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RCS: It Has Dropped Almost 20%, And It's Still Not Cheap

Mar. 03, 2022 10:35 PM ETPIMCO Strategic Income Fund (RCS)12 Comments


  • RCS has been a very poor performer over the past few months. This pain could make for a contrarian buy signal.
  • Despite a drop over 18%, the fund is still not "cheap", when we compare its market price to the underlying value. This makes me reluctant to be a buyer here.
  • Agency MBS remain well supported by fundamentals in terms of credit risk. Housing prices are rising and delinquencies are low. Yet, there is plenty of risk with Fed tapering.
  • RCS' duration is not low enough to really generate my interest, as inflation remains red hot and the Fed has turned less hawkish.
  • This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Learn More »

Bear Market

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Main Thesis / Background

The purpose of this article is to evaluate the PIMCO Strategic Income Fund (NYSE:RCS) as an investment option at its current market price. RCS is a closed-end fund whose

Article Performance

Article Performance (Seeking Alpha)

Premium to NAV

Premium to NAV (PIMCO)

Income Metrics

Income Metrics (PIMCO)

RCS Holdings

RCS Holdings (PIMCO)

US Home Sales (Monthly)

US Home Sales (Monthly) (Nuveen)

Mortgage Rates (30-year)

Mortgage Rates (30-year) (Bloomberg)

Fed Taper

Fed Taper (Federal Reserve)


RCS' Duration (PIMCO)

Inflation Metrics

Inflation Metrics (US Bureau of Labor Statistics)

CME Fed Watch Tool

CME Fed Watch Tool (Source: CME)

Please consider the CEF/ETF Income Lab

This article was written by

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I've been in the Financial Services sector since 2008, which unsurprisingly gives me an invaluable insight in how markets can turn. I was a D1 athlete in college (men's tennis), where I studied Finance. I also have my MBA in Finance.

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