PIMCO’s Views on Negative Rates, Valuations and Volatility
Group CIO Dan Ivascyn and Product Manager David Fisher discuss the recent market shift, the implications of central bank policies and where PIMCO is currently finding value across global asset classes.
RecordedMay 9 201614 mins
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Daniel Phillipson, Head of Product Management, EMEA
Markets entered 2018 with double-digit equity returns, strong momentum and expectations that the synchronized global growth and corporate earnings recovery we saw in 2017 will continue into 2018.
However, markets have been more uncertain year-to-date with recent volatility suggesting that change is in the wind for investors. Central banks globally are moving away from emergency levels of easing, and large fiscal stimulus in the U.S. in the late stages of the business cycle could have unintended consequences. And, of course, valuations matter.
So how do you approach the asset allocation conundrum when investing late in the cycle? Join us on the 13th to find out.
Dan Ivascyn, Andrew Balls, Joachim Fels, Anna Dragesic
Ten years after the financial crisis, the global economy and financial markets look set to enter a new era of potentially radical change. Join Dan Ivascyn, Joachim Fels, Andrew Balls, and Anna Dragesic as we present the findings from our 2018 Secular Outlook and discuss what’s ahead for the global economy and markets.
Introducing Market Intelligence, a CPD-accredited education series that aims to help you expand your knowledge of fixed income and the global markets, while focusing on how to address common client concerns and questions. Visit pimco.co.uk/marketintelligence
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.
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.
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.
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.
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.