Brexit, Boris & the BoE...what's priced in for UK credit?
On the 23rd June UK voters will go to the polls to vote on 'Brexit' or 'British Exit' from the European Union.
While current market valuations partially reflect the risk of a Brexit – investor sentiment has shifted to a potential rate cut by the BoE and sterling touching a 5 year low against the dollar - the response in credit markets has been more muted and quite varied. This presents opportunities to capitalise on market dislocations as we head into this important political event.
Please join Mike Amey, Head of Sterling Portfolios, and Ketish Pothalingam, UK Credit Portfolio Manager, for a discussion on the probability of Brexit, its implications for the UK and where PIMCO is identifying opportunities across its portfolios.
RecordedMay 13 201645 mins
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Scott Mather, CIO U.S. Core Strategies and PIMCO Total Return Fund portfolio manager, and Anmol Sinha, product strategist, provide insights into why rising rates do not necessarily need to be feared and where we see attractive opportunities in the core bond market.
Joachim Fels, Global Economic Advisor, Scott Mather, CIO U.S. Core Strategies, and Olivia Albrecht, ESG and Fixed Income Strategist, Global, discuss our economic outlook across regions and markets, and why we believe that solid growth this year is a near certainty, but the causes of the stronger expansion are more uncertain and could affect its durability.
Five key questions answered about markets today, including whether the U.S. dollar will continue to weaken and if we’re entering a bear market in bonds.
With key risks on the horizon, portfolio defense may be more important than ever. The portfolio managers behind PIMCO Total Return offer an inside look at the process that has fueled the core bond strategy for decades - and how they are managing the strategy to prepare for what’s ahead.
Olivia Albrecht with Scott Mather and Joachim Fels
Barring a zombie apocalypse or a sudden spontaneous collapse in asset prices, PIMCO expects the global expansion to continue in 2018. Yet investors should prepare for both the consequences of policy shifts and the opportunities presented in more difficult market conditions.
As expected the Fed hiked rates in its June meeting, but the unexpected news is the detailed plan it released to shrink and normalize its balance sheet.
Please join us for a discussion on different approaches to add downside portfolio protection in the current investing environment of lower yields, low volatility and generally neutral or rich valuations. As many investors perceive traditional fixed income solutions to be less attractive in providing downside protection and the cost of outright hedging options seems high, many discussions revolve around other portfolio diversifiers and options to improve resilience of portfolios in the downside scenario. The session will focus on best ways to protect client portfolios and pros and cons of various approaches.
Opinions in the active-passive investment debate have drifted poles apart over recent years. We revisit this discussion by contrasting equity and bonds. We look at performance numbers and find that, unlike their stock counterparts, active bond mutual funds have largely outperformed their median passive peers over our sample period. We offer conjectures as to why bonds and stocks differ. Differences may be due to:
•The large proportion of noneconomic bond investors
•Benchmark rebalancing frequency and turnover
•Structural tilts in fixed income space
•The wide range of financial derivatives available to active bond managers
•Security-level credit research and new issue concessions
In short, informational efficiencies make beating equity markets difficult. But we believe that's not the case with fixed income, where noneconomic and passive investors pursue agendas that are not exclusively about total return
Put simply, bonds are different.
Joachim Fels, Global Economic Advisor, and Portfolio Strategist Olivia Albrecht discuss PIMCO’s forecast for global growth and inflation, highlighting the reasons we have more confidence that the global economic expansion will strengthen and broaden over the cyclical horizon.
Ryan Murphy - Product Manager, Dan Hyman - Managing Director and Portfolio Manager, PIMCO
The global mortgage-backed securities (MBS) market offers an often overlooked opportunity set. Securities range across the spectrum in terms of interest rate and credit risk sensitivity allowing flexibility to navigate changing markets. Mortgage performance is more often tied to consumer credit and real estate fundamentals rather than the strength of corporate balance sheets. Allocating to MBS means investors can help diversify existing bond allocations and potentially enhance returns without increasing equity correlation.
At its March meeting, the Fed hiked rates as expected and left the projected path for rates unchanged. Yet, as Chair Yellen likes to remind us, the Fed is not on autopilot.
Michael A Gomez, Pramol Dhawan, and Lupin Rahman - PIMCO
Emerging market investors initially reacted to the surprise result of the U.S. presidential election with a sharp pullback – just as the sector seemed to be staging a comeback. Despite continuing policy uncertainties, PIMCO’s outlook for the asset class is far more nuanced.
Geraldine Sundstrom, Managing Director and Portfolio Manager, and Daniel Phillipson, Head of Product Management, EMEA, PIMCO
Please join us for a discussion of current market themes and cross-asset class investment implications. Geraldine Sundstrom and Dan Phillipson will discuss market dynamics and where investment opportunities remain amidst uncertain markets.
Geraldine Sundstrom, Managing Director and Portfolio Manager, and Daniel Phillipson, Head of Product Management, EMEA, PIMCO
Please join us for a discussion of current market themes and cross-asset class investment implications. Geraldine Sundstrom and Dan Phillipson will discuss market dynamics and where investment opportunities remain amidst uncertain markets.
On Tuesday 28 June, PIMCO hosted a conference call with London-based Portfolio Managers Andrew Balls, Mike Amey and Philippe Bodereau, discussing the investment outlook and questions in the wake of the historic Brexit referendum in the UK on 23 June 2016.
PIMCO is one of the world’s premier fixed income investment managers. With our launch in 1971 in Newport Beach, California, PIMCO introduced investors to a total return approach to fixed income investing. In the 45+ years since, we have continued to bring innovation and expertise to our partnership with clients seeking the best investment solutions. Today we have offices across the globe and 2,200 professionals united by a single purpose: creating opportunities for investors in every environment.
Brexit, Boris & the BoE...what's priced in for UK credit?Mike Amey, Head of Sterling Portfolios, and Ketish Pothalingam, UK Credit Portfolio Manager, PIMCO[[ webcastStartDate * 1000 | amDateFormat: 'MMM D YYYY h:mm a' ]]45 mins
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Brexit, Boris & the BoE...what's priced in for UK credit?Mike Amey, Head of Sterling Portfolios, and Ketish Pothalingam, UK Credit Portfolio Manager, PIMCO[[ webcastStartDate * 1000 | amDateFormat: 'MMM D YYYY h:mm a' ]]45 mins