The Board of Trustees (the “Board”) of PIMCO Dynamic Income
Strategy Fund (the “Fund”) (NYSE: PDX)1 has declared the next two
distributions for the Fund’s common shares, as summarized below. In
addition, the Board has approved a change in the Fund’s
distribution frequency, from quarterly to monthly, starting with
the April Distribution (as defined below).
A quarterly distribution for the Fund’s common
shares is payable on April 1, 2024 to shareholders of record on
March 11, 2024, with an ex-dividend date of March 8, 2024 (the
“March Distribution”). The March Distribution reflects an increase
of $0.040000 per common share as compared to the Fund’s prior
quarterly distribution that was paid on January 2, 2024 to
shareholders of record on December 11, 2023.
March Distribution Per
Common Share
Fund |
NYSE Symbol |
Amount |
Change From Previous Quarter |
Percentage Change From Previous Quarter |
PIMCO Dynamic Income Strategy Fund |
(NYSE: PDX) |
$0.260000 |
$0.040000 |
18.18% |
The Fund’s first monthly distribution is payable
on May 1, 2024 to shareholders of record on April 11, 2024, with an
ex-dividend date of April 10, 2024 (the “April Distribution”). As
noted above, starting with the April Distribution, the Fund intends
to make distributions monthly instead of quarterly.
April Distribution Per
Common Share
Fund |
NYSE Symbol |
Amount |
Hypothetical Change From March
Distribution2 |
Hypothetical Percentage Change From March
Distribution2 |
PIMCO Dynamic Income Strategy Fund |
(NYSE: PDX) |
$0.1133 |
$0.026633 |
30.73% |
Fund Distribution Information as of
January 31, 2024:
Fund |
NYSE Symbol |
March distribution |
Annualized March Distribution rate expressed as a
percentage of NAV as of 1/31/2024 |
Annualized March Distribution rate expressed as a
percentage of Market Price as of 1/31/2024 |
PIMCO Dynamic Income Strategy Fund |
(NYSE: PDX) |
$0.260000 |
4.62% |
5.38% |
Fund |
NYSE Symbol |
April distribution |
Annualized April Distribution rate expressed as a
percentage of NAV as of 1/31/2024 |
Annualized April Distribution rate expressed as a
percentage of Market Price as of 1/31/2024 |
PIMCO Dynamic Income Strategy Fund |
(NYSE: PDX) |
$0.1133 |
6.04% |
7.04% |
Distribution rates are not performance and are
calculated by annualizing the current distribution per share
announced in this press release and dividing by the net asset value
(“NAV”) or Market Price, as applicable, as of the reported date.
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’s distribution rate at a future time.
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.
Average Annual Total Returns Based on
NAV and Market Price (“MKT”) of Common Shares as of January 31,
2024:
Fund |
NYSE Symbol |
Inception Date |
|
1 Year |
5 Year |
Since Inception |
PIMCO Dynamic Income Strategy Fund |
(NYSE: PDX) |
2/01/2019 |
NAV |
26.56% |
9.82% |
9.82% |
MKT |
29.67% |
7.80% |
7.80% |
Performance for periods of more than one year is
annualized.
Past performance is not a guarantee or a
reliable indicator of future results. There can be no assurance
that the Fund or any investment strategy will achieve its
investment objectives or structure its investment portfolio as
anticipated. 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) of the Fund’s common shares
in the specific period. The calculation assumes that all dividends
and distributions, if any, have been reinvested. NAV and market
price returns do 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 are not annualized. Returns for a period of more than
one year represent 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.
Additional Information
Distributions may include ordinary income, net
capital gains and/or returns of capital. Generally, a return of
capital occurs when the amount distributed by the Fund includes a
portion of (or is comprised entirely of) your investment in the
Fund in addition to (or rather than) your pro-rata portion of the
Fund’s net income or capital gains. The Fund’s distributions in any
period may be more or less than the net return earned by the Fund
on its investments, and therefore should not be used as a measure
of performance or confused with “yield” or “income.” A return of
capital is not taxable; rather it reduces a shareholder’s tax basis
in his or her shares of the Fund.
If the Fund estimates that a portion of a
distribution may be comprised of amounts from sources other than
net investment income, as determined in accordance with its
internal accounting records and related accounting practices, the
Fund will notify shareholders of the estimated composition of such
distribution through a Section 19 Notice. For these purposes, the
Fund estimates the source or sources from which a distribution is
paid, to the close of the period as of which it is paid, in
reference to its internal accounting records and related accounting
practices. If, based on such accounting records and practices, it
is estimated that a particular distribution does not include
capital gains or paid-in surplus or other capital sources, a
Section 19 Notice generally would not be issued. It is important to
note that differences exist between the Fund’s daily internal
accounting records and practices, the Fund’s financial statements
presented in accordance with U.S. GAAP, and recordkeeping practices
under income tax regulations. For instance, the Fund’s internal
accounting records and practices may take into account, among other
factors, tax-related characteristics of certain sources of
distributions that differ from treatment under U.S. GAAP. Examples
of such differences may include, among others, the treatment of
paydowns on mortgage-backed securities purchased at a discount and
periodic payments under interest rate swap contracts. Accordingly,
among other consequences, 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 and/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 visit www.pimco.com for the most
recent Section 19 Notice, if applicable, and most recent
shareholder reports for additional information regarding the
estimated composition of distributions. Final determination of a
distribution’s tax character will be provided to shareholders when
such information is available.
The tax treatment and characterization of the
Fund’s distributions may vary significantly from time to time
because of the varied nature of the Fund’s investments. The Fund
may enter into opposite sides of multiple interest rate swaps or
other derivatives with respect to the same underlying reference
instrument (e.g., a 10-year U.S. treasury) that have different
effective dates with respect to interest accrual time periods also
for the principal purpose of generating distributable gains
(characterized as ordinary income for tax purposes) that are not
part of the Fund’s duration or yield curve management strategies.
In such a “paired swap transaction”, the Fund would generally enter
into one or more interest rate swap agreements whereby the Fund
agrees to make regular payments starting at the time the Fund
enters into the agreements equal to a floating interest rate in
return for payments equal to a fixed interest rate (the “initial
leg”). The Fund would also enter into one or more interest rate
swap agreements on the same underlying instrument, but take the
opposite position (i.e., in this example, the Fund would make
regular payments equal to a fixed interest rate in return for
receiving payments equal to a floating interest rate) with respect
to a contract whereby the payment obligations do not commence until
a date following the commencement of the initial leg (the “forward
leg”).
The Fund may engage in investment strategies,
including those that employ the use of derivatives, to, among
other things, seek to generate current, distributable income,
even if such strategies could potentially result in declines
in the Fund’s NAV. The Fund’s income and gain-generating
strategies, including certain derivatives strategies, may
generate current income and gains taxable as ordinary income
sufficient to support monthly distributions even in situations
when the Fund has experienced a decline in net assets due to,
for example, adverse changes in the broad U.S. or non-U.S.
equity markets or the Fund’s debt investments, or arising from
its use of derivatives. Because some or all of these
transactions may generate capital losses without
corresponding offsetting capital gains, portions of the Fund’s
distributions recognized as ordinary income for tax purposes
(such as from paired swap transactions) may be economically
similar to a taxable return of capital when
considered together with such capital losses. The tax
treatment of certain derivatives in which the Fund invests may
be unclear and thus subject to recharacterization. Any
recharacterization of payments made or received by the Fund
pursuant to derivatives potentially could affect the amount,
timing or character of Fund distributions. In addition, the
tax treatment of such investment strategies may be changed by
regulation or otherwise.
The common shares of the Fund trade on the New
York Stock Exchange. As with any stock, the price of the Fund’s
common shares will fluctuate with market conditions and other
factors. If you sell your common shares of the Fund, the price
received may be more or less than your original investment. Shares
of closed-end investment management companies, such as the Fund,
frequently trade at a discount from their net asset value and may
trade at a price that is less than the initial offering price
and/or the net asset value of such shares. Further, if the Fund’s
shares trade at a price that is more than the initial offering
price and/or the net asset value of such shares, including at a
substantial premium and/or for an extended period of time, 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.
The Fund may apply for an order granting an
exemption from Section 19(b) of the Investment Company Act of 1940
(the “1940 Act”) and Rule 19b-1 thereunder to permit the Fund to
include realized long-term capital gains as a part of its regular
distributions to common shareholders more frequently than would
otherwise be permitted by the 1940 Act (generally once per taxable
year). There is no assurance that the Securities and Exchange
Commission will grant the Fund’s request for such an exemptive
order if such a request is made. If the Fund were to receive the
exemptive order discussed above, the Fund may, but will not
necessarily, seek to pay distributions generally at a rate based on
a fixed percentage of the common shares’ net asset value at a
particular time (a “managed distribution policy”). Any such managed
distribution policy may be modified by the Board of Trustees of the
Fund from time to time. If the Fund were to seek to make
distributions under a managed distribution policy, it would
typically be intended to result in the payment of approximately the
same percentage of the Fund’s net asset value to common
shareholders each period.
The Fund’s daily New York Stock Exchange closing
market prices, net asset values per share, as well as other
information, including updated portfolio statistics and performance
are available at pimco.com/closedendfunds or by calling the Fund’s
shareholder servicing agent at (844) 33-PIMCO. Updated portfolio
holdings information about the Fund will be available approximately
15 calendar days after the Fund’s most recent fiscal quarter end,
and will remain accessible until the Fund files a shareholder
report or a publicly-available Form N-PORT for the period that
includes the date of the information.
The Fund’s shares do not represent a deposit or
obligation of, and are not guaranteed or endorsed by, any bank or
other insured depository institution, and are not insured by the
FDIC, the Federal Reserve Board or any other government agency. You
may lose money by investing in the Fund. Certain risks associated
with investing in the Fund are summarized below.
An investor should consider, among other
things, the Fund’s investment objectives, risks, charges and
expenses carefully before investing. The Fund’s annual report
contains (or will contain) this and other information about the
Fund.
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. Real estate investment trusts (or
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 master limited partnerships (or 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. Energy Sector
Risk. The Fund will be concentrated in the energy sector,
and will therefore be susceptible to adverse economic,
environmental, or regulatory occurrences affecting that sector.
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 Amended and Restated Agreement
and Declaration of Trust (the “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.
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
or call 1-844-337-4626.
About PIMCO
PIMCO was founded in 1971 in Newport Beach,
California and is one of the world’s premier fixed income
investment managers. Today we have offices across the globe and
3,000+ professionals united by a single purpose: creating
opportunities for investors in every environment. PIMCO is owned by
Allianz S.E., a leading global diversified financial services
provider.
Except for the historical information and
discussions contained herein, statements contained in this news
release constitute forward-looking statements. These statements may
involve a number of risks, uncertainties and other factors that
could cause actual results to differ materially, including the
performance of financial markets, the investment performance of
PIMCO's sponsored investment products and separately managed
accounts, general economic conditions, future acquisitions,
competitive conditions and government regulations, including
changes in tax laws. Readers should carefully consider such
factors. Further, such forward-looking statements speak only on the
date at which such statements are made. PIMCO undertakes no
obligation to update any forward-looking statements to reflect
events or circumstances after the date of such statement.
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 L.P. in the United States and
throughout the world. ©2024, PIMCO
For information on PIMCO Closed-End
Funds:Financial Advisors: (800) 628-1237Shareholders: (844)
337-4626 or (844) 33-PIMCOPIMCO Media Relations: (212) 597-1054
1 Prior to November 21, 2023, PIMCO Dynamic
Income Strategy Fund (NYSE: PDX) was named PIMCO Energy and
Tactical Credit Opportunities Fund (NYSE: NRGX).2 Based on amounts
per common share for the March Distribution calculated as if the
March Distribution had been paid monthly instead of quarterly. As
noted above, the April Distribution will be the first monthly
distribution by the Fund. In order to show the amount and
percentage change of the April Distribution relative to the March
Distribution, a monthly amount per common share for the March
Distribution has been calculated by dividing the March Distribution
by three.
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