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PHK is still trading at a premium. It’s distribution is still high, even after a cut. There are other options, if you care to look. I may sound like something of a broken record on PIMCO High Income Fund (NYSE: PHK ), but I don’t think the worst is over yet for shareholders. At the very least, after the recent dividend cut, it’s worth questioning your commitment to the fund. Here’s why I’m still concerned and a few options to look at. It’s still risky So it might be easy to understand why I would be negative on a closed-end fund, or CEF, with a 60% premium, which PHK sported not too long ago. But why am I still negative after that premium has fallen so far and the dividend has been trimmed? For starters , the nearly 15% premium at which PHK currently trades is still pretty rich on an absolute basis, even though it’s much lower than it was before. Few CEFs trade that far above their net asset values, with most actually trading at a discount. Second, the fund has a distribution yield of around 18% relative to its net asset value, or NAV. (Based on market price the distribution yield is closer 16% because of the premium to NAV.) Think about that for a second. This is a bond fund, albeit an aggressive one, that has to send investors 18% of its assets each year in distributions. In order to do that it will need to generate a return of at least that much or it will be eating into net assets. A decade ago the NAV was over $14 a share, today it’s under $7 a share. To be fair, if you look at the fund’s total return, which includes reinvested distributions, it has done well overall. But if you have been living off of those distributions, the picture isn’t as sanguine. Add in the recent dividend cut and the warning signs aren’t just written on the wall, they have slapped investors in the face. At one point shareholders could hang their hat on the fact that the distribution hadn’t been cut, even during the deep 2007 to 2009 recession. But that’s just not true anymore. And with the payout still so large, you should be thinking about the possibility of more cuts to come. Alternatives So what should you look at? If you just love PIMCO and can’t imagine allowing any other asset manager the chance to run your bond money, there are plenty of alternatives for you to consider. In fact, if you love PIMCO and think PHK’s managers, Alfred Murata and Mohit Mittal, are geniuses, you still have plenty of options . The pair also run Income Strategy Fund (NYSE: PFL ), Income Strategy II Fund (NYSE: PFN ), Corporate & Income Strategy Fund (NYSE: PCN ) and Corporate & Income Opportunity Fund (NYSE: PTY ). These are all different funds, of course, but all four offer distribution yields of around 10% or so and all but one trades at a discount to NAV. PTY, the only one of the quartet at a premium, trades hands at roughly 2% above its net asset value. That’s a lot more reasonable than nearly 15%. And just so we’re on the same page, of the five closed-end funds mentioned so far, only PHK has cut its distribution recently. That’s no guarantee that the other four won’t or that PHK will cut again, but if I had to pick a fund to be concerned about, I’d go with the one that stands out the most… PHK. There are other PIMCO funds with different managers that you could look at, too, of course. But what if you weren’t married to PIMCO (or the two managers of PHK), you could look at funds from any number of reputable asset managers. If you don’t know where to begin, just head over to CEFA.com, the Closed End Fund Association’s free site. Go to the Advanced Search tool from the Fund Selector drop down in the navigation bar. Select “general bond funds” as your classification, which is where PHK lives, and there’s a whole list of options for your perusal. A couple of easy to find examples with good pedigrees: Eaton Vance Limited Duration Income Fund (NYSEMKT: EVV ) and BlackRock Multi-Sector Income Trust (NYSE: BIT ). Both trade at discounts to NAV and both have distribution yields in the 9% range – notable, but not frighteningly high. And BlackRock and Eaton Vance are names at least on par with PIMCO in the asset management business. The point isn’t to suggest that any of the alternatives I’ve thrown out are the perfect one for you or anyone else. My point is to show that there’s no need to be locked into PHK because finding similar funds isn’t hard. You will have to be willing to accept a lower yield. But based on PHK’s unusually high yield and the cut that’s already taken place, less income seems like it could be a real possibility even if you don’t look for an alternative. Hindsight is 20/20. The time to get out of PHK was when it was trading at a huge premium. If you didn’t jump ship then, so be it. Mistake made, now it’s time to learn from what took place. That’s even more true since PHK still trades at a notable premium and still has a frighteningly high distribution yield. My two cents is that it won’t hurt to consider some easily found alternatives.