Adam Bowe. Photo: Matt Fatches
Category: Global and diversified fixed interest
Winner: PIMCO
Analyst: Andrew Yap
Sector overview:
Investment outcomes produced across the Global Fixed Interest asset class have been mixed in recent times. A recurrent theme noted across the peer group has been an inability of managers to consistently generate positive returns from interest rate strategies. Similarly, sector participants have been challenged by currency and high yield markets which have remained volatile. Notwithstanding these headwinds, Zenith continues to believe there are strong offerings across the asset class.
Zenith says…
Across the global fixed interest asset class, PIMCO remains a preferred manager. With significant global presence and specialist resources located across multiple geographies and regions, Zenith believes PIMCO is well positioned to take advantage of an ever-dynamic investment landscape. Zenith continues to view favourably PIMCO’s global and scalable investment process, which combines macro-economic analysis with bottom-up security selection to identify the most attractive investment opportunities.
Interview:
Adam Bowe
Fixed income portfolio manager
PIMCO Australia
It’s been an extremely challenging period and very volatile. Currencies, interest rates and credit markets can be volatile, but haven’t gone very far point-to-point. So it’s been a year when we’ve been very conscious that our clients buy a bond fund for the defensive nature of the asset class – capital preservation and income generation. It was more a year of focusing on portfolio construction, optimising carry, and really having robust risk management and systems through the many event risks throughout the year. We’ve been very conscious and aware of why clients buy PIMCO bond funds, and making sure we can deliver that to them.
Generally the global economy still requires some sort of policy support. There seems to be a shift in emphasis from monetary to fiscal [policy]. So I think understanding the nature of the shift in that policy emphasis, and how it might impact asset classes and interest rates across the yield curve.
It has been a challenging time to be a bond manager, particularly an active manager. It’s been an extremely volatile market. We pride ourselves on being active managers, and volatility presents opportunity, but also in many instances it’s very challenging to form high-conviction views when markets are so volatile. It’s been extremely challenging, and that’s why the focus on risk management and robust portfolio construction this year has swamped having big directional bets on interest rates or currencies.
