PDO Vs. PDI: Hold PDO Amid U.S. Credit Rating Downgrade

  • Recent U.S. credit rating downgrades have driven up long-term treasury rates, impacting risk/return for income-oriented CEFs like PDO and PDI. PDI faces significant headwinds due to its high duration-adjusted exposure to long-term U.S. government bonds. I expected PDO to be impacted, though in a smaller and less direct way.