NEWPORT BEACH, Calif., April 30, 2002 (PRIMEZONE) -- PIMCO Strategic Global Government Fund, Inc. (NYSE:RCS) today released its investment performance results and statistical portfolio information for the period January 1, 2002, through March 31, 2002 (first quarter).
PIMCO Strategic Global Government Fund, Inc. ("RCS" or the "Fund") is a closed-end, intermediate-term bond fund that invests principally in investment-grade government securities of the United States and other countries. The primary investment objective of the Fund is to generate over time 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 $253.7 billion of assets under management as of March 31, 2002, 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:
Total Return Investment Performance
Periods Ended Based on Based on
3/31/02 NYSE Share Price Net Asset Value
First quarter 5.59% 3.97%
One year 14.47% 11.85%
Three years (annualized) 15.90% 9.84%
Five years (annualized) 10.92% 9.41%
The Fund's total return investment performance is net of all fees and expenses and assumes the reinvestment of dividends. For comparison purposes, the Lehman Brothers Intermediate Aggregate Index, a broad market measure of domestic fixed income performance, rose 0.32%, 5.75%, 6.69% and 7.34% for the three months, one year, three years and five years ended March 31, 2002, respectively (3 and 5 year numbers are annualized).
Price Information
Pricing Date NYSE Share Price Net Asset Value
March 31, 2002 $10.97 $11.23
December 31, 2001 $10.60 $11.02
March 31, 2001 $10.50 $11.00
Premium/(Discount) to Net Asset Value
March 31, 2002 -2.32%
December 31, 2001 -3.81%
March 31, 2001 -4.55%
Dividend Information
Regular monthly dividend per share: $ 0.074
Total dividends declared in the quarter: $ 0.222
Annualized dividend yield at 3/31/02
based on NYSE share price: 8.09%
Annualized dividend yield at 3/31/02
based on net asset value: 7.91%
Portfolio Statistics
The Fund's investment portfolio had the following characteristics as of March 31, 2002:
Net Assets: $384.0mm
Average Duration: 4.67 years
Average Maturity: 5.68 years
Quality Ratings: 80% AAA, 0% AA, 0% A, 4% BBB, 15% BB, 0% B, 1%
less than B
Average Quality: AAA
Sector Weightings: 97% Mortgage-Backed (79% FNMA, 9% GNMA, 8%
FHLMC, 1% Other), 1% Corporate, 10% Emerging
Markets, 8% Cash and Equivalents, -15% U.S.
Treasury/Agency, -1% Foreign
Market Commentary
Signs of recovery and expectations of central bank tightening led to rising interest rates and negative returns across most sovereign markets in the first quarter. The U.S. Federal Reserve and the Bank of England laid the groundwork for raising rates by shifting to a neutral bias toward their respective economies. The European Central Bank kept rates on hold, watching for signs of recovery and wary of inflation, which remained stubbornly above its 2% target. Japan was an exception to these trends, as the Bank of Japan stepped up purchases of government bonds to boost liquidity and reflate the economy.
The U.S. was among the worst performing bond markets over the quarter as investors anticipated a takeback of Fed rate cuts delivered in the aftermath of September 11th. An upturn in industrial production, resilient consumer confidence and a strong housing market encouraged this view. Intermediate yields rose between 0.50% and 0.70%, while longer-term yields rose between 0.30% and 0.35%.
Elsewhere in the dollar bloc, Canadian government bonds significantly lagged their G-7 counterparts. Bond investors anticipated that a pick up in the global economy would spur Canada's central bank to raise rates more aggressively than the Fed. Australian bonds struggled as the robust Aussie economy fueled concern about a central bank rate hike. Despite the Reserve Bank of New Zealand's decision to raise rates 0.25%, Kiwi bonds rose 0.55% as investors sought their relatively attractive yields.
Core European bonds slightly outperformed Treasuries over the quarter. Eurozone yields generally rose less than their U.S. counterparts, except among 2- to 5-year maturities. While the economies of the 12-member euro region remained stagnant, there were signs of a rebound. Leading indicators and business confidence measures from the Eurozone's three largest economies suggested that the worst of the recession was over. Eurozone inflation remained above the ECB's 2% mandate for the 21st consecutive month. Only in recession-afflicted Germany and Austria was inflation below 2%. The euro weakened about 2% versus the U.S. dollar during the quarter amid expectations of faster U.S. growth.
Yields on U.K. bonds with maturities between two and thirty years increased 0.20% to 0.35% over the quarter. Weak performance resulted from investors anticipating that the Bank of England would tighten as global recovery boosted demand in the U.K. manufacturing sector.
Japan's relatively low yields were little changed as the world's second largest economy remained firmly locked in its third recession over the past ten years. The Bank of Japan moved to increase liquidity and counter ongoing deflation during the quarter through increased government bond purchases. The yen depreciated modestly versus the U.S. dollar during the quarter as market participants doubted that Japan would participate in the global recovery.
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.