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PIMIX Distribution Drop

Anyone else notice that the monthly distribution has dropped from $0.0555 to $0.04? To my mind that makes this a much less appealing fund.


  • Yep. It’s been going around.
  • Like 4% going forward?
  • Yield’s getting harder this year. Unless you can stand volatility via leverage perhaps in a CEF or something like XOM or XLE.
  • APHFX seems to be hanging in at about 6%. JNK 5.4%. HYLD 4.9%.

    All have experienced greater drawdown than PIMIX.
  • You ain't kidding. At least the value has gone up lately. Like Charles said, yields are getting tougher.
  • msf
    edited September 2020
    Charles said:

    Yield’s getting harder this year. Unless you can stand volatility via leverage perhaps in a CEF or something like XOM or XLE.

    PIMIX is significantly leveraged as well. Over half the ER, 0.59% out of 1.09%, goes toward paying interest (per summary prospectus).

    Borrowing securities rather than cash is another way to achieve leverage. In round figures, the fund is 2x long and 1x short in bonds (see M* portfolio page). (Contrast that with PDIIX, which doesn't short bonds, but gets its 133% net bond holdings by only borrowing cash.)

    PIMCO funds in general make extensive use of derivatives. While derivatives can be used defensively, my sense is that PIMCO uses them aggressively, further increasing effective leverage. Though with PIMCO, it is always difficult to tell what they're doing.

    Regarding what PIMCO is doing, I recently ran across this analysis of PIMIX. It takes an approach similar to what S&P does in analyzing mutual funds for its individual fund reports (or did, the last time I could find them years ago). It looks at how the fund behaves, regardless of what it actually holds. It tries to disentangle the different factors by accounting for the correlations among them ("multicollinearity").

    However, it says little about derivatives, other than they're hard to deal with directly:
    Pretty much all of the top holdings are either futures or swaps. Fund data and research providers, like Morningstar, as well as most institutional investors, are not capable of netting those swap positions against thousands of bonds, some of which are not easily priced. It is worth noting that the sum of top 10 derivatives positions is negative 32% and, on top of that, the fund turns over its entire portfolio every other month (472% turnover), rendering intermittently disclosed holdings snapshots useless.
  • edited September 2020
    Just noticed RCTIX yield is actually increasing a bit. About 4.6%. Dennis championed this fund.
  • edited September 2020
    @msf. Good stuff. Suspect the same with PMZIX, though more tempered. Both served investors pretty well through March madness. YTD: PIMIX +2. PMZIX + 3. DODIX +7. Suspect AUM has to start being a drag on PIMIX. But maybe not, PIMCO has tremendous resources.
  • edited September 2020
    OSTIX also just upped its yield slightly. Now 4.1%. It too has served more conservative investors well this year, so far.

    As did RCTIX.
  • What happens when management stops waving the ER ?
  • @Derf. Certainly worth a call. But typically, the clause is there to recoup past waivers if AUM increases enough.
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