"PDBC does not hold commodities directly or collect dividends from operating companies. It buys and rolls futures contracts on 14 heavily traded commodities, with heavy weighting toward crude oil, gasoline, and natural gas, alongside metals and agriculture."
"The distribution record makes the variability obvious. PDBC pays once a year, in December, and the amount swings with commodity performance: A payout that ranged from essentially zero in 2020 to over $7 combined in 2021 is a residual, swinging with commodity performance rather than reflecting any contractual obligation."
PDBC is designed to provide a tax-efficient investment in commodities without direct holdings. It generates income through futures contracts on 14 commodities, primarily crude oil and natural gas, with cash collateral earning interest. Distributions come from interest on collateral and realized gains from futures. The payout varies significantly, reflecting commodity performance, and is not guaranteed. Investors should consider distributions as variable bonuses rather than a reliable income stream, as evidenced by past fluctuations in payouts.
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