund, and dividend expenses from investments on short sales. The Total Expense Ratios have been adjusted to reflect the lower Management Fee rate described in note 2 above and higher anticipated levels of leverage, total managed assets and related expenses attributable to common shares following changes to the Fund’s investment objectives, certain non-fundamental investment guidelines and principal investment strategies described under “Important Notice Regarding the Fund” above.

Prices & Performance

Daily Statistics

All data as of 12/05/2023

NAV $23.22 Market Price $20.38
Daily Change $-0.23 Daily Change $0.02
One Day Return -0.98% One Day Return 0.10%
Premium / Discount -12.23%

All data as of

All data as of

Click here to view the Price and Performance for all Closed-End Funds

Calendar Year Returns %

All data as of

Fund Pricing

(Since Inception) All data as of 12/05/2023

High/Low Ranges - One Year

All data as of 12/05/2023

High/Low NAV $23.52/$16.44
High/Low Market Price $20.58/$13.66

disclosures

Past performance is not a guarantee or a reliable indicator of future results. An investment in the fund involves risk, including loss of principal. Investment return and the value of shares will fluctuate. Shares may be worth more or less than original purchase price. Due to market volatility, current performance may be lower or higher than average annual returns shown. Returns are calculated by determining the percentage change in NAV or market price (as applicable) in the specific period. The calculation assumes that all dividends and distributions, if any, have been reinvested. NAV and market price returns does not reflect broker sales charges or commissions in connection with the purchase or sales of Fund shares and includes the effect of any expense reductions. Returns for a period of less than one year is not annualized. Returns for a period of more than one year represents the average annual return. Performance at market price will differ from results at NAV. Although market price returns typically reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the fund, market conditions, supply and demand for the fund’s shares or changes in fund dividends and distributions.
Daily YTD return is from the most recent calendar year end.

Portfolio Composition

All data as of unless otherwise stated

Top Industry Sectors
Market Value %

Pipelines 57.68
Independent E&P 9.79
Integrated Oil 1.64
Wirelines 1.40
Oilfield Services 0.86
Consumer Products 0.82
Refining 0.41
Electric Utility 0.36
Healthcare 0.32
Transportation Services 0.30

Maturity %

0-1 yrs 25.04
1-3 yrs 0.90
3-5 yrs 22.69
5-10 yrs 9.10
10-20 yrs 41.98
20+ yrs 0.30
Effective Maturity (yrs) 3.33

Duration in Years

Total Leveraged-Adjusted Effective Durations (yrs.) 0.78

Sector Allocation %4

MV % DWE %
US Government Related5 20.16 1.75
Equity 65.72 -0.04
High Yield Credit 9.68 65.41
Emerging Markets6 0.00 0.00
Invest. Grade Credit 2.58 32.88
Commodities 1.70 0.01
Other7 0.56 0.00
Net Other Short Duration Instruments8 -0.40 -0.01

Top Countries %9

MV% DWE%
United States 97.40 85.39
Cayman Islands 2.26 0.01
Canada 0.91 5.87
Norway 0.39 2.95
Denmark 0.37 -0.11

disclosures

4For information as of October 31, 2015 and hereafter, the Sector Allocation MV% shown reflects exposures gained through the use of interest rate swaps at the market value of the swaps. Such exposures were reflected at the notional amount of the swaps for prior periods. As a result, this change may have the effect of reflecting lower exposures for one or more sectors and correspondingly higher exposures for other sectors than has or would be shown using the prior method.
5May include nominal and inflation-protected Treasuries, Treasury futures and options, agencies, FDIC-guaranteed and government-guaranteed corporate securities, and interest rate swaps.
6Short duration emerging markets instruments includes an emerging market security or other instrument economically tied to an emerging market country by country of risk with an effective duration less than one year and rated investment grade or higher or if unrated, determined to be similar quality by PIMCO. Emerging Markets includes the value of short duration emerging markets instruments previously reported in another category.
7May include convertibles, preferreds, and yankee bonds.
8Net Other Short Duration Instruments includes securities and other instruments (except instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives (for example Eurodollar futures) and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position which in certain instances may exceed the actual amount owed on such positions.
9By country of issuer, sorted by gross market value.
Duration is a measure of the fund's price sensitivity to changes in interest rates expressed in years.
Total Leverage -Adjusted Duration represents the Fund’s effective portfolio duration taking into account its use of leverage, including both portfolio leverage (e.g., reverse repos, credit default swaps, and tender option bonds), and any structural leverage, such as auction-rate preferred shares, if any, issued by the Fund. Effective duration is the duration for a bond with an embedded option when the value is calculated to include the expected change in cash flow caused by the option as interest rates change.

Assets & Leverage

All data as of 10/31/2023 unless otherwise stated

Assets (in millions)

Common Net Assets $994
Outstanding Preferred Shares $0
Total Managed Assets10 $1,113

Leverage

% of Total Managed Assets % of Common Net Assets
Total Effective Leverage 10.63 11.90
Preferred Shares11 0.00 0.00
Reverse Repurchase Agreements12 10.63 11.90
Floating Rate Notes Issued13 0.00 0.00
Credit Default Swaps14 0.00 0.00

disclosures

10Total Managed Assets include Net Assets Applicable to Common Shareholders ("Common Net Assets") + Preferred Shares + Reverse Repurchase Agreements + Credit Default Swaps + Floating Rate Notes Issued in Tender Option Bond ("TOB") transactions, as applicable. In TOB transactions, a fund sells a fixed rate municipal bond to a broker who places that bond in a Special Purpose Trust from which Floating Rate Notes and Inverse Floaters are issued.
11Preferred Shares (%) consists of Preferred Shares divided by Total Managed Assets.
12Reverse Repurchase Agreements (%) consists of Reverse Repurchase Agreements divided by Total Managed Assets.
13Floating Rate Notes Issued (%) consists of Floating Rate Notes Issued in transactions divided by Total Managed Assets. In TOB transactions, a fund sells a fixed rate municipal bond to a broker who places that bond in a Special Purpose Trust from which Floating Rate Notes and Inverse Floaters are issued.
14Credit Default Swaps (“CDS”) (%) consists of the aggregate notional amount of sell protection CDS plus the net market value of buy protection CDS, as applicable, divided by Total Managed Assets.
Past performance is no guarantee of future results. Investing in securities entails risk, including possible loss of principal. The use of leverage may cause a Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. The use of leverage may cause a Fund to be more volatile, which may increase the risk of investment loss.

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Disclosures

A word about risk: Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. Investing in foreign-denominated and/or -domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Corporate debt securities are subject to the risk of the issuer’s inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to factors such as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity. Collateralized Loan Obligations (CLOs) may involve a high degree of risk and are intended for sale to qualified investors only. Investors may lose some or all of the investment and there may be periods where no cash flow distributions are received. CLOs are exposed to risks such as credit, default, liquidity, management, volatility, interest rate and credit risk. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. REITs are subject to risk, such as poor performance by the manager, adverse changes to tax laws or failure to qualify for tax-free pass-through of income. Residential or commercial mortgage loans and commercial real estate debt are subject to risks that include prepayment, delinquency, foreclosure, risks of loss, servicing risks and adverse regulatory developments, which risks may be heightened in the case of non-performing loans. Investing in distressed loans and bankrupt companies is speculative and the repayment of default obligations contains significant uncertainties. Distressed and Defaulted Securities involve substantial risks, including the risk of default. Such investments may be in default at the time of investment. In addition, these securities may fluctuate more in price, and are typically less liquid. Commodities contain heightened risk, including market, political, regulatory and natural conditions, and may not be appropriate for all investors. Many energy sector MLPs and other companies in which the fund may invest operate natural gas, natural gas liquids, crude oil, refined products, coal, or other facilities within the energy sector and will be susceptible to adverse economic, environmental, or regulatory occurrences affecting the sector including sharp decreases in crude oil or natural gas prices. Private credit involves an investment in non-publicly traded securities which may be subject to illiquidity risk. Portfolios that invest in private credit may be leveraged and may engage in speculative investment practices that increase the risk of investment loss. Leveraging transactions, including borrowing, typically will cause a portfolio to be more volatile than if the portfolio had not been leveraged. Leveraging transactions typically involve expenses, which could exceed the rate of return on investments purchased by a fund with such leverage and reduce fund returns.  The use of leverage may cause a portfolio to liquidate positions when it may not be advantageous to do so.  Leveraging transactions may increase a fund’s duration and sensitivity to interest rate movements. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested.


Limited Term Risk. Unless the limited term provision of the fund’s Declaration of Trust is amended by shareholders in accordance with the Declaration of Trust, or unless the fund completes a tender offer, as of a date within twelve months preceding the Dissolution Date (as defined below), to all common shareholders to purchase 100% of the then outstanding common shares of the fund at a price equal to the NAV per common share on the expiration date of the tender offer (an “Eligible Tender Offer”), and converts to perpetual existence, the fund will terminate on or about January 29, 2031 (the “Dissolution Date”). The fund is not a “target term” fund whose investment objective is to return its original net asset value on the Dissolution Date or in an Eligible Tender Offer. Because the assets of the fund will be liquidated in connection with the dissolution, the fund will incur transaction costs in connection with dispositions of portfolio securities. The fund does not limit its investments to securities having a maturity date prior to the Dissolution Date and may be required to sell portfolio securities when it otherwise would not, including at times when market conditions are not favorable, which may cause the fund to lose money. In particular, the fund’s portfolio may still have large exposures to illiquid securities as the Dissolution Date approaches, and losses due to portfolio liquidation may be significant. Beginning one year before the Dissolution Date (the “Wind-Down Period”) the fund may begin liquidating all or a portion of the fund’s portfolio, and the fund may deviate from its investment strategy and may not achieve its investment objectives. As a result, during the Wind-Down Period, the fund’s distributions may decrease, and such distributions may include a return of capital. The fund’s investment objectives and policies are not designed to seek to return investors’ original investment upon termination of the fund, and investors may receive more or less than their original investment upon termination of the fund. As the assets of the fund will be liquidated in connection with its termination, the fund may be required to sell portfolio securities when it otherwise would not, including at times when market conditions are not favorable, which may cause the fund to lose money.

 
As with any stock, the price of the fund’s common shares will fluctuate with market conditions and other factors. Shares of closed-end management investment companies frequently trade at a price that is less than (a “discount”) or more than (a “premium”) from their net asset value. If the fund’s shares trade at a premium to net asset value, there is no assurance that any such premium will be sustained for any period of time and will not decrease, or that the shares will not trade at a discount to net asset value thereafter. Additionally, the fund's distribution rate may be affected by numerous factors, including changes in realized and projected market returns, fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the fund distribution rate at a future time.

The information relating to the Fund presented on this website has not been audited and may be calculated and presented differently from similar information (such as representations of portfolio composition, assets and leverage and other data) included in the Fund's shareholder reports and other sources.
Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering, shares are sold on the open market through a stock exchange. Closed-end funds may be leveraged and carry various risks depending upon the underlying assets owned by a fund. Investment policies, management fees and other matters of interest to prospective investors may be found in each closed-end fund annual and semi-annual report. For additional information, please contact your investment professional. For additional information, contact your financial advisor or call 1-844-337-4626.
This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world.
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PIMCO Investments LLC, 1633 Broadway, New York, NY 10019, is a company of PIMCO.
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