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Back in December, I published some articles describing Bill Gross’s closed-end fund buying spree with his personal money. Mr. Gross purchased over $22 million of a wide selection of Pimco closed-end bond funds: municipal, high yield, corporate and floating rate bonds.

I took a look at how these purchases have done since then. The results are quite impressive. Every purchase has been profitable with a gain ranging from 3.5% up to 25%. Mr. Gross has earned over $3 million in profits in less than two months. The percentage gain on the “portfolio” is 13.98% including dividends which are paid out monthly on these funds.

Trade Date

Shares

Price

$ Invested

2/2/2011 Prc

Dividends

Value

Profit

%Profit

12/08/2010

12,096

PMX

9.75

$117,936.00

Muni

10.61

0.140

$130,032.00

$12,096.00

10.26%

9,900

PCQ

11.65

$115,335.00

Muni

11.91

0.154

$119,433.60

$4,098.60

3.55%

19,056

PCK

8.2741

$157,671.25

Muni

8.73

0.126

$168,759.94

$11,088.69

7.03%

12/09/2010

36,225

PCQ

11.5997

$420,199.13

Muni

11.91

0.075

$434,156.63

$13,957.49

3.32%

50,000

PCK

8.2465

$412,325.00

Muni

8.73

0.063

$439,650.00

$27,325.00

6.63%

23,333

PMF

12.048

$281,115.98

Muni

13.04

0.081

$306,152.29

$25,036.31

8.91%

42,864

PZC

8.65

$370,773.60

Muni

8.92

0.060

$384,918.72

$14,145.12

3.82%

88,156

PMX

9.8493

$868,274.89

Muni

10.61

0.070

$941,506.08

$73,231.19

8.43%

12/10/2010

19,168

PCQ

11.5743

$221,856.18

Muni

11.91

0.077

$229,766.82

$7,910.63

3.57%

48,816

PCK

8.1387

$397,298.78

Muni

8.73

0.063

$429,239.09

$31,940.31

8.04%

32,002

PMF

12.0397

$385,294.48

Muni

13.04

0.081

$419,898.24

$34,603.76

8.98%

19,400

PZC

8.5211

$165,309.34

Muni

8.92

0.060

$174,212.00

$8,902.66

5.39%

50,000

PMX

9.7494

$487,470.00

Muni

10.61

0.070

$534,000.00

$46,530.00

9.55%

12/13/2010

50,000

PCQ

11.5886

$579,430.00

Muni

11.91

0.075

$599,250.00

$19,820.00

3.42%

14,439

PMF

11.95

$172,546.05

Muni

13.04

0.081

$189,454.12

$16,908.07

9.80%

6,632

PZC

8.47

$56,173.04

Muni

8.92

0.060

$59,555.36

$3,382.32

6.02%

14,500

PCK

8.0723

$117,048.35

Muni

8.73

0.063

$127,498.50

$10,450.15

8.93%

23,503

PMX

9.47

$222,573.41

Muni

10.61

0.070

$251,012.04

$28,438.63

12.78%

149,000

PHK

12.1342

$1,807,995.80

HiYld

13.35

0.122

$2,007,328.00

$199,332.20

11.03%

114,465

PFL

10.8627

$1,243,398.96

Floaters

12.25

0.075

$1,410,781.13

$167,382.17

13.46%

128,033

PFN

9.3686

$1,199,489.96

Divers

10.45

0.065

$1,346,267.00

$146,777.03

12.24%

161,068

PCN

14.5761

$2,347,743.27

Corp

16.75

0.106

$2,714,962.21

$367,218.93

15.64%

142,615

PTY

15.8023

$2,253,645.01

Corp

19.52

0.115

$2,800,245.53

$546,600.51

24.25%

100,000

PTY

15.7

$1,570,000.00

Corp

19.52

0.115

$1,963,500.00

$393,500.00

25.06%

12/14/2010

16,237

PTY

15.8714

$257,703.92

Corp

19.52

0.115

$318,813.50

$61,109.57

23.71%

50,000

PHK

12.0903

$604,515.00

HiYld

13.35

0.122

$673,600.00

$69,085.00

11.43%

50,000

PFN

9.6383

$481,915.00

Divers

10.45

0.065

$525,750.00

$43,835.00

9.10%

50,000

PFL

11.0896

$554,480.00

Floaters

12.25

0.075

$616,250.00

$61,770.00

11.14%

46,701

PCN

14.6249

$682,997.45

Corp

16.75

0.106

$787,192.06

$104,194.60

15.26%

12/27/2010

10,676

PTY

16.9787

$181,264.60

Corp

19.52

0.115

$209,623.26

$28,358.66

15.64%

33,000

PTY

16.9532

$559,455.60

Corp

19.52

0.115

$647,955.00

$88,499.40

15.82%

8,735

PTY

16.9787

$148,308.94

Corp

19.52

0.115

$171,511.73

$23,202.78

15.64%

27,000

PTY

16.9532

$457,736.40

Corp

19.52

0.115

$530,145.00

$72,408.60

15.82%

12,942

PTY

16.9787

$219,738.34

Corp

19.52

0.115

$254,116.17

$34,377.83

15.64%

40,000

PTY

16.9532

$678,128.00

Corp

19.52

0.115

$785,400.00

$107,272.00

15.82%

12/28/2010

33,000

PTY

17.1969

$567,497.70

Corp

19.52

0.115

$647,955.00

$80,457.30

14.18%

27,000

PTY

17.1969

$464,316.30

Corp

19.52

0.115

$530,145.00

$65,828.70

14.18%

40,000

PTY

17.1975

$687,900.00

Corp

19.52

0.115

$785,400.00

$97,500.00

14.17%

Totals

$22,516,860.75

$3,148,575.22

13.98%

The municipal bond funds were up in the single digit range (3% to 12%). The corporate, high yield and floating rate funds were up solid double digits on average.

The best performer has been PTY, which was also the largest purchase for Mr. Gross. The early December purchases are up well over 20%. Later PTY purchases are up in the mid teens.

PTY was recommended by Mr. Gross in this years Barron’s Roundtable discussion. On December 13, when the first purchase was made, PTY was selling at a 2.7% discount to net asset value. At today’s close (February 2), PTY is selling at an 18% premium!

Since the original purchases in early December, the NMUNP index (Nuveen Municipal Closed-End Fund Exchange Traded Index) has been close to unchanged. Most of the outperformance by the Pimco municipal bond funds has been caused by widening of the premium over net asset value.

For active traders who own these funds and have unused carryover losses from previous years, this may be a good time to take some money off the table. But long term investors who are tax constrained can just enjoy the high income stream that these funds continue to generate.

Source: Bill Gross's Recent CEF Purchases: Highly Impressive Performance