PIMCO retains fixed interest crown

Three-time award winner PIMCO has again won first place in the Fixed Interest, Global and Diversified category in the Money Management/Lonsec Fund Manager of the year awards.

PIMCO kept its place as pre-eminent fund in its category, thanks to its renewed focus in information technology infrastructure and risk measurement, Lonsec noted.

The PIMCO Equity Trustees Global Bond fund has a deep and quality investment team focusing on both top-down macro themes and bottom-up research on individual debt securities, according to Lonsec.

The fund is very actively managed, said Peter Dorrian, PIMCO head of global wealth management in Australia.

“We’re in interesting economic times with different parts of the world moving in very different directions in terms of the outlook for their economies and growth.

"One of the things that we always do at PIMCO is that we spend a lot of time seeing the relative outlooks across all the countries in which we can invest, and all the sectors in which we can invest,” Dorrian said.

The fund is very good at avoiding those sectors that present risk to investors, and assess sectors with the best return, he said.

PIMCO’s style of active management has been the real success story, he said.

Dorrian warned investors to avoid peripheral European countries like Portugal and Greece, as well as the US Treasury market. PIMCO sold out of its US Treasury holdings a couple of months ago.

PIMCO was favouring the emerging markets, corporate, and the high quality mortgage sector, Dorrian said.

Investors need to look foremost for a fixed income manager that assesses the risk of that investment, to return capital first and then provide a return on that capital, Dorrian said.

“Now, more than ever, with the disparity that we have seen in bond markets around the world, it’s really important that we look first to assessing risk in any position we take,” he said.

Lonsec also viewed favourably PIMCO’s move in recent years to broaden the focus of the fund’s senior portfolio managers to include non-US accounts, including the Australian fund.

The fund was introduced into Australia in 1998. It has produced returns of nearly 13 per cent over the last 12 months to April 30, more than 5 per cent over the index return. They currently have $2.2 billion in funds under management.

Taking a diversified approach without compromising the level of risk they use in the portfolio is also the secret behind Macquarie’s nomination, according to Brett Lewthwaite, head of Macquarie’s fixed interest, currency and commodities asset management business.

The Macquarie Master Diversified Fixed Interest Fund, while being well diversified, has been designed to behave like a domestic or Australian bond fund, in order to achieve superior return outcomes for clients.

The team of more than 25 analysts look for the best investment opportunities around the world and then modify them to replicate the Australian index from day to day.

The fund has outperformed the normal Australian bond fund by 2 per cent.

“We believe that the global universe of fixed income avails itself to be able to take a lot more diversified positions, that enable value to be added at a higher level, without sacrificing the level of risk,” Lewthwaite said.

For Simon Doyle, head of fixed income and multi asset at Schroder Investment Management, the nomination of the Schroder’s Fixed Income Fund was a vindication of its consistency of investment performance over the short and medium-term.

“The fund performed well through the recovery phase and that performance has come about through the execution of robust investment processes and the good team sitting behind that process,” he said.