PFN: Likely To Suffer Declining NII, But Still Trading At A Premium
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The PIMCO Income Strategy Fund II (PFN) offers a high yield but lags behind the peer median. Despite bond market weakness, it achieved a 1.54% total return since October. However, its exposure to floating-rate securities may lead to declining net investment income if rate cuts continue.
January 16, 2025 | 1:45 pm
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PFN offers a high yield of 11.63% but lags behind the peer median. It achieved a 1.54% total return since October despite bond market weakness. However, its exposure to floating-rate securities may lead to declining net investment income if rate cuts continue.
PFN's high yield and recent performance are positive, but its exposure to floating-rate securities poses a risk. If the Fed and ECB continue to cut rates, PFN's net investment income is likely to decline, negatively impacting its short-term price.
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IMPORTANCE 80
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