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Weekly Review: Municipal Bond CEFs - Dividend Cuts For Several PIMCO Funds

Published Wed, 10 Apr 2019 11:12:04 -0400 on Seeking Alpha

Introduction
Over the past few months, most of you have noticed our increased activity in closed-end funds as the inflow of volatility finally shook them up and created various arbitrage, and directional, opportunities for active traders like us.
Currently, we are cautious when we choose our long positions as most of the closed-end funds which hold municipal bonds have lost their statistical edge and are traded at positive Z-scores. However, there are several interesting pair trade opportunities which can be traded. For the conservative market participants with longer investment horizon, I still see dividend opportunities which are traded at high discounts. No doubt, the most important event from the past week was the dividend cut of PIMCO funds.
The Benchmark
Over the past week, the price of iShares National Muni Bond ETF (MUB) remained in red territory after a slight bounce back from the Treasury yields. The reported drop was $0.45 which decreased the price of the index to $110.74 per share.
It is important to notice the fact that the main benchmark distributed its regular monthly dividend. For the month of March, the payout amount is $0.24 per share. So, as a generalization, I could say that the net change of the municipal bonds was the rounded amount of $0.22.

Source: Barchart.com - iShares National Muni Bond ETF

Source: Dividend.com
As you know, we follow the performance of the U.S. Treasury bonds - considering them a risk-free... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
PIMCO MUNICIPAL INCOME FUND III 12.31   0.0 0.00 0.00 4.82
PIMCO CALIFORNIA MUNICIPAL INCOME FUND III 10.93   0.0 0.00 0.00 4.45
BLACKROCK MUNIYIELD PENNSYLVANIA INSURED FUND 14.13   0.0 0.00 0.00 3.89

PIMCO MUNICIPAL INCOME FUND III - PMX
PIMCO MUNICIPAL INCOME FUND III - PMX  


Older articles featuring Pimco Municipal Income Fund Iii (PMX):
Treasury Curve Bear-Steepened; Muni Yields Higher - Muni Fortnightly, August 31, 2020
Treasury Yields Rose A Few Basis Points By The End Of The Week - Muni Fortnightly, August 10, 2020
Treasury Yields Were Little Changed In Low Volatility - Muni Fortnightly, June 22, 2020
Treasury Yields Little Changed In Low Volatility - Muni Fortnightly, June 1, 2020
Treasury Yields Mixed With Curve Steepening - Muni Fortnightly May 11, 2020
Treasury And Municipal Yields Extremely Volatile - Muni Fortnightly March 30, 2020
Municipal Bond Perspective: Approach High Yield With Caution In 2020
Weekly Review: Municipal Bond CEFs - Dividend Cut For Most Of PIMCO Funds
Reaching For Yield? Be Aware Of What Lies Beneath...
Weekly Review: Municipal Bond CEFs - PCQ Announced Unchanged Dividend

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