- Last Ratings Update:07/31/2014
- Price as of 07/31/2014 :$28.23
- Net Assets:$426.56 Million
- Peer Rank:79 of 221
- Investment Rating:C
We rate Pimco Income Opportunity Fund at C. This overall rating indicates it is among the top 10% of all closed end funds in its peer group. Positive factors that influence this rating include a greater than above average total return and low price volatility. The fund invests approximately 94% of its assets in bonds and may be considered for investors seeking a Global Income strategy.
POSITIVES AND RISKS
Total return ranks above peers over the last three years. The Pimco Income Opportunity Fund has returned an annual rate of 12.60% since inception. More recently, the fund has generated a total return of 18.24% in the last five years, 12.29% in the last three years, and 13.29% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 89% of them. It has also outpaced 60% of its competitors on a three year basis and 61% of them over the last year for the period ending 7/31/2014. On a year to date basis, PKO has returned 2.64%.
Downside risk has been below average. PKO has a draw down risk of -16.93%, which is the largest price decline experienced over the last three years. This fund has a three year standard deviation of 13.0%. This fund has had moderate volatility in its monthly performance over the last 36 months. As of 7/31/2014, the fund was trading at a price of $28.23, which is 3.6% below its 52-week high of $29.28 and 0.1% above its 52-week low of $28.21.
High expense ratio hinders performance. On total assets of $426.56 million, PKO maintains a high expense ratio compared to its Global Income peers of 1.93% to cover all operating costs. Brokerage costs for the fund to buy and sell shares are not included in the expense ratio. As PKO is a closed end fund, it has no front end or back end load.
Manager tenure and performance record are net positives. Substandard fund managers tend to be replaced, so a long tenure is usually a good sign that a fund is achieving its objectives. The Pimco Income Opportunity Fund has been managed by Daniel J. Ivascyn for the last 7 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than 98% of other fund managers.
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