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Montgomery Street Income Securities (NYSE:MTS) is a closed-end bond fund that appears to a be a reasonable value now for conservative income-oriented investors. It invests in a diversified bond portfolio across the spectrum- about 50% in U.S. Governments and Agencies, about 40% in corporates and the remainder in mortgage bonds.

In the next rebalancing (March 21), MTS is being added to the CEFX closed-end fund index that is used by the PCEF exchange-traded fund.

Here are some recent stats on MTS:

Ticker: MTS Montgomery Street Income Securities

  • Total Net Assets: 173 MM
  • Expense ratio: 0.77%
  • Discount to NAV: -8.4%
  • Distribution rate: 4.34% (quarterly dividends)
  • Modest Leverage: 9.64%
  • Turnover Ratio: 87% (annualized)

Full Disclosure: Long MTS.

Source: Attractive Bond CEF for Income Investors