How Will New PIMCO Management Affect MTS Fund?

On July 8, Montgomery Street Income Securities Fund (MTS) held its 2010 annual stockholders meeting and the shareholders approved the new investment advisory agreement with Pimco. They also revised the Fund’s investment policies which has allowed the fund managers to restructure the bond portfolio.

A few weeks ago, the fund declared a dividend of $0.22 a share payable on July 30. The increased dividend (up from $0.16 a share) reflects the restructuring of the portfolio. It is anticipated that all distributions paid in 2010 will be ordinary income and not return of capital which will help to maintain the net asset value of the fund.