PIMCO CEF Update: Tight Spreads Drive A Derisking Across Taxable Funds
Source: SeekingAlpha
2025-03-28 14:41:41 ET
Summary
- PIMCO's taxable CEFs have seen a significant increase in distribution coverage, likely more driven by interest rate swaps rather than reduced leverage costs.
- PIMCO has sharply reduced leverage and duration risk across its taxable CEFs, positioning defensively amid tight credit spreads and low longer-term rates after the first Fed cut.
- Valuations have deflated slightly, with the average taxable premium just above 10%; PIMCO Muni CEF valuations are reasonable, especially for CA and NY state funds.
- We recently exited a position in PDX due to its undiversified profile, rotating into the Barings BDC.
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PIMCO CEF Update: Tight Spreads Drive A Derisking Across Taxable Funds
PIMCO Income Strategy Fund Shares of Beneficial Interest
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