PAXS - PIMCO Update | May 2025 | Valuations Remain Compelling, NAVs Resilient

2025-05-21 13:39:09 ET

Summary

• PIMCO taxable closed-end funds, or CEFs, remain attractive after recent volatility, with PTY and PCN offering compelling value due to compressed premiums and solid fundamentals.
• Leverage across PIMCO funds is at multi-year lows, reflecting prudent management amid higher borrowing costs and uncertain market conditions.
• Coverage ratios dropped mainly due to currency moves, but I do not anticipate distribution cuts, especially for muni CEFs, given historical resilience.
• PCM Fund is now an interesting post-distribution cut, offering diversification and improved safety, though liquidity is a consideration; I recommend PTY, PCN, and PCM for tactical and long-term investors.

(This report was first issued to members of Yield Hunting on May 7th. All data herein is from that date or prior.) ...

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