Analyst Report
Morningstar's Take

by Mara Dobrescu, CFA

Pimco GIS Global Real Return's experienced management team and sizeable supporting cast of global-bond specialists continue to give it an edge in the inflation-linked bond arena. Given the importance of low fees in this competitive field, the fund's cheapest institutional share classes earn Morningstar Analyst Ratings of Silver and Bronze, while its remaining shares are rated Neutral. Following the retirement of Pimco's Real Return team head Mihir Worah in early 2020, the strategy remains in capable hands. Pimco veteran Steve Rodosky, who led the firm's US Treasury trading desk in earlier years, oversees the US inflation-linked effort, while European rates head Lorenzo Pagani oversees this portfolio's non-US positioning. Former agency mortgage specialist Daniel He joined the inflation-linked desk in early 2019 and became a comanager here in December 2019. Longtime Pimco European rates manager Yi Qiao joined the Real Return team in April 2020 and assists Pagani on the research and trading of inflation-linked securities. Pimco's resource depth outside of the Real Return team also matters because the team has used its wide latitude to invest beyond the Bloomberg Global Inflation-Linked Index benchmark, including up to 20% in non-inflation-linked debts, such as corporate, securitised, and emerging-markets fare, as well as currencies. Employing modest out-of-benchmark positioning, without ratcheting up the risk, is one tool this team can use to add value. Deep knowledge of the US Treasury Inflation-Protected Securities market, and the ability to identify value within it, is another strength of this team. Relative performance is modestly struggling in 2021 because of an underweighting in US break-even inflation, which the team believes has reached expensive valuations, and more cautious positioning in out-of-benchmark bonds. Rodosky, He, and Pagani have contributed to the long-term success of other government-bond-related strategies at Pimco, though, and they're well-equipped to add value here through positioning both within and beyond the strategy's benchmark exposures. The strategy has rewarded investors with top-quartile performance for almost 15 years.

Morningstar Analyst Rating™
To find out how Morningstar rates a fund click here.
Portfolio RoleSpecialty
Morningstar Pillars
PeopleAbove Average
Strong despite turnover.
ParentAbove Average
Pimco's investment culture is robust.
More active than most.
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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A fim de prover consistência para todos os relatórios fornecidos por diferentes Asset Managers, os data points calculados apresentados são gerados usando uma metodologia de cálculo proprietária da Morningstar, que pode ser conferida com mais detalhes em(https://www.morningstar.com/research/signature)