Analyst Report
Morningstar's Take

by Mike Mulach
Pimco GIS Diversified Income’s still ample staffing, deep analytical resources, and proven approach make it a top choice for higher-yielding credit exposure.

Despite some recent team changes, this strategy’s proven management team and Pimco’s topnotch supporting resources still make it a standout. Pimco veterans Sonali Pier, Alfred Murata, and Dan Ivascyn (Pimco’s group CIO) have worked together at this strategy for more than six years, with Pier as the lead since former comanager and European credit lead Eve Tournier departed the firm in December 2022. Capable managers Charles Watford and Regina Borromeo were added to the management roster here in her place and work closely with Pier. European high-yield specialist Watford joined ‎Pimco in 2007 and is a portfolio manager in the London office with research ‎responsibilities for the European automotive and real estate sectors. Borromeo joined Pimco in ‎September 2022 and boasts two decades of experience in global credit, most recently as a portfolio manager with Robeco. Given Pier’s continued oversight, Ivascyn and Murata’s assistance, and the addition ‎of more resources, the strategy remains in good hands.

Pimco's selection of a benchmark that is well-matched to the strategy's investment universe is also key to its appeal, given the typical industry practice of running broad-ranging portfolios against bogies with much narrower parameters. This one's custom-built index consists of roughly one third each in investment-grade corporates, high-yield corporates, and emerging-markets debt across the globe. That can give the portfolio considerable emerging-markets and global credit exposure, as well as a sometimes comparatively long duration. The latter has been especially notable given that global bond market durations have extended in recent years while many managers have trimmed back duration.

That has occasionally knocked the portfolio off course, such as when the fund’s Russia exposure and relatively greater interest-rate sensitivity held it back during 2022’s Russia-Ukraine conflict and rates selloff.‎ On the other hand, the strategy’s longer duration buoyed it back toward the top of the heap late in 2023.

In the context of a decidedly aggressive credit mandate, the strategy benefits from a circumspect, ‎‎benchmark-aware style—a crucial source of structure given its many moving parts. Though its ‎‎trailing-returns data has been muted by its recent stumbles, over the long term it remains a compelling choice for global credit exposure.‎
Morningstar Medalist Rating™A distillation of Pimco’s global credit work.
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Morningstar Pillars
ParentAbove Average
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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