The article evaluates the PIMCO Municipal Income Fund as an investment option, highlighting its use of leverage and widening discount to NAV. I suggest that the outlook for fixed-income munis is improving, despite headwinds such as inflation and a more hawkish Fed. This article emphasizes the income potential and tax advantages of munis, making a case for considering them as an investment option.
PIMCO Municipal Income Fund III: A Solid Closed-End Fund Holding
PMF has seen a strong gain in the short term. This momentum has certainly been favorable for holders, but I'm concerned about its sustainability. Leverage costs are still a headwind going into 2024 that will pressure net income earnings. However, the risk-reward proposition for PMF going into 2024 may not be favorable, and avoiding the fund may be a wise decision.
PMF: The Value Just Isn't There, Despite A Favorable Muni Backdrop.