- Last Ratings Update:01/31/2014
- Price as of 01/31/2014 :$28.96
- Net Assets:$426.56 Million
- Peer Rank:23 of 209
- Investment Rating:B-
We rate Pimco Income Opportunity Fund at B-. This overall rating indicates it is among the top 10% of all closed end mutual funds in its peer group. Positive factors that influence this rating include a well 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 very high in comparison with peers over the last three years. The Pimco Income Opportunity Fund has returned an annual rate of 13.42% since inception. More recently, the fund has generated a total return of 22.07% in the last five years, 14.44% in the last three years, and 6.15% in the last year. How does that compare to other equity funds? In the last five years, it has outperformed 85% of them. It has also outpaced 86% of its competitors on a three year basis and 59% of them over the last year for the period ending 1/31/2014. On a year to date basis, PKO has returned 2.51%.
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 13.7%. This fund has had moderate volatility in its monthly performance over the last 36 months. As of 1/31/2014, the fund was trading at a price of $28.96, which is 0.5% below its 52-week high of $29.11 and 3.6% above its 52-week low of $27.96.
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 6 years. Over that period, the manager was able to capture more actual gains in excess of the expected return than 97% of other fund managers.
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