NRGX Stock

PIMCO is converting the PIMCO Energy & Tactical Credit Opps closed-end fund from an energy MLP stock fund to a multi-sector bond/credit fund to narrow the discount-to-NAV. The NRGX fund currently trades at a discount of 11.42% compared to the average multisector credit fund discount of 3.4%. By combining the long position with short exposure, the potential return is isolated and independent from market/sector returns.

Longer-term bonds are becoming more attractive to institutional investors as yields catch up to shorter-term paper. The NRGX fund experienced an NAV boost due to liquidation of a large private equity position. PIMCO is converting NRGX from a mostly energy and energy MLP stock fund to a multi-sector bond/credit fund, offering attractive valuation and potential for increased distributions.

PIMCO's Tactical Credit Opportunities Fund is changing its investment mandate to focus on multi-sector credit with a reduced allocation to energy assets. The fund will be renamed the "Dynamic Income Strategy Fund" (PDX). The change in the structure, fee reduction, and other factors should lead to a partial valuation convergence with the rest of the PIMCO taxable CEF suite.

2 out of 22 CEF sectors positive on price and 1 out of 22 sectors positive on NAV. PIMCO Energy & Tactical Credit Opps will change its investment policy to a multisector fixed income fund. This will likely provide a tailwind to the NRGX fund's premium/discount valuation.

The PIMCO Energy & Tactical Credit Opps is transitioning from an energy equities closed-end fund to a credit fund. The fund will change its name to PIMCO Dynamic Income Strategy Fund and reduce its focus on energy investments. The move is expected to narrow the fund's discount to net asset value and align it with other PIMCO credit funds.