PDLI owns a diversified portfolio of fixed income investments. 44% mortgages, 19% government, 15% corporate and a fairly large cash position (20%). Geographic exposure is 54% US, 6% UK, 6% Japan and a mix of other countries. 26% is one year maturities or less, 37% is less than five year maturities. The biggest driver is interest rates and economic conditions. If rates fall, its holdings should do well. In a recession, its corporate holdings could do less-well, however. The biggest risk would be a big uptick in inflation and interest rates. The ETF lost 5.9% in 2022 when this occurred. Its three year return, though, is still 5.82% when interest is included. With rates moving lower in many countries, we would expect decent performance (5% or so) going forward and we would be comfortable buying this.
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