PTY - PIMCO June Update | A Strong Recovery And A Swap Opportunity

• Fundamentals improved very strongly for PDI and PCI, especially with coverage previously looking very weak to now very healthy.
• The main drivers of that improvement were the flattening of the yield curve along with the US dollar appreciating significantly vs. the euro and pound.
• PDO's valuation has gone up significantly in the last two months while at the same time PCI/PDI have come down. We recommend swapping some from PDO to PCI.
• So far in July (as of the 26th), the dollar has appreciated some more and the curve flattened slightly. Thus, the coverage numbers should continue to look good for July.
• The munis funds look stable and we continue to like PMF among the national funds, PNI for NY, and PCK for CA.

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