CEF Holdings --- May 2026

[marget]

just wondering if the 2 trolls are isomorphic

At first I thought this. Over time, though, I do observe a difference.
For some reason I think that rjs05 person is trying to figure out something ----but that some-something is not to be found in us PDI folks---!!! Us PDI folks are nutty enuff as it is; no one should attempt to figure us out. Still, I don't feel any devotion to PDI; I can't even imagine what it would feel like to be devoted to an investment. not in the ball park

 

[marget]

How can we miss you if you keep coming back? It might "turn around" faster if you started an alternate thread on non-PIMCO bond CEFs - like you suggested. BTW many of us "know" each other from Morningstar going back 20-25+ years. Have a great day!

remember Erryl & Anil & Chamois & deer island? great guys!!!! It was only thanks to Anil that I came to understand how taxes work.

 

[dickoncapecod]

remember Erryl & Anil & Chamois & deer island? great guys!!!! It was only thanks to Anil that I came to understand how taxes work.

Miss those folks. D

 

[Anitya]

remember Erryl & Anil & Chamois & deer island? great guys!!!! It was only thanks to Anil that I came to understand how taxes work.

I think Chamois is no longer with us. I do not think I saw the other three after I left M* Discuss. Great guys to be around.

 

[COcheesehead]

just wondering if the 2 trolls are isomorphic

The consistent liking of each other’s posts across several threads has been interesting.
If it was the same person, I am sure the mods would have figured that out.

 

[Bill E]

I think Chamois is no longer with us. I do not think I saw the other three after I left M* Discuss. Great guys to be around.

Yes, Chamois passed unexpectedly during surgery while we were on Morningstar. All were very helpful.

Bill

 

[dickoncapecod]

The week ended 5/15 was a poor one for most bondish CEFs. Recent new weekly MACD buy signals disappeared or went marginally negative. Daily MACDs that have done a better job during recent turbulent markets threw strong sell signals. Portfolio component ETFs LQD MBB and IEF are now on weekly MACD sells, while HYG'S buy signal disappeared. Note: all of these suffered breakdown gaps Friday, leaving island top-ish formations on daily charts. These reversals of more positive technical indicators were consistent with the narrative change from flat to down future Fed policy rates to flat to up.

Fed funds futures now predict a possible rate hike near year end --- certain by early 2027. The year bill one year forward is up to 4.33, and the 5yr 5 years forward inflation breakeven has moved up to 2.43, supporting FOMC members who wish to argue inflation expectations have become unanchored.

Inflation week brought us inflation stats significantly higher that consensus expectations. CPI annual headline rose to 3.8% with core at 2.8%. PPI 6.0% AND 5.2%. And export/import prices rose 1.9%/3.3% FOR THE MONTH(!), bringing annual rates to 4.2% and 8.8%. As high energy prices move through the production to the distribution system, it appears that higher retail prices are "in the pipeline." Note: while some analysts predict energy prices will drop rapidly when the conflict is resolved, energy analysts and oil specialists insist higher prices and even shortages will persist for months as infrastructure is repaired, national reserve deficits are replenished, and tankers are repositioned/filled/complete deliveries.

This coming week only features perpetually flat-ish housing data, so Fed minutes (Weds) and energy prices will probably dominate interest rate movements. Finally, with various Fed and private models predicting Q2 GDP between 2% and 4% and employment stats stable, there is no longer any apparent rationale for Fed rate cuts.

Opinion. It appears that we are experiencing an interest rate narrative shift. This is a big deal. Rate asset prices and curves all imply that interest rates will be higher rather than lower in the future. The consequences of such a narrative change --- upending a multi-year set of assumptions --- should not be underestimated. IF IF IF the higher-later rate narrative comes to dominate analyst thinking and market behavior, the picture that could emerge for year-end 2026 would include Fed funds at 3.8%, a 10yr at 5+%, and significantly wider credit spreads.
While 12+% bondish CEFs would remain relatively cheap even in such a future rate environment, we must remember that financial assets are traded by humans --- a bunch notoriously driven by fear rather than rigorous analysis. And currently, a narrative change, price momentum and inflation outlooks are aligned --- sending me into capital preservation mode, willing to trade away imagined near term price gains to avoid losing (more!) real dollars/portfolio capital.

To critics who accuse me of talking my book....guilty! Current positions:
PDI 14% PAXS 7% JFR 11% WDI 6% PTY 4% Small residuals 4% Cash 54%

Regards, Dick

 

[Phroig]

Yes, Chamois passed unexpectedly during surgery while we were on Morningstar. All were very helpful.

Bill

I recall his daughter posted a link to his obit. Turned out he was a retired Vice admiral!
FWIW, I haven’t owned any CEFs for over a year, but I still enjoy this thread.

 

[Flieger]

Guess don't understand, hence the question. But will try to ignore this thread in future as some others who questioned or cautioned in past have. Just never understood the unwavering devotion to a few investments that chronically seem to go down, and down and down. There are many other CEFs, (the thread's heading correct) often equity based, that may imo be so much more worthwhile to invest in from any perspective, trading or total return, and warrant bulk of conversation.. Maybe separate thread warranted for those or just will discuss as arises within the 'what did you trade and why thread' which invites open discussion. Why such unwavering devotion to Pimco bondish cefs such as PDI? Is it solely due to crazy high prospective yield? Maybe other reasons but can't really even ask here without attacks or ad hominems by a few, usually the same few or now maybe just one. So will leave all to their own devises and draw own conclusions. But good luck.

I don't think you have to ignore this thread, it's a CEF thread after all, not a PIMCO thread. That said, rather than JUST question everyone who has made a choice to invest in PIMCO funds, you state as bolded above you believe there are better performing CEF's. Post them and why you think they are better. Maybe it will help some with looking at alternatives. Otherwise, you are just seemingly instigating with your comments for replies.

Flieger

 

[dickoncapecod]

I don't think you have to ignore this thread, it's a CEF thread after all, not a PIMCO thread. That said, rather than JUST question everyone who has made a choice to invest in PIMCO funds, you state as bolded above you believe there are better performing CEF's. Post them and why you think they are better. Maybe it will help some with looking at alternatives. Otherwise, you are just seemingly instigating with your comments for replies.

Flieger

I am always searching for alternatives to the PIMCO suite.....particularly floating rate portfolios that may benefit going forward.
Regards, Dick

 

[dickoncapecod]

I recall his daughter posted a link to his obit. Turned out he was a retired Vice admiral!
FWIW, I haven’t owned any CEFs for over a year, but I still enjoy this thread.

And Chamois was the name of his beloved dog --- buried near his master. D

 

[PaulR888]

The week ended 5/15 was a poor one for most bondish CEFs. Recent new weekly MACD buy signals disappeared or went marginally negative. Daily MACDs that have done a better job during recent turbulent markets threw strong sell signals. Portfolio component ETFs LQD MBB and IEF are now on weekly MACD sells, while HYG'S buy signal disappeared. Note: all of these suffered breakdown gaps Friday, leaving island top-ish formations on daily charts. These reversals of more positive technical indicators were consistent with the narrative change from flat to down future Fed policy rates to flat to up.

Fed funds futures now predict a possible rate hike near year end --- certain by early 2027. The year bill one year forward is up to 4.33, and the 5yr 5 years forward inflation breakeven has moved up to 2.43, supporting FOMC members who wish to argue inflation expectations have become unanswered.

Inflation week brought us inflation stats significantly higher that consensus expectations. CPI annual headline rose to 3.8% with core at 2.8%. PPI 6.0% AND 5.2%. And export/import prices rose 1.9%/3.3% FOR THE MONTH(!), bringing annual rates to 4.2% and 8.8%. As high energy prices move through the production to the distribution system, it appears that higher retail prices are "in the pipeline." Note: while some analysts predict energy prices will drop rapidly when the conflict is resolved, energy analysts and oil specialists insist higher prices and even shortages will persist for months as infrastructure is repaired, national reserve deficits are replenished, and tankers are repositioned/filled/complete deliveries.

This coming week only features perpetually flat-ish housing data, so Fed minutes (Weds) and energy prices will probably dominate interest rate movements. Finally, with various Fed and private models predicting Q2 GDP between 2% and 4% and employment stats stable, there is no longer any apparent rationale for Fed rate cuts.

Opinion. It appears that we are experiencing an interest rate narrative shift. This is a big deal. Rate asset prices and curves all imply that interest rates will be higher rather than lower in the future. The consequences of such a narrative change --- upending a multi-year set of assumptions --- should not be underestimated. IF IF IF the higher-later rate narrative comes to dominate analyst thinking and market behavior, the picture that could emerge for year-end 2026 would include Fed funds at 3.8%, a 10yr at 5+%, and significantly wider credit spreads.
While 12+% bondish CEFs would remain relatively cheap even in such a future rate environment, we must remember that financial assets are traded by humans --- a bunch notoriously driven by fear rather than rigorous analysis. And currently, a narrative change, price momentum and inflation outlooks are aligned --- sending me into capital preservation mode, willing to trade away imagined near term price gains to avoid losing (more!) real dollars/portfolio capital.

To critics who accuse me of talking my book....guilty! Current positions:
PDI 14% PAXS 7% JFR 11% WDI 6% PTY 4% Small residuals 4% Cash 54%

Regards, Dick

The accusers should go bark up another tree in another forest.

 

[DrVenture]

...

Opinion. It appears that we are experiencing an interest rate narrative shift. This is a big deal. Rate asset prices and curves all imply that interest rates will be higher rather than lower in the future. The consequences of such a narrative change --- upending a multi-year set of assumptions --- should not be underestimated. IF IF IF the higher-later rate narrative comes to dominate analyst thinking and market behavior, the picture that could emerge for year-end 2026 would include Fed funds at 3.8%, a 10yr at 5+%, and significantly wider credit spreads.
While 12+% bondish CEFs would remain relatively cheap even in such a future rate environment, we must remember that financial assets are traded by humans --- a bunch notoriously driven by fear rather than rigorous analysis. And currently, a narrative change, price momentum and inflation outlooks are aligned --- sending me into capital preservation mode, willing to trade away imagined near term price gains to avoid losing (more!) real dollars/portfolio capital.

...

Regards, Dick

The only part of the rate narrative that is the least bit surprising to me is how anyone thought we would see anything but "flat to higher" rates in this environment. Anyone who did not see inflation coming was not operating in "analysis" mode, rather "denial" mode.

"Just when you thought it was safe to go back into the water."

 

[stefansm]

This bellow from a SA commenter, on the question of why this market has this super powerful momentum despite all the headwinds: inflation, possible Fed tightening, debt, war, etc? What does "the market" see in the future, which makes it rally today?

... productivity gains [from the AI revolution - my note] are NOT merely theoretical. They are already showing up in hyperscaler efficiency, software automation, inference acceleration, code generation, customer service automation, drug discovery, chip design, logistics optimization, and enterprise workflow reduction. The market is not pricing “science fiction”; it is pricing the probability that AI meaningfully expands operating margins and economic output over the next decade, exactly as the internet, cloud, and mobile revolutions did before skeptics admitted they were real.

As for the national debt, yes, it matters. But debt becomes a true existential problem when growth stagnates while borrowing costs stay elevated. The single most effective antidote to excessive debt is higher nominal GDP driven by productivity, innovation, and corporate profitability. Ironically, if AI driven productivity accelerates even modestly, it improves the debt math substantially by expanding the denominator faster than pessimists assume. The market understands that. Doom narratives about debt have existed for 20+ years while U.S. equities, earnings, innovation leadership, and global capital dominance continued compounding anyway.

 

[dickoncapecod]

This bellow from a SA commenter, on the question of why this market has this super powerful momentum despite all the headwinds: inflation, possible Fed tightening, debt, war, etc? What does "the market" see in the future, which makes it rally today?

... productivity gains [from the AI revolution - my note] are NOT merely theoretical. They are already showing up in hyperscaler efficiency, software automation, inference acceleration, code generation, customer service automation, drug discovery, chip design, logistics optimization, and enterprise workflow reduction. The market is not pricing “science fiction”; it is pricing the probability that AI meaningfully expands operating margins and economic output over the next decade, exactly as the internet, cloud, and mobile revolutions did before skeptics admitted they were real.

As for the national debt, yes, it matters. But debt becomes a true existential problem when growth stagnates while borrowing costs stay elevated. The single most effective antidote to excessive debt is higher nominal GDP driven by productivity, innovation, and corporate profitability. Ironically, if AI driven productivity accelerates even modestly, it improves the debt math substantially by expanding the denominator faster than pessimists assume. The market understands that. Doom narratives about debt have existed for 20+ years while U.S. equities, earnings, innovation leadership, and global capital dominance continued compounding anyway.

Hey! STOCKS might go up forever! When one assumes current hyperscaler growth % will go on forever, it rains sugar-plums and candy canes. And TREASURY has decades of easy borrowing before it. But that doesn't mean various bondish CEFs can't go down a buck or more.
Regards, Dick

 

[stefansm]

Hey! STOCKS might go up forever! When one assumes current hyperscaler growth % will go on forever, it rains sugar-plums and candy canes. And TREASURY has decades of easy borrowing before it. But that doesn't mean various bondish CEFs can't go down a buck or more.
Regards, Dick

Indeed. Seems like our bondish CEFs are caught up between the headwinds of inflation and possible Fed tightening and the tailwind of a powerful economic boom, which the market is anticipating. The HY part of the portfolio benefits in this economic environment, while the part correlated with the treasuries (IG bonds, etc) suffers.
As I don't know the portfolios makeup, I can only guess, my impression is they are more correlated with what happens with the HY bonds most of the time, and the HY bonds are strongly correlated with the stock market.

The HY bond traders seem unfazed by the possible macro adversity:

 

[stefansm]

I think the MBS part of the Pimcos portfolios sits between these 2 forces: pressured by rising inflation and Fed tightening while benefiting from a strong economy which supports credit availability and help contain defaults.

 

[dickoncapecod]

Indeed. Seems like our bondish CEFs are caught up between the headwinds of inflation and possible Fed tightening and the tailwind of a powerful economic boom, which the market is anticipating. The HY part of the portfolio benefits in this economic environment, while the part correlated with the treasuries suffers.
As I don't know the portfolios makeup, I can only guess, my impression is they are more correlated with what happens with the HY bonds most of the time, and the HY bonds are strongly correlated with the stock market.

The HY bond traders seem unfazed by the possible macro adversity:

View attachment 63611

Hi. This is not a crit....just a question. I've noticed you use high yield spreads rather than prices in your analytical toolkit. As an old trader, I'm naturally inclined to use prices.
Consider: since late Feb, HYG PRICE has fallen from 81 to79.5 = down 1.8%. Intermediate Treasury IEF has fallen from 98 to 93.5 = down 4.6%. So the HY spread has closed because Treasury yields have risen more than HY ----- but traders of both products have lost money.
My only point the HY spread might tighten or hold steady (IMO temporarily) while BOTH HY AND TREASURYS get clobbered. So I'd be inclined to use actual yields rather than the difference between them as my indicators. What's behind your spread preference?
Regards, Dick

 

[dickoncapecod]

Indeed. Seems like our bondish CEFs are caught up between the headwinds of inflation and possible Fed tightening and the tailwind of a powerful economic boom, which the market is anticipating. The HY part of the portfolio benefits in this economic environment, while the part correlated with the treasuries suffers.
As I don't know the portfolios makeup, I can only guess, my impression is they are more correlated with what happens with the HY bonds most of the time, and the HY bonds are strongly correlated with the stock market.

The HY bond traders seem unfazed by the possible macro adversity:

View attachment 63611

Hi. This is not a crit....just a question. I've noticed you use high yield spreads rather than prices in your analytical toolkit. As an old trader, I'm naturally inclined to use prices.
Consider: since late Feb, HYG PRICE has fallen from 81 to79.5 = down 1.8%. Intermediate Treasury IEF has fallen from 98 to 93.5 = down 4.6%. So the HY spread has closed because Treasury yields have risen more than HY ----- but traders of both products have lost money.

 

[dickoncapecod]

I think the MBS part of the Pimcos portfolios sits between these 2 forces: pressured by rising inflation and Fed tightening while benefiting from a strong economy which supports credit availability and help contain defaults.

Rising rates also reduce prepayment speeds. Very good for MBS supported by IO pools, mortgage servicing rights and of course many many MBS are floating rate products.
Regards, Dick

 

[stefansm]

Hi. This is not a crit....just a question. I've noticed you use high yield spreads rather than prices in your analytical toolkit. As an old trader, I'm naturally inclined to use prices.
Consider: since late Feb, HYG PRICE has fallen from 81 to79.5 = down 1.8%. Intermediate Treasury IEF has fallen from 98 to 93.5 = down 4.6%. So the HY spread has closed because Treasury yields have risen more than HY ----- but traders of both products have lost money.
My only point the HY spread might tighten or hold steady (IMO temporarily) while BOTH HY AND TREASURYS get clobbered. So I'd be inclined to use actual yields rather than the difference between them as my indicators. What's behind your spread preference?
Regards, Dick

I use the HY Spread to measure Risk-On vs Risk-Off.
(It is not the only indicator I use, but part of a set of indicators, technical & fundamental).

If the economy will contract, in the future, for whatever reason, both the stock market and the HY Spread will signal it, well before any economic data becomes available. The stock market can "see around the corner", a few months in advance. But the HY Spread is even more sensitive. It is the canary in the risk on assets mine.
The HY bonds issuing companies are the first to suffer in an economic downturn, and the HY bond market is a market of professional traders, all smart money, unlike the stock market where the smart money action is masked for while by the dumb money (retail) fear & greed.

So, the HY premium paid on top of the credit risk free treasuries indicates how the smart money in the HY market perceive future risk to the economy.

The HY bond prices fluctuate, for a number of reasons, but I want to filter out all factors which can influence Hy bond prices, and look only at the future economic risk. This, the measure of risk, is given by the trend in HY spread, i.e if the pro bond traders perceive economic problems in the future they ask for more premium today to compensate over holding the safe credit risk free assets. The trend of the HY Spread is the tell: UP => economic problems around the corner, DOWN =>the coast is (probably) clear.
So, now, the HY spread trend is down, i.e traders in HY feel no need to compensate for more risk in holding these bonds => the economy is growing beyond the horizon => safe to invest in risk-on assets.

Finally, I consider bondish Pimcos risk-on assets, as I showed in some correlation charts with the stock markets.

 

[Anitya]

This bellow from a SA commenter, on the question of why this market has this super powerful momentum despite all the headwinds: inflation, possible Fed tightening, debt, war, etc? What does "the market" see in the future, which makes it rally today?

... productivity gains [from the AI revolution - my note] are NOT merely theoretical. They are already showing up in hyperscaler efficiency, software automation, inference acceleration, code generation, customer service automation, drug discovery, chip design, logistics optimization, and enterprise workflow reduction. The market is not pricing “science fiction”; it is pricing the probability that AI meaningfully expands operating margins and economic output over the next decade, exactly as the internet, cloud, and mobile revolutions did before skeptics admitted they were real.

As for the national debt, yes, it matters. But debt becomes a true existential problem when growth stagnates while borrowing costs stay elevated. The single most effective antidote to excessive debt is higher nominal GDP driven by productivity, innovation, and corporate profitability. Ironically, if AI driven productivity accelerates even modestly, it improves the debt math substantially by expanding the denominator faster than pessimists assume. The market understands that. Doom narratives about debt have existed for 20+ years while U.S. equities, earnings, innovation leadership, and global capital dominance continued compounding anyway.

The other argument is there is productivity gain at my individual level because I do not have to pay for using the LLMs but is there productivity gain at the aggregate level, after taking into account all the data center / cloud infrastructure buildouts, especially when all the elements going into the infrastructure are priced at stratospheric level? I do not know how I can say there is productivity gain when the cost of the gain is so high. (We have not figured out white color labor force displacement, which is indicated at least by unemployment of fresh STEM graduates. What are they going to retrain themselves into? Tell them to get an MBA?)

I am sure you will agree that creating narratives based on stock prices can be no more than entertaining story telling in the long run. My guess is, we will know the true cost / benefits on the other side of a washout, and at that time, there will be plenty of time to make money of this new phenomenon.

I have not watched this clip yet (plan to on walk later in the evening). Even though I do not invest based on his forecasts / musings (neither does his firm), I listen to what he has to say -

 

[Anitya]

@stefansm, do you use certain spread levels as an indication of risk on-off or simply the slope of the graph? Do you also use daily chart or only weekly chart for this purpose ( max reading in the chart for the war is 3.4 which is not much different from the 3.2 in later part of 2025).

I see Dick's point that for fast trading, Price (rather than Spread) could preserve more capital but I see the potential for more whipsaws with Price, unless there is a structural change in interest rates. May be it boils down to, do I want to guard against less frequently occurring events or more frequently occurring events?

 

[marget]

Hey! STOCKS might go up forever! When one assumes current hyperscaler growth % will go on forever, it rains sugar-plums and candy canes. And TREASURY has decades of easy borrowing before it. But that doesn't mean various bondish CEFs can't go down a buck or more.
Regards, Dick

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stocks only go UP UP UP
it's the way it is.......if they ever went down permanently..........the whole dream gets destroyed

 

[Steelpony]

Hey! STOCKS might go up forever! When one assumes current hyperscaler growth % will go on forever, it rains sugar-plums and candy canes. And TREASURY has decades of easy borrowing before it. But that doesn't mean various bondish CEFs can't go down a buck or more.
Regards, Dick

I think stocks driven by AI will go up “my forever”. Remember the early days of the internet? Irrational exuberance.

Short term market movements are unknowns, out of ones control and not rational. Why all the fuss. Most have seen this many times before.