NEWPORT BEACH, Calif., April 28, 2004 (PRIMEZONE) -- PIMCO Strategic Global Government Fund, Inc. (NYSE:RCS) today released its investment performance results and statistical portfolio information for the period January 1, 2004 through March 31, 2004 (first quarter).
PIMCO Strategic Global Government Fund, Inc. ("RCS" or the "Fund") is a closed-end, intermediate-term bond fund whose primary objective is to generate a level of income higher than that generated by high-quality, intermediate-term U.S. debt securities. Pacific Investment Management Company LLC ("PIMCO"), an investment adviser with more than $394 billion of assets under management as of March 31, 2004, is responsible for managing the Fund's investment portfolio.
Investment Performance, Price and Dividend Information
The Fund's valuation and investment performance
information are as follows:
Performance for the periods ended 3/31/04
3 6 1 3 5 10
Mos Mos Year Years Years Years
(1) (1) (1)
RCS Based on Net
Asset Value (%) 2.32 4.89 8.49 10.68 9.35 8.38
RCS Based on NYSE
Share Price (%) 4.36 11.99 19.64 16.23 16.39 10.86
Lehman Intermediate
Aggregate
Index (%) 2.27 2.70 4.83 7.01 7.07 7.21
(1) Annualized
The Fund's total return investment performance is net of all fees and expenses and assumes the reinvestment of dividends.
Price Information
Pricing Date NYSE Share Price Net Asset Value
------------ ---------------- ---------------
3/31/2004 $12.72 $11.44
12/31/2003 $12.42 $11.40
3/31/2003 $11.50 $11.42
Date Premium/(Discount) to Net Asset Value
---- -------------------------------------
3/31/2004 11.19%
12/31/2003 8.95%
3/31/2003 0.70%
Dividend Information
Regular monthly dividend per share: $ 0.074
Total dividends declared in the quarter: $ 0.222
Annualized dividend yield at 3/31/2004 based on
NYSE share price: 6.98%
Annualized dividend yield at 3/31/2004 based on
net asset value: 7.76%
Portfolio Statistics
The Fund's investment portfolio had the following
characteristics as of March 31, 2004:
Net Assets: $409.3 million
Average Duration: 2.6 years
Average Maturity: 2.0 years
Quality Ratings: 81% AAA, -1% AA, 1% A, 8% BAA, 4% BA,
5% B, 2% less than B
Average Quality: AAA
Sector Weightings: 97.2% Mortgage-Backed (63.5% FNMA, 11.7%
FHLMC, 8.0% GNMA, 14.0% Other), 11.7%
Emerging Markets (2.9% Brazil, 2.3%
Mexico, 2.0% Russia, 1.7% Peru, 1.2%
Ecuador, 0.9% Panama, 0.4% Malaysia, 0.3%
Chile), 5.1% Cash and Equivalents, 2.0%
Non-U.S., -16.0% U.S. Treasury/ Agency.
% Leverage (3/31/04): 23.1% (The Fund's use of leverage is
subject to change at any time.)
Market Commentary
During the first quarter, the Fund's investment portfolio of mortgage-backed securities and emerging market bonds posted a 2.32% return based on net asset value and a 4.36% return based on its NYSE share price. In comparison, the Lehman Brothers Intermediate Aggregate Bond Index (which includes Treasury, investment-grade corporate, and residential mortgage-backed securities) returned 2.27% for the same period. The Fund maintained an uninterrupted and constant dividend throughout the quarter, holding the monthly per share rate steady at $0.074. These dividend payouts equate to an annualized dividend yield of 6.98% based on the Fund's NYSE trading price as of March 31, 2004.
Mortgages continued to rebound from their summer 2003 lows as strong demand from both non-U.S. investors and domestic financial institutions helped sustain the sector. As a result, mortgages outperformed Treasuries and corporates on a like-duration basis during the first quarter 2004.
Banks bought approximately $80 billion worth of mortgages during the quarter as they were drawn to mortgages' attractive yields versus that of Treasuries. These purchases were a key factor in driving mortgage prices higher during the first quarter. The lending environment was sluggish during the quarter, as banks added large quantities of mortgages to their balance sheet in lieu of making business loans.
Despite the strong demand from the banking sector, refinancing concerns caused mortgages to slightly lag Treasury bonds towards the end of the quarter. Prepayments, defined as early repayments on mortgage bonds, began to accelerate in March as the decline in bond yields spurred consumers to refinance their home loans. Since unexpected changes in prepayments can hurt returns on bonds backed by home loans, the fall in yields negatively impacted the sector. Despite the decline in rates and the resulting refinancings, bank demand helped the sector to perform strongly over the course of the whole quarter.
Security performance within the market was mixed. High coupon mortgages outperformed discount issues, as banks preferred the higher yields and relatively short durations of higher coupon issues. As a result, these issues became richly valued relative to the overall mortgage universe. High coupon performance lagged late in the period when rates fell and prepayments started to rise. Conversely, lower coupon mortgage pass-throughs outperformed higher coupons in March, as investors preferred the prepayment protection of these issues.
Ecuador was among the best performing credits in the emerging markets universe, returning 12.9% for the quarter. Positive economic results, continued progress under the IMF program, and higher oil prices combined to provide a positive backdrop for the credit. Moody's upgraded Ecuador's long-term debt to Caa2 in February.
Brazil was a poor performer, losing 0.9% for the quarter. Political noise and the exiting of leveraged tactical investors in the asset class largely drove the sell-off during the period.
For further information, please contact Jeff Sargent, PIMCO Strategic Global Government Fund, Inc., at (949) 720-4712.
Past performance is no guarantee of future results. Investment return, dividend rate and share price will fluctuate so that shares, when sold, may be worth more or less than their original cost.