PIMCO GIS Glb Bd E EUR Hedged Acc |
Morningstar's Take
|26/10/2021by Mara Dobrescu, CFA
PIMCO GIS Global Bond is backed by three skilled managers who draw on the firm’s extensive resources, and it benefits from a flexible, diversified approach. The strategy earns a Morningstar Analyst Rating of Gold on its cheaper share classes; the more expensive ones earn Silver and Bronze. Lead manager Andrew Balls has a good deal of experience running global and European mandates, and the vast investment team, including veteran comanagers Sachin Gupta and Lorenzo Pagani, is well-equipped to cover rates, currencies, corporates, and structured credit. Pimco's top-down views--driven by the firm’s investment committee on which Balls sits--guide the strategy’s broad positioning. Within the scope of those themes, Balls and his team consider relative valuations to determine sector, country, and yield-curve positioning. The setup resembles that of many of its global bond Morningstar Category peers, but the approach of this strategy also allows for considerable flexibility. The fund has historically held up to half of its assets in corporate bonds, and up to a third in emerging-markets debt; it can also invest up to 10% in below-investment-grade bonds. The team has used this latitude well and in moderation along with its work in sovereign bonds, which typically anchor the portfolio. Andrew Balls has also tended to stay on the shorter side of the benchmark’s duration: The fund’s interest sensitivity came in at 6.5 years as of August 2021, roughly a year shorter than the Bloomberg Global Aggregate Bond Index. This helped the fund during periods of interest rate shocks (such as in the first quarter of 2021) but has weighed on the strategy’s longer-term returns against the backdrop of steady to declining rates. However, it’s encouraging to see the strategy continue to do well in areas where Pimco has demonstrated skill over long periods (corporates, securitized, and currencies) and where its resources largely surpass most competitors’. Over the trailing five and 10 years through September 2021, the fund’s Institutional USD shares have largely outpaced both the category average and the benchmark index, while keeping volatility in check. All told, this team is well-equipped to take advantage of the strategy’s flexibility over the long haul. |
To find out how Morningstar rates a fund click here.
Portfolio RoleCore.
| Morningstar Pillars | |
| People | High |
| Topnotch team. | |
| Parent | Above Average |
| Pimco's investment culture is robust. | |
| Process | High |
| Sound. | |
| Performance | |
| Steady over the long haul. | |
Morningstar Analyst RatingMorningstar evaluates funds based on five key pillars, which it's analysts believe lead to funds that are most likely to outperform over the long term on a risk-adjusted basis.
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