PAXS - PIMCO Update May 2024 - PDX Levers Up

2024-06-14 07:00:00 ET

Summary

• Coverage on PIMCO CEFs improved, with muni CEF coverage ratio up 9 points to 89% and taxable CEFs up over 20 points to 84.6%.
• Leverage changes varied among funds, with some cutting borrowing significantly while others increased leverage.
• NAVs for PIMCO CEFs showed positive trends, with some funds performing better over the past year than others.

Coverage Has Improved

Coverage on nearly all PIMCO CEFs improved. The average muni CEF coverage ratio improved 9 points to 89%. On the taxable side, we saw even better improvement, with over 20 points of improvement and an average 84.6% coverage of the distribution.

The main driver was simply the roll off of the January numbers, which, in net investment income terms, were terrible. Using PIMCO Dynamic Income ( PDI ) as an example, the fund earned $0.0789 in estimated 3-month average net investment income ("NII") through January. Fast-forward three months and that same number moves up to $0.1294, an increase of 64%....

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