Every week, we’ll profile a high yield investment fund that typically offers an annualized distribution of 6-10% or more. With the S&P 500 yielding less than 2%, many investors find it difficult to achieve the portfolio income necessary to meet their needs and goals. This report is designed to help address those concerns.
As the equity markets crumble (or at least the mega-cap tech segment of it does), the bond market has remained relatively steady. Since this whole fiasco started back on July 11th with the release of the June CPI report, Treasuries, investment-grade and junk bond returns have been essentially flat. Taken at face value, this means that investors aren’t rotating out of stocks and into bonds. They’re simply rotating within equities. Credit spreads remain tight and there’s been no big flight to safety trade yet. That doesn’t mean that investors shouldn’t be thinking about it right now.
The PIMCO Corporate & Income Strategy Fund (PCN) maintains a fairly balanced mix of credit qualities, making it perhaps better positioned to take advantage of a bond rally than a lot of traditional fixed income CEFs. Its solid track record and mix of different credit types has made it popular among income seekers, but it’s also commanding a big premium, perhaps removing any value from the equation. It could be a good fit if conditions keep trending negatively, but it all depends on what’s under the hood.
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