PTY - December Taxable PIMCO CEF Update

• We take a look at the PIMCO CEF leverage and coverage numbers for December.
• Overall, December was a pretty good month for shareholders as coverage increased across the board, NAV gains exceeded distributions while PIMCO took aggregate leverage lower to reflect less attractive valuations.
• Premium valuations remain relatively rich in the suite when adjusted for those funds that sharply cut distributions in 2020.
• One important lesson of 2020 was that while high leverage levels bring stronger performance, they also increase the vulnerability from deleveraging.
• We continue to hold PHK in our High Income Portfolio due to its low fee, defensive stance from its low leverage level, a significant exposure to yield curve steepening and reasonable valuation.

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