Investment
PIMCO Municipal Closed-End Funds Announce Changes to Non-Fundamental Investment Policies – GlobeNewswire
NEW YORK, Dec. 04, 2020 (GLOBE NEWSWIRE) — PIMCO California Municipal Income Fund (NYSE: PCQ), PIMCO California Municipal Income Fund II (NYSE: PCK), PIMCO California Municipal Income Fund III (NYSE: PZC), PIMCO Municipal Income Fund (NYSE: PMF), PIMCO Municipal Income Fund II (NYSE: PML), PIMCO Municipal Income Fund III (NYSE: PMX), PIMCO New York Municipal Income Fund (NYSE: PNF), PIMCO New York Municipal Income Fund II (NYSE: PNI) and PIMCO New York Municipal Income Fund III (NYSE: PYN) (each a “Fund” and, together, the “Funds”) announced that, effective February 2, 2021, each fund will revise its non-fundamental investment policies such that each Fund (i) may invest up to 20% of its total assets in securities that generate income subject to the federal alternative minimum tax (“AMT Bonds”) (the “AMT Policy Revision”) and (ii) may invest up to 20% of its net assets in municipal bonds that are rated Ba or B or lower by Moody’s Investors Service, Inc. (“Moody’s”) or BB or B or lower by S&P Global Ratings (“S&P”) or Fitch, Inc. (“Fitch”), or that are unrated but determined to be of comparable quality by PIMCO Investment Management Company, LLC (“PIMCO”) (the “Lower-Rated Investments Policy Revision”), as described in further detail below.
Each Fund will effect the AMT Policy Revision by amending and restating its non-fundamental investment policies as follows, effective February 2, 2021:
| Fund | Current Policy | Amended Policy Effective February 2, 2021 | |
| PCQ, PCK and PZC | Under normal market conditions, the Fund will invest substantially all (at least 90%) of its net assets in municipal bonds which pay interest that, in the opinion of bond counsel to the issuer (or on the basis of other authority believed by the Fund’s portfolio manager to be reliable), is exempt from federal and California income taxes. The Fund will [at all times]1 seek to avoid bonds generating interest potentially subjecting individuals to the alternative minimum tax. | Under normal circumstances, the Fund will invest at least 90% of its net assets in municipal bonds which pay interest that, in the opinion of bond counsel to the issuer (or on the basis of other authority believed by the Fund’s portfolio manager to be reliable), is exempt from regular federal and California income taxes (i.e., excluded from gross income for federal and California income tax purposes but not necessarily exempt from the federal alternative minimum tax). Subject to its other investment policies, the Fund may invest up to 20% of its total assets in investments the interest from which is subject to the federal alternative minimum tax. | |
| PMF, PML and PMX | Under normal market conditions, the Fund expects to be fully invested (at least 90% of its net assets) in tax-exempt municipal bonds. The Fund will [at all times]1 seek to avoid bonds generating interest potentially subjecting individuals to the alternative minimum tax. | Under normal circumstances, the Fund expects to invest at least 90% of its net assets in municipal bonds which pay interest that, in the opinion of bond counsel to the issuer (or on the basis of other authority believed by the Fund’s portfolio manager to be reliable), is exempt from regular federal income taxes (i.e., excluded from gross income for federal income tax purposes but not necessarily exempt from the federal alternative minimum tax). Subject to its other investment policies, the Fund may invest up to 20% of its total assets in investments the interest from which is subject to the federal alternative minimum tax. | |
| PNF, PNI and PYN | Under normal market conditions, the Fund will invest substantially all (at least 90%) of its net assets in municipal bonds which pay interest that, in the opinion of bond counsel to the issuer (or on the basis of other authority believed by the Fund’s portfolio manager to be reliable) is exempt from federal, New York State and New York City income taxes. The Fund will [at all times]1 seek to avoid bonds generating interest potentially subjecting individuals to the alternative minimum tax. | Under normal circumstances, the Fund will invest at least 90% of its net assets in municipal bonds which pay interest that, in the opinion of bond counsel to the issuer (or on the basis of other authority believed by the Fund’s portfolio manager to be reliable) is exempt from regular federal, New York State and New York City income taxes (i.e., excluded from gross income for federal, New York State and New York City income tax purposes but not necessarily exempt from the federal alternative minimum tax). Subject to its other investment policies, the Fund may invest up to 20% of its total assets in investments the interest from which is subject to the federal alternative minimum tax. |
Each Fund will effect the Lower-Rated Investments Policy Revision by amending and restating its non-fundamental investment policies as follows, effective February 2, 2021:
| Fund | Current Policy | Amended Policy Effective February 2, 2021 | |
| PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI and PYN | The Fund may invest up to 20% of its net assets in municipal bonds that are rated Ba/BB or B or that are unrated but judged to be of comparable quality by the Fund’s portfolio manager. | The Fund may invest up to 20% of its net assets in municipal bonds that are rated Ba/BB or B or lower or that are unrated but determined to be of comparable quality by PIMCO. |
PIMCO, each Fund’s investment manager, recommended the proposed changes to the Fund’s Board of Trustees as being in the best interests of each Fund. PIMCO believes these policy revisions will provide each Fund with the increased flexibility to invest in AMT Bonds and non-investment grade securities and accordingly, greater access to potentially attractive investment opportunities.
Investments by the Funds in AMT Bonds may expose the Funds to certain risks in addition to those typically associated with municipal bonds. Interest or principal on AMT Bonds paid out of current or anticipated revenues from a specific project or specific asset may be adversely impacted by declines in revenue from the project or asset. Declines in general business activity could also affect the economic viability of facilities that are the sole source of revenue to support AMT Bonds. In this regard, AMT Bonds may entail greater risks than general obligation municipal bonds. For shareholders subject to the federal alternative minimum tax, a portion of a Fund’s distributions may not be exempt from gross federal income, which may give rise to alternative minimum tax liability.
Investments by the Funds in lower-rated securities, including high yield securities, may cause the Funds to be exposed to increased risks associated with such securities, including but not limited to, an issuer’s inability to make timely principal and interest payments and higher risk of default. Lower-rated securities may fluctuate more widely in price and yield and may fall in price during times when the economy is weak or is expected to become weak. These securities also may require a greater degree of judgment to establish a price and may be difficult to sell at the time and price a Fund desires. Issuers of securities that are in default or have defaulted may fail to resume principal or interest payments, in which case a Fund may lose its entire investment. The creditworthiness of issuers of these securities may be more complex to analyze than that of issuers of investment grade debt securities, and the overreliance on credit ratings may present additional risks. In addition to the risks inherent in lower-rated securities, for purposes of weekly asset coverage testing required for the Funds’ outstanding auction rate preferred shares, the lower-rated securities may be discounted more than higher-rated securities.
A discussion of the Funds’ investment strategies and associated risks will be included in the Funds’ next annual report to shareholders for the year ending December 31, 2020.
The Funds’ daily New York Stock Exchange closing market prices, net asset values per share, as well as other information, including updated portfolio statistics and performance are available at pimco.com/closedendfunds or by calling the Funds’ shareholder servicing agent at (844) 33-PIMCO. Updated portfolio holdings information about a Fund will be available approximately 15 calendar days after such Fund’s most recent fiscal quarter end, and will remain accessible until such Fund files a Form N-PORT or a shareholder report for the period which includes the date of the information.
About PIMCO
PIMCO was founded in 1971 in Newport Beach, California and is one of the world’s premier fixed income investment managers. Today we have offices across the globe and 2,800+ professionals united by a single purpose: creating opportunities for investors in every environment. PIMCO is owned by Allianz S.E., a leading global diversified financial services provider.
Except for the historical information and discussions contained herein, statements contained in this news release constitute forward-looking statements. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO’s sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2020, PIMCO
1 The bracketed language does not apply to PCQ, PMF or PNF.
Some stock market trading activity has looked an awful lot like gambling as of late.
Getty Images
Some stock market trading activity has looked an awful lot like gambling as of late, with huge run-ups in companies that have shown little actual evidence of profits, or in some cases, sales.
Academics say there’s more in common between gambling and stocks than you might imagine. And researchers have a simple methodology for determining which stocks are gambles rather than investments.
A research paper released this month found that gambling accounted for about 14% of stock market volume in developed countries, and that stock market gambling is 3.5 times the combined gambling in casinos, lotteries, horse racing, sports betting, gaming machines, and online gambling. The U.S. and Hong Kong have the highest per capita levels of stock market gambling in the world.
The paper—from Alok Kumar of the University of Miami, Houng Nguyen of the University of Danang, and Talis Putnins at the University of Technology Sydney and Stockholm School of Economics—proposes looking at volume over market cap as a way of determining lottery stocks. “We assume that gambling in stock markets involves disproportionate amount of trading in lottery-like stocks,” they said.
Applying their methodology, Barron’s screened the
S&P 500
and
Nasdaq 100
components for volume over the last 30 days divided by market cap.
The list makes intuitive sense—a variety of travel and energy stocks, such as American Airlines Group (ticker: AAL) and
Marathon Oil
(MRO).
Broadening out the screen to any New York Stock Exchange or Nasdaq-listed company with a market capitalization of at least $500 million yields even more aggressive plays, such as cannabis stock Sundial Growers (SNDL) and genome analysis specialist
Bionano Genomics
(BNGO).
The analysis can also easily be extended across the world.
Argo Blockchain
(ARB.London) headlines the London-listed lottery stocks with market caps of at least $500 million. Solar play
GCL New Energy Holdings
(451.Hong Kong) is the biggest lottery play among Hong Kong-listed stocks.
One perhaps surprising finding from the researchers is that the stock-market gambling helps the broader market function. “Even if gamblers are relatively or completely uninformed traders, they can still contribute to market efficiency by making markets more liquid and thereby encouraging informed trading,” researchers found.
Write to Steve Goldstein at steven.goldstein@wsj.com
When it comes to money and financial assets, it’s only a thin line that separates them. Even though some people classify money as a particular type of financial asset, this, in turn, does pay back little or no interest at all. Other types of financial assets do have huge interests or returns on investments (ROI). Take for example, when you buy stocks and bonds, you would expect to get some kind of interest on it or receive dividend payments, you can even go as far as selling the stock at a very high price in the future.
Even though Bitcoin was developed with the intent of serving as an international currency, there have been changes over the year and the increase in demand for bitcoin has made it a means of investment for many people. Today, Bitcoin has turned into a high financial investment asset that can be used for different transactions.
Bitcoin which is being characterized as a means of financial investments has drawn the interest of many investors and at the same time, it has given room for financial loss. While it can be argued that the line between financial assets and money is very thin, investors’ actions generally have revealed the role asset plays in the economy.
Truly, Bitcoin price chart has really been inconsistent over the years, sometimes we experience a high run-up in price and sometimes, it is followed by some drastic crashes but checking through this chart, it has been studied that it consistently retained a large portion of its gains every time it plummets. Since the first introduction of Bitcoin, it has been the first digital asset to start the current ecosystem of cryptocurrencies. For quite a while now, investors have seen its future as a possible and replacement to the physical money we have now.
Today, the hype surrounding Bitcoin has basically been keeping it as a financial investment instead of using it as a means of payment for goods and services, You can start earning with immediate bitcoin. Jannet Yellen, who is a Former Federal Reserve said that Bitcoin is “not a stable store of value and it doesn’t constitute legal tender. It is a highly speculative asset”.
The amazing benefits Bitcoin introduced to the market cannot be over-emphasized. For one, it is a safe ecosystem for your peer-to-peer money transactions. There are little to no intermediates when it comes to Bitcoin transactions. That is why it is cost-efficient and also very fast. You can send millions of Bitcoin within a few minutes and the cost of sending this is very low compared to using fiat currency. Bitcoin has made international payments so easy in a previously unimaginable way.
If you are an investor looking to invest in bitcoin through the capital markets, then you should do that with Bitcoin Trader.Using Bitcoin Trader provides investors some certain advantages which makes an investment in bitcoin a more reliable option. For one, their system ensures a transparent trading environment through DLT technology. Also, they use trading algorithms that implement HFT trading techniques which generate profits from even the slightest market movement.
When investing in Bitcoin, you can approach it from two different scenarios:
Short Positions on Bitcoin
When there is a Bitcoin bubble (which means rise in prices of bitcoin followed by a decrease in the price), investors might bet on bitcoin decreasing in value. With this, they might decide to sell bitcoin at a certain price, and after some time, they buy it at a price lower than the selling price. Take for example, if you buy bitcoin worth $1000 and later sell it at that same rate, and you wait for bitcoin to decrease in value before buying it back. You would be buying it at a very lower price, thereby making more profits.
But you have to be careful when taking this approach, there is a high possibility that the market might move against, which might result to losing money. Before going for this, as an investor, you should have a deep knowledge about leverage and margin calls.
Long Positions on Bitcoin
With this strategy, investors want a less immediate return. They purchase bitcoin and wait till the end of a price rally before selling it. This process can be approached in so many ways, one of them is relying on the cryptocurrency’s volatility for a high rate of return, should the market move in the investor’s favor. Several bitcoin trading sites like Bitcoin Trader now exist. These platforms have provided leveraged trading. Bitcoin Trader has a trading program that conducts bitcoin trading automatically.
Final Notes
The decision to make Bitcoin a means of financial investment boils down to your appetite for risk. The price could drop drastically, going against you as an investor, and a single online hacking or hard drive crashing can wipe out your stash of Bitcoin with no compensation or repayment. You need to transact with a reliable trader!
Last year, India celebrated a milestone in its long campaign to attract foreign direct investment, crossing the $500bn mark in cumulative inflows over the past two decades. For the government, it was a welcome piece of good news and a sign that overseas interest remained undimmed. The numbers, however, obscure a less promising reality. India’s economy, hard hit by the pandemic, has fallen into recession and there are worrying signs that the government of Prime Minister Narendra Modi, far from pursuing a path of liberalisation, is turning inwards.
There are good reasons to scrutinise the supposed momentum behind the foreign investment influx. While foreign companies, including Amazon and Walmart, have gained footholds, a shifting regulatory environment has all too often sent the wrong signal to international investors. And although Silicon Valley money poured in last year, a large chunk was directed at a single company: Jio Platforms, the telecom-and-digital services arm of Mukesh Ambani’s Reliance Industries, which attracted more than $10bn from the likes of Facebook and Google.
Foreign companies may be investing but the overriding trend is still through joint ventures or by taking minority stakes in companies owned by powerful Indian entrepreneurs. James Murdoch recently reunited with Uday Shankar on a media venture. All too often, the sums involved are not large and appear to be more defensive plays than a serious attempt to commit to the Indian market.
There are longstanding concerns that Mr Modi’s government, far from being the business-friendly administration that executives had hoped for when his Bharatiya Janata party came into power has, at best, an ambivalent attitude towards foreign investment. It has proven itself to be, in essence, an economic nationalist government. Regulation has remained unpredictable and frequent policy changes, including the recent increase in import tariffs, have fostered uncertainty.
The precariousness for international investors has been exacerbated by New Delhi’s ambivalent attitude to the rule of law, in particular in reference to two corporate tax disputes, with Vodafone and Cairn Energy, which had gone to international arbitration. They stem from a decision by the previous Indian government in 2012 to change the tax code retrospectively, a move that gave it the power to claim taxes for deals struck years earlier if the underlying assets were in India. The government lost its case against Vodafone in September and against Cairn in December.
The government has since challenged the Vodafone ruling. Business expects it to do the same in the Cairn case. It is time for the government to accept the rulings. It should also make clear that it will no longer use or follow up on retroactive tax claims. Both actions would send a powerful signal that India is committed to the fair treatment of investors. Mr Modi commands strong popular support and should ignore dissenting voices that believe the government would look weak to its domestic audience.
There is a risk that the recent backlash that has greeted government proposals to modernise India’s agricultural sector might reduce the incentive to liberalise in general. This would be a shame. As western companies seek to diversify their operations from China, India has a unique opportunity to become an alternative destination for manufacturing investments. As China has shown, export-oriented manufacturing is a critical factor for economic growth. India has a valuable opportunity to signal that it is open for business.
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