WDI - PHK: Performing Well, But Risks Abound
2025-01-09 06:55:29 ET
Summary
- The PIMCO High Income Fund offers an 11.68% yield, outperforming fixed-income indices but lagging behind similar closed-end funds, suggesting a sustainable distribution.
- Despite a challenging bond market, the fund delivered a 7.54% total return over five months, warranting further portfolio analysis for sustainability.
- The fund invests in both U.S. and foreign bonds, so it does have some exposure to a strengthening U.S. dollar.
- The fund's leverage is modest at 16.24%, lower than peers, which reduces volatility and appeals to risk-averse investors.
- Currently trading at a 4.66% premium to NAV, the fund appears expensive given the risks in the bond market.
The PIMCO High Income Fund ( PHK ) is a closed-end fund that specializes in providing its investors with a very high level of current income. As is the case with many PIMCO funds, it does fairly well at this, as its 11.68% current yield is significantly higher than that of any fixed-income index. We can see that here:
Index/ETF |
TTM Yield |
Bloomberg U.S. Aggregate Bond Index ( AGG ) |
3.76% |
Bloomberg High Yield Very Liquid Index ( JNK ) |
6.61% |
Vanguard Total World Bond Index ( BNDW ) |
3.92% |