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- Touting a fund by his former employer, Gross suggested a purchase of the Pimco Municipal Income Fund (PMF +1.9%) at the Barron's Roundtable, and its move higher today has been accompanied by more than 5x the average volume. It was already at a 7.3% premium to NAV, so today's move has made that gap even wider. Not selected by Gross, Pimco Municipal Income (PML +0.8%) trades at a 2.8% premium and is up today inline with the rest of the muni CEFs.
- Another pick - the BlackRock Build America Bond Trust (BBN +1.2%) - is gaining on double its average action.
- His other picks were the Janus Flexible Bond Fund (MUTF:JFLEX) and the Schwab U.S. TIPS ETF (SCHP +0.2%).
Nov. 12, 2014, 2:38 PM
Jun. 16, 2014, 3:36 PM
- The Bond King may be battered and bruised a little bit, but his words still cary some weight, with two of his three Barron's Mid-Year Roundtable picks from this weekend posting big gains on heavier-than-usual volume. The thesis: Own some mildly levered closed-end bond funds which can borrow at 10 or 20 basis points, re-lend the money at 400 to 500 basis points, and produce a yield of 7-8%.
- One Bill Gross is buying for his own portfolio is the BlackRock Build America Bond Trust (BBN +2.5%). The feds subsidize 35% of the interest paid, the fund usually owns A- and AA-rated long-term bonds, and currently yields 7.5%.
- He's also a buyer of the Pimco Dynamic Income Fund (PDI +1.1%), an owner of non-agency mortgages expected to yield between 8-10%. On sale for some time, the fund now trades at about net asset value.
- Gross' third pick is an ETF, the iShares U.S. Preferred Stock Fund (PFF +0.1%). Liquid with an expense ratio below 50 bps, the fund primarily holds bank preferreds. It's a short-term play, says Gross, as many of the preferreds in its portfolio will be refunded within a year or to and the dividend will fall. In the meantime, one can collect a 5.5% yield.
Dec. 8, 2010, 5:55 PMBuild America Bond yields rose to 11-month highs as the federal program, left out of the tax cut deal, looks set to expire at year's end barring a last-minute save. Zero Hedge says it demonstrates what happens to an asset class "when it becomes clear that the government may not prop it in perpetuity." | Dec. 8, 2010, 5:55 PM | 1 Comment
BBN vs. ETF Alternatives
Under normal market conditions, the Trust will invest at least 80% of its Managed Assets in Build America Bonds (BABs). The Trust may invest up to 20% of its Managed Assets in securities other than BABs, including taxable municipal securities that do not q
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