![]() We do not expect to have large positions in risk assets given market vulnerabilities, but we may add to spread risk opportunistically in select investments that we see as having a remote probability of default. In the current environment, we expect to target modest duration underweights and to de-emphasise curve positions. Today, we believe it matters more than ever. The success of the PIMCO Income Strategy in 2021 has won us industry accolades – testament to our belief that active management is the responsible way to navigate the complexities of the vast global fixed income universe. In addition, our key currency positions throughout the year delivered positive results. In securitised debt, returns were driven by our allocation to non-agency mortgage-backed securities. In high yield, we benefited from idiosyncratic opportunities such as bank capital or rising stars. Within investment grade credit, we focused on bottom-up security selection and favoured the financial sector. ![]() As spreads tightened, allocations within both securitised and corporate credit sectors were key contributors. The strategy added value across its spread and currency strategies during the year. We allocated to areas of global bond markets where we saw the best risk-adjusted opportunities. ![]() ![]() Amid broader volatility in fixed income markets, the strategy nimbly navigated market risks, including duration and credit risks. In 2021, when traditional bond benchmarks faced challenges – the Bloomberg US Aggregate, for example, was down -1.5% – the PIMCO Income Strategy continued to deliver on its objectives. For over 10 years across multiple market environments, the strategy has historically provided high, consistent income and attractive long-term total returns. The track record of the PIMCO Income Strategy’s broad-based approach speaks for itself. Delivering on objectives for over a decade We also focus on liquidity by investing in assets that can be easily bought and sold, even in times of stress.įinally, the strategy benefits from PIMCO’s global scale and depth of sector-specific resources to source new opportunities across the global fixed income universe, to negotiate directly with borrowers, and to minimise transaction costs across markets. This means focusing on high-quality and senior secured bonds that can offer protection when markets go awry. Risk management and assets that “bend but don’t break” are emphasised to withstand market gyrations. We seek consistent income distribution as a driver of total returns over time. To balance yield with capital-preservation investment objectives, the strategy allocates to both high-quality and higher-yielding securities, which tend to perform differently in varying growth environments and can help weather the challenges of changing markets. ![]() We take a long-term view, but respond actively to opportunities and overshoots created by market volatility. The PIMCO Income Strategy invests across the entire global bond market, with active credit selection and the ability to tactically adjust duration. With an uncertain path ahead, a balanced and flexible multi-sector approach may provide an opportunity to earn an attractive yield while managing risk. Positioning for consistent income amid unpredictability
0 Comments
Leave a Reply. |