The Money Man Behind Rick Santorum: Who Is Foster S. Friess?
Savings Experiment: Snow Removal
"When it comes to bond managers, you won't find better than Bill Gross, founder and Managing Director of Pacific Investment Management Company (PIMCO)," asserts Amy Calistri.
The editor of The Daily Paycheck explains, "Gross is considered the world's foremost fixed income authority. And when you own the PIMCO Corporate Income Fund (PCN), you tap into his expertise and enviable track record.
She continues, "Since its inception in December 2001, the fund has enjoyed an average annual return of +11.3%. And Gross doesn't generate those returns by holding high-risk junk bonds. The fund's portfolio has an investment-grade credit quality.
"Through careful research, he identifies high current income securities with low default and depreciation risk.
"Right now, the fund is heavily weighted in large banks and financial companies. You'll find bonds issued by well-known companies like Wells Fargo (NYSE: WFC), JPMorgan Chase (NYSE: JPM) and General Electric's (NYSE: GE) Capital Corporation.
"Mortgage and other asset-backed securities also make up about 17% of the portfolio.
"While there was a time to worry about our largest financial institutions, most of them are back to churning our stellar profits, thanks in part to historically low borrowing costs.
"The fund's average portfolio coupon rate is 7.5%. We investors receive a 9%+ yield because approximately 28% of the fund is leveraged. PCN pays a monthly distribution of $1.0625 per share.
"With an annual distribution of $1.275 per share, PCN's current yield is 9.2% ($1.275/$13.84).
"PCN has made all its distributions from income. In the fund's first fiscal quarter it generated $0.38 per share in net investment income -- more than enough to to fund a quarter's worth of distributions.
"PCN is closed-end fund, which means it can trade at a price different that its net asset value (NAV). PCN currently trades at a 2.5% premium to its NAV -- which is well below its normal premium. Its historical five-year average premium is 8.4%.
"Action to Take --> A fund with a 9.2% yield, managed by the world's fixed income guru, is a rare opportunity -- even in a market downdraft. I have added PCN to my model income portfolio."
Steven Halpern's TheStockAdvisors.com offers a free daily review of the favorite stock ideas of the nation's top financial newsletter advisors.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
