Monday, December 19, 2005

More on PML

*** This is NOT investment advice!*****

I just received a request for more information on my muni-bond investment vehicle, PIMCO's Municipal Income Fund II (PML). Here's a quick rundown of the stats:
  • Yield = 6.43% (tax free for Federal taxes)
  • Price Variability - in it's 3.5 year history it's been as low as 13 and it's high has been 15.80
  • Dividend Variability - a few months it was lower and a few higher. Check it out your self.
  • It's a closed-end, exchange traded fund

My tax equivalent yield (yield / (1-marginal tax rate)) for this is very close to 9%. This is not state tax free for me due to the fact that most bonds are not Virginia-based.

He's what I love about this fund:

  • Great almost tax-free yield
  • Dividents come monthly
  • Exchange traded so I can quickly exit and reinvest elsewhere as I see fit
  • Closed-end funds such as this are not impacted by big fund inflows or outflows
  • It's managed by PIMCO - arguably the best bond fund managers in the world
  • 80% of the bonds are rated as investment quality

I'm using this fund as a parking lot for my cash holdings and I'm pretty happy with it.

4 Comments:

At 9:04 AM, Anonymous Anonymous said...

Thank you for the very useful info about this PIMCO fund. I am an investor in some PIMCO fund as well. I noticed that Bill Gross of PIMCO recently bought about $1,500,000 worth of two PIMCO funds. You can easily locate the SEC filing for Gross at http://www.cemfo.com/. Click on the "Orphans" button and go to the bottom of the page. Thanks again for this info!

 
At 1:47 AM, Anonymous Jonathan said...

Thanks from me too. How do they tell you how much of the yield is taxable and how much is not? Or is it all non-federally taxable? Sorry, I'm new to muni-bonds.

 
At 6:19 AM, Blogger Early Riser said...

jonathan - most muni-bond funds are 100% tax free. Some people, however, are subject to alternative minimum tax and that can limit the deductablity of muni's. More info here...
http://www.investinginbonds.com/learnmore.asp?catid=7&subcatid=72&id=42

 
At 1:17 PM, Anonymous PENNY STOCK INVESTMENTS said...

Unusual great post.

 

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