WDI - PFN: Making Intelligent Moves With Its Portfolio But Doesn't Deserve A Premium

2024-07-31 17:36:32 ET

Summary

• PIMCO Income Strategy Fund II offers a high yield of 11.98%, above the median for similar funds.
• The PFN closed-end fund has underperformed the domestic bond indices over the past few weeks, as well as over longer periods of time.
• The fund is positioning itself for potential interest rate cuts, but its premium valuation may not be justified given its historical performance.
• The fund's net asset value has been consistently declining, and it has consistently failed to achieve capital preservation.
• The fund might be okay if purchased discounted, but it is far too expensive right now.

The PIMCO Income Strategy Fund II ( PFN ) is a closed-end fund, or CEF, that investors searching for income can purchase to accomplish their goals. As is the case with most PIMCO funds, the PIMCO Income Strategy Fund II primarily does this by investing in a portfolio that consists of bonds and similar debt securities. It also has a higher yield than many similar debt funds that are available in the market. As of the time of writing, the PIMCO Income Strategy Fund II yields 11.98%. Here is how this fund compares with its peers that employ a similar strategy:

For further details see: