http://www.pimco.com/EN/Insights/Pages/Rethinking-Asset-Allocation.aspx- Asset classes are likely to be affected by the situation in Europe and, more broadly, by high debt levels in developed countries. The related political debate about austerity vs. growth is also critical.
- Fixed income investors should note whether countries control their own currencies and can monetize their debts. Those that can may be greater inflation risks. Those that cannot may be greater credit risks.
- These factors are contributing to market volatility and lower returns, which in turn are challenging investor expectations about asset classes.
- We encourage investors to broaden their opportunity sets, for example, looking more closely at emerging market government bonds. They also may consider assets such as real estate and commodities, which may partially replace traditional domestic equities.
Navigating the global landscape these days is tough. Macro risks range from uncertainty about the future of Europe to mixed messages about the U.S. economy - not to mention a host of concerns about indebtedness, policy and politics.
In the following interview, portfolio manager Curtis Mewbourne discusses how investors can approach asset allocation in such an environment and over the longer term.
Comments
http://info.pimco.com/Global/FileLib/RoundTable_v2/PIMCO_Playing_Defense_in_the_Search_for_Income_Roundtable_Brochure_PB013.pdf
Roundtable discussion with Dan Ivascyn, Brad Kinkelaar, Jerome Scheider and Joe Deane
Thank you for the linked articles.
Regards,
Catch
Portfolio manager Dan Ivascyn led the Pimco Income fund to big gains by buying mortgage-backed securities after the financial crisis started. Why he likes Hilton bank loans and Gazprom bonds.
http://online.barrons.com/article/SB50001424053111904346504577531080010077836.html?mod=BOL_twm_fs
Investing off the Beaten Track in an Uncertain Global Economy
Article Introduction
- The global economy remains in a multiyear period of global deleveraging; it will be an uncertain and, at times, volatile process.
- The substantial uncertainty and volatility affecting interrelationships across different markets are providing relative-value opportunities.
- Alternative strategies can be enticing, but the decision to use them needs to be fully informed and weighed against all the options.
Market volatility can be unsettling, but it can also signal opportunity. So is there more volatility - and opportunity - ahead?
In the following interview, portfolio manager Dan Ivascyn [Pimco Income Fund Manager] assesses global financial markets and discusses alternative approaches to seeking compelling returns.