Often an income-investor favorite, 2021 continues to be an interesting year for PIMCO’s lineup of big-distribution, monthly-pay, fixed-income CEFs. We’ve seen the launch of a new winner, a distribution cut from a perennial favorite, and now an imminent merger and sharply declining premiums for three classic PIMCO funds. In this report, we focus on one in particular, its 10.1% monthly distribution and its significantly shrinking price premium (versus NAV) as the big merger looms imminent. And regarding its once large premium, it is our opinion, as Arnold Schwarzenegger’s Terminator character once said, I’ll be back! We conclude with some important takeaways on who might want to invest and how.
PIMCO's Big-Yield CEFs: Cracks in the Dam? (PCI) (PDI) (PKO)
Income-hungry investors flock to PIMCO’s fixed-income closed-end funds for multiple reasons, including the big yields (often in excess of 9.0%), monthly payments, and sometimes even the ridiculously low prices (as we wrote about here and here). And while some investors are reassured by PIMCO’s track record of no distribution cuts in several of their most popular funds (for example (PDI), (PCI) and (PKO)), there is a lot more going on under the hood, and the recently proposed merger between these funds could be a little window dressing by the firm as the track of no distribution cuts may be in jeopardy. In this report, we pull back the curtains on these funds to reveal a little bit about how the sausage is made, and then conclude with our opinion on whether they still make for good investments, or if it is time to move on to new opportunities.
2 High-Yield CEFs Worth Owning: Contrarian Value Edition
Helicopter Fed: Top 10 mREITs and Bond CEFs (Huge Yields, Discounted Prices)
This article shares our Top 10 compelling mREITs and Bond CEFs. They trade at significant discounts to their book values and are being supported, to varying degrees, by the actions of the US Fed. The Fed is pumping an unlimited amount of liquidity into the system by buying the types of bonds these compelling mREITs and CEFs own.
PIMCO Bond CEFs: Are You Betting Against The Fed?
Many popular PIMCO closed-end funds (CEFs) have sold off particularly hard as investors fear the potential impacts of a coronavirus-driven recession. Further, large CEF premiums versus net asset values (NAVs) have evaporated into unusually large discounts as selling pressure has been intense. Further still, the price declines have been exacerbated by a drying up of liquidity in the bond markets. And even though the US Fed has dramatically increased its quantitative liquidity easing in the treasury and agency Mortgage Backed Securities (MBS) repo markets, just this week it announced that it will “be moving for the first time into corporate bonds, purchasing the investment-grade securities.” To some investors, the Fed’s essentially unlimited buying power is terrifying, and to others it is highly reassuring. Will you be betting against the Fed?
These 2 Big-Income Bond CEFs: Buy! Buy! Buy!
This is a very quick note, and it is intended to get this information to you quickly. There are currently a variety of attractive Bond CEF’s that are presenting extremely attractive buying opportunities based on their holdings, their currently discounted prices and their temporarily massive discounts to Net Asset Value (“NAV”). These particular Bond CEFs pay you income monthly (double-digit yields), we own them, and the current buying opportunity is highly attractive.
3 PIMCO Bond CEFs: Huge Yields (8.1%, 8.3%, 9.8%) Paid Monthly
If you are an income-hungry investor, PIMCO offers a variety of low-beta, fixed-income Closed-End Funds (“CEFs”) that are worth considering. In this report, we analyze three of them, multi-sector funds (PFL) (PHK) and (PCI), considering sector allocations, pricing, distribution prospects, leverage, and finally conclude with our opinion on which one of them offers the most attractive balance of risks versus rewards for income-focused investors.
Odd Couple: Kraft Heinz (4.6% Yield) Vs PIMCO Dynamic Credit & Mortgage CEF (8.8% Yield%)
The More It Falls: Top 5 Big Yields Worth Considering
This report is a continuation of our free report title “Top 10 Big Yields Worth Considering.” However, this members-only version contains all the detail for the top 5 big yields worth considering. It includes equities, debt, a closed-end fund, and a very attractive preferred stock. All yielding between 6% and 12%, and all trading at very attractively discounted prices.
3 Blue Chips For Strong Income, Plus Price Appreciation
One of our favorite long-time members (HB from Texas) recently asked “If you had to pick two or three securities for primarily income, but good candidates for capital growth, which would they be?” He mused REITs, MLPs, preferred stocks and bonds. For your consideration, this article includes three blue chip ideas that we consider attractive right now because of their strong income, as well as their potential for healthy price appreciation to boot.
PCI: Attractive 8.6% Yield, But Know The Big Risks
The PIMCO Dynamic Credit and Mortgage Income Fund (PCI) is an attractive CEF for a variety of reasons (including its big 8.6% yield and discounted price versus NAV). However, a look under the hood shows that PCI is exposed to some very big risks. This article provides an overview of the fund, reviews the big risks investors may want to consider, and concludes with our opinion about investing in PCI.
Attractive High-Income Closed-End Funds
This article details multiple attractive opportunities to capture >6%+ yields. And because these attractive income opportunities are all CEFs, they offer investors a little something extra in terms of their currently discounted prices versus their NAVs. If you're an income-focused investor, these CEFs are worth considering.
This High-Yield Low-Risk Investment is Worth Considering
The primary objective of most income-focused investors is to generate as much income as possible with very little risk. And there are smart ways to do this that are often overlooked because so much of the investment world is focused on maximizing total returns (instead of generating safe high income). This article highlights one such opportunity. Specifically, if you are an income-focused investor, this article explains why this particular 8.8% yield is attractive and worth considering.