RCS - RCS: PIMCO's Most Overvalued Bond Play

2024-05-07 05:21:27 ET

Summary

• PIMCO Strategic Income Fund aims to generate higher income than high-quality US debt securities while also pursuing capital gains.
• The fund's portfolio is primarily composed of mortgage-backed securities, followed by high yield or junk securities.
• Investment grade securities make up approximately 9% of the fund's holdings.
• The current setup is the worst we could find in the PIMCO suite.

PIMCO Strategic Income Fund ( RCS ) is a closed end fund and its primary purpose is to earn an income that is "higher than that generated by high-quality, intermediate-term U.S. debt securities". It also pursues capital gains, but only to the extent it does not interfere with its aforementioned raison d'etre. Keeping the primary goal in mind, mortgage backed securities form the largest chunk by far of the fund's portfolio, followed from afar by high yield or junk securities....

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