I have previously written about the Pimco Closed-End Fund “Anomaly”. The majority of closed-end funds (CEFs) trade at a discount to net asset value, but Pimco funds are an exception and usually trade at a premium above NAV.
Here are the changes of the five Pimco CEFs with the highest premiums between June 3 and June 13:
Note that all five funds had a significant decrease in their premium except for PTY. PTY was recommended by Bill Gross in the mid-year Barrons Roundtable over the weekend, which caused a “pop” in price on Monday. On June 10, the PTY premium had actually shrunk to 15.23%.
Back in April, Pimco submitted an SEC filing for a new active ETF similar to Pimco Total Return (TRXT). This ETF may be quite popular and will most likely trade close to the net asset value of the fund. It will provide a strong alternative for many Pimco CEF investors. Some professionals may set up pair trades where they go long TRXT and short a basket of Pimco CEFs selling at a premium.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.