Evaluating PIMCO Municipal Income Fund III as an investment, I find its current market price less attractive due to modest past performance. Despite a 5.8% discount to NAV, PMX's valuation has narrowed since 2024, indicating the underlying securities are not holding up well. The fund's weak performance amidst higher-yielding alternatives like CDs and treasuries suggests limited upside potential.
PMX And HTD: Providing Tax-Advantaged Income
The article evaluates the PIMCO Municipal Income Fund III (NYSE: PMX) as an investment option in the muni space. PMX has a wide discount to NAV and is markedly cheaper than its sister funds from PIMCO. This CEF has decent income metrics and offers a nice yield on a tax-adjusted basis for high income individuals.
PIMCO Municipal Income Fund III is evaluated as an investment option. At first glance, this fund offers value compared to PIMCO's other national muni CEF offerings. The fund is long on Texas muni bonds, which I view favorably for their strong credit rating and diversification benefits. Munis will see renewed interest if the tax cuts from the 2017 TCJA are not extended this year. That is a fundamental tailwind for the sector.
PMX has seen a sharp drop in share price since my last review, offering investors a much more attractive buy-in opportunity today. The valuation of PMX has improved, with the current market price representing a discount to NAV. Munis remain a reasonable equity hedge, which I believe is relevant given that September tends to see negative returns for stocks.