We owned this fund years ago before it was bought by PIMCO. It was called Strategic Global Government Fund, symbol SGL. It was a very good fund for us, but we eventually redeployed the money. It was, as I recall, a foreign bond and currency fund, and was trying to use a lot of swaps and hedges instead of owning all bonds, a very arcane strategy at the time.

Now it is 2/3 gov't/agency mortgages with premium coupons. The premium coupons account for the large yield. They average about 6-6.5%. The problem is that they should get refied and bleed off. It has already happened as many of their holdings are small remnant pieces.

We hold AGNC which has the same holdings, but is more leveraged. It is selling for about 90% of book, while RCS is selling for 132% of NAV (book). We are thinking about shorting this to lock in yield and spread against what we feel is an inevitable fall by RCS. Only an idiot would pay 1.32 for a dollars worth of bonds. They could just go buy 132 shares worth of a PIMCO openend mutual fund for the same money as 100 shares of this (adjusted, of course, for share price differences). Is the brand name and a good track record worth 32%? Soliciting others thoughts here.