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.


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 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...

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

Unusual great post.


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