Okay so I have been getting a lot of questions on PIMCO GIS Income Fund.
It invests primarily in US investment grade bonds, and:
Pays a 6.1% yield (approximately) Has a 3 – 4 year effective duration SGD hedged
Does this make it a better buy than T-Bills?
At the same time I know a lot of you are still interested to continue the T-Bills series of articles.
So we’ll try to cover both bases today.
3 questions I will discuss:
Is PIMCO GIS Income Fund a good buy at 6.1% yield? Estimated yield on the next 6-month T-Bills auction? Why I stopped buying T-Bills – and switched to a mix of short duration bonds / money market funds instead? PIMCO GIS Income Fund – estimated yield of 6.1%?
The investment objective of PIMCGO GIS Income fund is (emphasis mine):
The Income Fund is a portfolio that is actively managed and utilizes a broad range of fixed income securities that seek to produce an attractive level of income while maintaining a relatively low risk profile, with a secondary goal of capital appreciation.
This fund seeks to meet the needs of investors who are targeting a competitive and consistent level of income without compromising long term capital appreciation. The fund seeks to generate a competitive monthly dividend while also maintaining a focus on the total return objective. The fund aims to achieve this by employing PIMCO’s best income-generating ideas across global fixed income sectors with an explicit mandate on risk-factor diversification. The fund offers daily liquidity.
This fund is designed for investors who seek steady income: it takes a broad-based approach to investing in income-generating bonds. The fund taps into multiple areas of the global bond market, and employs PIMCO’s vast analytical