PacMuni Funds – Actual Alcatraz Fund Distributions & NAV
Since inception, the Fund’s objective has been to generate stable and consistent Rolling 1 Year Federal and CA State Income Tax Free Distributions of 4-6%. The long-term hold strategy allows for short-term volatility in NAV performance without compromising the objective. Below Quarterly NAV and Distribution percentages are calculated from independent third party Audited Financials.
2Q 2024 was the 22nd consecutive quarterly distribution above our projected target
Quarterly Distributions & NAV Performance
Commentary (updated 9/06/24)
In March 2020, the muni bond market had its highest short-term volatility and market value decline in history, as pandemic fears triggered fund redemptions causing bond liquidations and simultaneous spiking of short-term and long-term muni rates.
Thanks to retained earnings built through February 2020, Alcatraz was able to absorb the market value decline needed to partially deleverage and mitigate risk until stability returned to the muni market.
And then again, from January 2022 through October 2023, muni bonds along with most other fixed income assets, experienced historic devaluation in reaction to the Fed’s aggressive 525bps of rate hikes implemented from March 2022 through July 2023.
The performance slide illustrates how the PacMuni fund structure has been able to absorb the historic negative quarterly NAV volatility and continue to exceed our targeted distributions.
With Fed Chair Powell’s 8/23/24 statement that “the time has come for the Fed to cut interest rates,” the futures market expects the Fed to begin cutting rates in 12 days and end 2024 ~114 bps lower @ 4.19%; and finish 2025 ~254 bps lower @ 2.79%.