PCN: Making Smart Moves, But Still Very Expensive
2025-03-10 07:10:29 ET
Summary
- The PIMCO Corporate & Income Strategy Fund offers a high 9.93% yield, and outperformed major fixed-income indices and peers in total return over the past five years.
- Rising inflation and a potential economic slowdown suggest that bonds may not be the best holding for an investor today.
- The fund's recent risk-off strategy and reduced corporate bond exposure reflect a cautious approach amid market turbulence and economic uncertainties.
- The fund easily covered its distributions during the second half of 2024.
- Trading at a 13.71% premium, the fund is expensive compared to peers, suggesting caution for potential investors despite its strong performance history.
The PIMCO Corporate & Income Strategy Fund ( PCN ) is a closed-end fund that investors can purchase as a way of achieving their goal of generating a very high level of income from the assets in their portfolios. The fund does a very good job of this too, as its shares boast a very attractive 9.93% yield at the current price. This is quite a bit higher than any of the major fixed-income indices, which we can see clearly in this chart:
Index/ETF | Current Yield |
Bloomberg U.S. Aggregate Bond Index ( AGG ) | 3.74% |
Markit iBoxx USD Liquid Investment Grade Index ( LQD ) | 4.41% |
Bloomberg High Yield Very Liquid Index ( JNK ) | 6.59% |
Vanguard Total World Bond ETF ( BNDW ) | 3.95% |
Vanguard Total International Bond Index Fund ETF Shares ( BNDX ) | 4.28% |
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PCN: Making Smart Moves, But Still Very Expensive
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