The last few months have seen large shifts across many drivers of CEF performance such as asset prices, interest rates, leverage costs, borrowing levels and others. Over the last few months, we have explored different aspects of fund earnings drivers separately across both taxable and municipal funds, particularly focusing on changes in borrowings and changes in leverage costs.
In this article, we take a look at how PIMCO taxable fund earnings are likely to respond to sharply lower short-term interest rates that we have seen since March of this year. PIMCO funds hold floating-rate