PIMCO Update February 2024 | PDX Makes The Move, Valuations Remain Rich
Summary
Valuations of taxable bond CEFs are rich, prompting the author to lighten up and sell shares in several funds.
Coverage levels for taxable funds declined in January, primarily due to the falling US dollar and mark-to-market currency forward contracts.
Net investment income production has been declining for several years, with some funds relying on at-the-market offerings to sustain distributions.
In this report, I will spend more time on the semi-annual reports and valuations more than anything else. In summation, the funds have a lot of moving parts with some relying on the at the market offering to issue new shares and bring in new capital in order to make up the shortfall between earnings and the distributions. Others have to rely on capital gains.
