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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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PIMCO Muni Bond CEF Is at an Attractive Discount |
Seeking Alpha - August 15, 2011 - By George Spritzer
I have written several articles about the tendency of PIMCO closed-end funds to consistently trade premiums over net asset value. But last week, because of the panic selling in the markets, there was an opportunity on August 8, to purchase the Pimco Municipal Income II Fund (ticker: PML) at a discount over 5%. By the end of the week, the discount had narrowed somewhat, but PML is still at a 1% discount to net asset value.
PML is a leveraged national municipal bond fund with about average credit quality and good trading liquidity. It seeks to be “AMT-Free” by avoiding bonds that generate interest subject to the alternative minimum tax. PML management uses proprietary analytical that test and evaluate sensitivity of the fund portfolio to changes in interest rates and the yield curve.
I will be discussing the same 14 factors that I use to evaluate other municipal bond closed-end funds. For more background information on these factors, refer to my first report on NPM.
Factor #1: What is the distribution rate?
PML currently has a high distribution yield of 7.50%. It pays a regular monthly dividend of $0.065 per share or an annual distribution of $0.78.
Factor #2: What is the likelihood the fund can raise its monthly dividend?
To determine this, I look at the Average Earnings/Current Dividend Ratio. This ratio tells you whether or not a fund is earning its current dividend. If the value is well above 100%, it means the fund can easily afford to raise its distribution rate.
For PML, the average earnings over the last three reported months was $0.074, so the Average Earnings/Current Dividend ratio= 113.8%.
This factor is quite positive. There is also a healthy positive value for “Undistributed Net Investment Income” or UNII of +0.2565, which means that PML has nearly four months monthly interest in reserve to cover future monthly shortfalls.
Factor #3: What is the Expense Ratio?
I look at the Baseline expense ratio, which does not include leverage costs. PML has a baseline expense ratio of 1.24%, which is a bit on the high side, but typical for Pimco funds.
For the complete article.
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| Stuff to look at |
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S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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