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UNII Report

Municipal Income Fund II

PML

Updated April 18, 2024

UNII Report

Objective

Seeks current income exempt from federal income tax.

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Overview

PRESS RELEASES

Fund Overview

A tax-sensitive approach to investing can provide tangible advantages to investors seeking current income, especially those in higher tax brackets. Investing primarily in a portfolio of municipal bonds, the fund seeks to provide current income exempt from federal income tax.

Under normal circumstances, the fund will invest at least 90% of its net assets in municipal bonds which pay interest that 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). 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.

The fund invests at least 80% of its net assets in municipal bonds that at the time of investment are investment grade quality (Baa or higher by Moody’s Investors Service, Inc. (“Moody’s) or BBB or better by S&P Global Ratings (“S&P”) or Fitch, Inc. (“Fitch”)), or bonds that are unrated but determined to be of comparable quality by PIMCO. The fund may invest up to 20% of its net assets in municipal bonds that are, at the time of investment, rated Ba/BB or B by Moody’s, S&P or Fitch or lower or that are unrated but judged to be of comparable quality by PIMCO.

The portfolio manager also aims to preserve and enhance the value of the fund’s holdings relative to the municipal bond market, generally, using proprietary analytical models that test and evaluate the sensitivity of those holdings to changes in interest rates and yield relationships.

PIMCO is qualified to respond to recent changes in the municipal bond market, with an extensive network of credit research capabilities to address concerns about creditworthiness, which is critical to municipal bond investing. Additionally, PIMCO has the market presence to provide access to the new issue and secondary markets.

ASSET CLASS
  • Fixed Income
  • Municipals
CUSIP

72200W106

IPO Market Price

$15.00

IPO NAV

$14.32

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Managers

David Hammer

Portfolio Manager

View Profile for David Hammer

Kyle Christine

Portfolio Manager, Municipal Bonds

View Profile for Kyle Christine

Distributions

Historical Prices & Distributions

Daily Distribution Rates

as of 04/18/2024
Daily NAV Distribution Rate 5.46%
Daily Market Price Distribution Rate 5.70%
Daily Taxable Equivalent Distribution Rate 9.64%

Distribution Rates

as of 03/31/2024
NAV Distribution Rate 5.37%
Market Price Distribution Rate 5.58%
Taxable Equivalent Distribution Yield 9.42%

Distributions

Latest Distribution ($ / Share) as of 04/10/2024 $0.039500
Distribution (YTD)1 as of 04/10/2024 $0.158000

disclosures

1Data is based on distributions since the most recent calendar year end and does not include special cash dividends.
Distribution rates are not performance and are calculated by annualizing the most recent distribution per share and dividing by the NAV or Market Price as of the reported date. Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital (ROC) of your investment in the fund. Because the distribution rate may include a ROC, it should not be confused with yield or income. A negative value for Undistributed Net Investment Income represents the potential for a ROC on an estimated tax basis. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the composition of distributions. Final determination of a distribution’s tax character will be made on Form 1099 DIV sent to shareholders each January.

It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the fund may not issue a Section 19 Notice in situations where the fund’s financial statements prepared later and in accordance with U.S. GAAP or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please see the fund’s most recent shareholder report for more details.
Taxable equivalent distribution yield is the distribution yield on a taxable investment that results in an after-tax distribution yield equal to that of the fund. Due to taxable income and other factors, the actual taxable equivalent distribution yield may be lower than shown. Municipal bond fund shareholders may incur a federal, state and/or local tax liability, including Alternative Minimum Tax, due to income and gains from certain fund investments. Please read the most recent shareholder report to learn more about the effect of taxes. The rate shown is based on federal tax rate of 40.80% (Federal tax of 37.00% and Medicare Tax Rate of 3.80%). The Medicare Tax is not applicable for taxpayers with Modified Adjusted Gross Income below $200,000 (single filing status status), $250,000 (married filing status) and $125,000 (married filing separately status).

Fees & Expenses

Management Fee 0.69%
Total Expense Ratio (excluding interest expense)2 1.22%
Total Expense Ratio (including interest expense)2 2.28%

disclosures

2Expense ratios are calculated as a percentage of common net assets, and are as of the most recent annual report. Total expense ratio (excluding interest expense) excludes certain investment expenses, such as expenses from borrowings and repurchase agreements, any dividends and other costs paid on preferred shares issued by the Fund, and dividend expenses from investments on short sales.

Prices & Performance

Daily Statistics

All data as of 04/18/2024

NAV $8.68 Market Price $8.31
Daily Change $0.00 Daily Change $-0.09
One Day Return 0.00% One Day Return -1.07%
Premium / Discount -4.26%

All data as of

All data as of

Click here to view the Price and Performance for all Closed-End Funds

Calendar Year Returns %

All data as of

Fund Pricing

(Since Inception) All data as of 04/18/2024

High/Low Ranges - One Year

All data as of 04/18/2024

High/Low NAV $9.08/$7.61
High/Low Market Price $9.30/$6.99

disclosures

Past performance is not a guarantee or a reliable indicator of future results. An investment in the fund involves risk, including loss of principal. Investment return and the value of shares will fluctuate. Shares may be worth more or less than original purchase price. Due to market volatility, current performance may be lower or higher than average annual returns shown. Returns are calculated by determining the percentage change in NAV or market price (as applicable) in the specific period. The calculation assumes that all dividends and distributions, if any, have been reinvested. NAV and market price returns does not reflect broker sales charges or commissions in connection with the purchase or sales of Fund shares and includes the effect of any expense reductions. Returns for a period of less than one year is not annualized. Returns for a period of more than one year represents the average annual return. Performance at market price will differ from results at NAV. Although market price returns typically reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the fund, market conditions, supply and demand for the fund’s shares or changes in fund dividends and distributions.
Daily YTD return is from the most recent calendar year end.

Portfolio Composition

All data as of unless otherwise stated

Call Structure Market Value %

0 - 5 Years 37.33
5 - 10 Years 46.30
10 - 15 Years 0.39
Non Callable 15.98

Maturity %

0-1 yrs 2.00
1-3 yrs 7.03
3-5 yrs 9.71
5-10 yrs 28.49
10-20 yrs 25.35
20+ yrs 27.42
Effective Maturity (yrs) 13.80

Top States Market Value %

Texas 14.79
New York 13.12
Other 7.83
Illinois 7.17
Arizona 5.58

Duration in Years

Total Leveraged-Adjusted Effective Durations (yrs.) 13.39

Sector Allocation
Market Value %3

State/Local GO 13.04
Pre-Refunded 0.46
Education Rev. 4.69
Hospital Rev. 15.62
Housing Rev. 3.30
Ind Dev/Pollution Ctrl 14.72
Lease Rev. 8.73
Power Rev. 4.70
Resource Recovery 0.70
Special Tax 11.95
Transportation 10.82
Water & Sewer 4.95
Tobacco 2.55
Net Other Short Duration Instruments Muni 0.00
Other Muni 0.82
US Government Related 0.00
Mortgage 1.00
Invest. Grade Credit 0.00
High Yield Credit 0.00
Non-USD Developed 0.00
Emerging Markets 0.00
Other 0.04
Net Other Short Duration Instruments ex-Muni 1.92

disclosures

3For information as of October 31, 2015 and hereafter, the Sector Allocation MV% shown reflects exposures gained through the use of interest rate swaps at the market value of the swaps. Such exposures were reflected at the notional amount of the swaps for prior periods. As a result, this change may have the effect of reflecting lower exposures for one or more sectors and correspondingly higher exposures for other sectors than has or would be shown using the prior method.
Duration is a measure of the fund's price sensitivity to changes in interest rates expressed in years.
Total Leverage -Adjusted Duration represents the Fund’s effective portfolio duration taking into account its use of leverage, including both portfolio leverage (e.g., reverse repos, credit default swaps, and tender option bonds), and any structural leverage, such as auction-rate preferred shares, if any, issued by the Fund. Effective duration is the duration for a bond with an embedded option when the value is calculated to include the expected change in cash flow caused by the option as interest rates change.
Call feature allows the issuer to “call” or repurchase certain securities before maturity, at a specified price and/or point in time.

Assets & Leverage

All data as of 03/31/2024 unless otherwise stated

Click here for ARPS Max Rate

Assets (in millions)

Common Net Assets $587
Outstanding Preferred Shares4 $364
Total Managed Assets5 $958

Leverage

% of Total Managed Assets % of Common Net Assets
Total Effective Leverage 38.77 63.31
Preferred Shares6 37.98 62.02
Reverse Repurchase Agreements7 0.00 0.00
Floating Rate Notes Issued8 0.79 1.29
Credit Default Swaps9 0.00 0.00

disclosures

4Outstanding preferred shares consist of Auction Rate Preferred Shares (ARPS) and Variable Muni Preferred Shares (VMTP) outstanding multiplied by the liquidation preference of $25,000 and $100,000, respectively.
5Total Managed Assets include Net Assets Applicable to Common Shareholders ("Common Net Assets") + Preferred Shares + Reverse Repurchase Agreements + Credit Default Swaps + Floating Rate Notes Issued in Tender Option Bond ("TOB") transactions, as applicable. In TOB transactions, a fund sells a fixed rate municipal bond to a broker who places that bond in a Special Purpose Trust from which Floating Rate Notes and Inverse Floaters are issued.
6Preferred Shares (%) consists of Preferred Shares divided by Total Managed Assets.
7Reverse Repurchase Agreements (%) consists of Reverse Repurchase Agreements divided by Total Managed Assets.
8Floating Rate Notes Issued (%) consists of Floating Rate Notes Issued in transactions divided by Total Managed Assets. In TOB transactions, a fund sells a fixed rate municipal bond to a broker who places that bond in a Special Purpose Trust from which Floating Rate Notes and Inverse Floaters are issued.
9Credit Default Swaps (“CDS”) (%) consists of the aggregate notional amount of sell protection CDS plus the net market value of buy protection CDS, as applicable, divided by Total Managed Assets.
Past performance is no guarantee of future results. Investing in securities entails risk, including possible loss of principal. The use of leverage may cause a Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. The use of leverage may cause a Fund to be more volatile, which may increase the risk of investment loss.

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RELATED

MUNIS IN FOCUS

Municipal Market Outlook

READ MORE >

Visit pimco.com/munis

Our central hub for Muni content and investments

LEARN MORE

Disclosures

A word about risk:

The value of most bond funds and fixed income securities are impacted by changes in interest rates. Bonds and bond funds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax; a strategy concentrating in a single or limited number of states is subject to greater risk of adverse economic conditions and regulatory changes. The use of leverage may cause a portfolio to liquidate positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leverage, including borrowing, may cause a portfolio to be more volatile than if the portfolio had not been leveraged. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested.
As with any stock, the price of the fund’s common shares will fluctuate with market conditions and other factors. Shares of closed-end management investment companies frequently trade at a price that is less than (a “discount”) or more than (a “premium”) from their net asset value. If the fund’s shares trade at a premium to net asset value, there is no assurance that any such premium will be sustained for any period of time and will not decrease, or that the shares will not trade at a discount to net asset value thereafter. Additionally, the fund's distribution rate may be affected by numerous factors, including changes in realized and projected market returns, fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the fund distribution rate at a future time.

The information relating to the Fund presented on this website has not been audited and may be calculated and presented differently from similar information (such as representations of portfolio composition, assets and leverage and other data) included in the Fund's shareholder reports and other sources.
Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering, shares are sold on the open market through a stock exchange. Closed-end funds may be leveraged and carry various risks depending upon the underlying assets owned by a fund. Investment policies, management fees and other matters of interest to prospective investors may be found in each closed-end fund annual and semi-annual report. For additional information, please contact your investment professional. For additional information, contact your financial advisor or call 1-844-337-4626.
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 LLC in the United States and throughout the world.
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