PIMCO Closed-End Funds On Sale At Lowest Premiums To NAV In A Year

by: Tim Plaehn

The recent turmoil in the stock market has produced one benefit for investors looking to pick up high-yield closed-end funds. Premiums have shrunk on the big PIMCO double-digit yield funds and some other high-yield funds managed by PIMCO are trading at a rarely seen discount to NAV. A look at share/NAV prices over the last few days shows that while the market traded share prices have dropped quite a bit, the NAVs are holding steady.

Note: Premium/NAV info was sourced from the CEFConnect.com website and is based on the November 14 closing price information.

Double Digit Yield Funds

The most visible and notorious PIMCO CEFs are the PIMCO High Income Fund (NYSE:PHK) and the PIMCO Global StocksPLUS & Income Fund (NYSE:PGP). The shares of these funds have recently been bid up to tremendous premiums to NAV as the return-of-capital - ROC - supported dividends kept the yields in the high double digits on NAV and low double digits at market prices. Both funds are now trading at 52-week-low premiums to NAV.

  Avg. Prem Current Prem. Yield
PHK 66.3% 26.9% 13.86%
PGP 73.8% 38.1% 12.71%


For investors looking for a combination of yield and the PIMCO name, these funds are cheap in relation to historic share/NAV values.

Conservative PIMCO CEFs

The other seven PIMCO managed CEFs have seen the share to NAV premiums shrink in half, with several at or near zero with the new PIMCO Dynamic Income Fund (NYSE:PDI) trading at a 3.5% discount to NAV. These funds all sport current dividend yields in the 7.8% to 9% range and none are using NAV to support the payouts. Here are the funds trading at or near par to NAV.

Low or No Premium Funds:

  • PIMCO Income Strategy Fund II (NYSE:PFN)
  • PIMCO Income Opportunity Fund (NYSE:PKO)
  • PIMCO Income Strategy Fund (NYSE:PFL)

PIMCO funds at 10% premiums compared to 20% plus averages:

  • PIMCO Corporation Opportunity Fund (NYSE:PTY)
  • PIMCO Strategic Global Government Fund (NYSE:RCS)
  • PIMCO Corporate Income Fund (NYSE:PCN)

These funds may not be as well-known as PHK and PGP, but they have put up attractive medium and long term results. PFL increased its monthly dividend significantly in June.


All of these PIMCO high-yield closed-end funds have put up very attractive one and 3-year returns for investors. The range of funds covers the different bond market sectors, if you have a preference for one or the other. If I was forced to pick just one, the PIMCO Dynamic Income Fund with its discount to NAV and 7.7% yield looks good. If the stock market finds a bottom soon, now - as in soon - would be a good opportunity to pick up quality CEF shares which normally trade at much larger premiums to NAV. It is not unreasonable to expect some quick 10% share price returns plus the dividends once the market decides to stabilize.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.