Understanding the PIMCO Corporate & Income Strategy Fund (PCN)

What this ETF is trying to do

The PIMCO Corporate & Income Strategy Fund (PCN) is an ETF listed on the NYSE. This fund uses certain strategies, including options income, to manage its portfolio.

What the numbers show

When looking at an ETF, it is important to understand the difference between "price return" and "total return."

• Price Return: This only measures how much the share price has gone up or down.

• Total Return: This includes both the change in share price AND any cash distributions (dividends) paid out to investors.

For PCN, the numbers show different trends depending on how long you look:

• Year-to-Date (YTD): The price return is approximately -15.52%, while the total return is approximately -8.11%.

• One Year: The price return is approximately -19.67%, while the total return is approximately -10.30%.

• Three Years: The price return is approximately -18.15%, but the total return is positive at approximately 12.31%.

To visualize the price change, an investor's share price was estimated to be roughly $13.42 one year ago. The current price is $10.78.

Income and distribution explanation

This ETF focuses on providing cash to investors. The distribution yield is approximately 12.52%. This means the fund has paid out a significant amount of cash relative to its share price. These distributions usually happen monthly, with the most common payout day being Thursday.

It is important to remember that a high distribution yield does not mean you are earning that same amount in total return. As seen in the one-year data, even with high distributions, the total return can still be negative if the share price drops significantly.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. StockValueFinder uses an "erosion score" to measure this risk. PCN has an erosion score of 55, which is labeled as "moderate price erosion." While this indicates a moderate risk regarding price movement, it is not flagged as a "severe erosion risk."

Pros

• The fund offers a high distribution yield of approximately 12.52%.

• Over a three-year period, the total return was positive at approximately 12.31%.

Cons

• The share price has seen a decline over the last year and year-to-date periods.

• The fund shows moderate price erosion according to its erosion score.

Beginner takeaway

When looking at funds like PCN, high cash payments (yield) can be attractive, but they do not guarantee that your total investment will grow. Always look at the total return to see how much you actually gained or lost after both price changes and cash payments are combined.