PAXS - PAXS: Price Outperforming The Portfolio Makes This Riskier Than Many Believe
2024-06-20 13:58:38 ET
Summary
- PIMCO Access Income Fund is a closed-end fund for income-focused investors, primarily investing in fixed-income securities like bonds for higher yields.
- Bonds lack protection against inflation, affecting purchasing power, but the PAXS closed-end fund outperforms U.S. Treasury securities with an 11.33% distribution yield.
- The fund employs leverage, has consistent distributions, and trades at a 5.31% premium to net asset value, making a "hold" rating appropriate.
- The fund's underlying portfolio has substantially underperformed its share price, so valuation could be an issue here.
- The fund failed to cover its distribution for the second half of 2024, and it is now barely covering it.
The PIMCO Access Income Fund ( PAXS ) is a closed-end fund, or CEF, that income-focused investors can employ in pursuit of their goals of generating a high level of current income from the assets in their portfolios. As is the case with most PIMCO closed-end funds, the PIMCO Access Income Fund primarily achieves this goal by investing in fixed-income securities such as bonds. This can be a good thing for a few reasons:
- Bonds usually have higher yields than common stocks, which allows them to generate a higher level of income from a given investment.
- Bonds are less volatile than common stocks, so investors who are particularly risk-averse may find it easier to sleep at night.