PIMCO Australia is part of the PIMCO Group which began in 1971 as Pacific Investment Management Company and is one of the world’s leaders in fixed interest investments. The PIMCO Group has its head office in Newport Beach, California and in the mid 1990s expanded into global markets and now has offices located in Hong Kong, New York, Munich, London, Tokyo, Singapore, Toronto and Sydney.
PIMCO applies a diverse range of strategies including duration analysis, credit analysis, relative value analysis, sector allocation and rotation and security selection. PIMCO concentrates on two sources of return when assessing potential investments:
- sector allocation and rotation; and
- ‘bottom up’ credit analysis of individual bonds and issuers.
Historically the allocation between various sectors of the bond market has been an important source of return in investment portfolios. PIMCO’s sector allocation is driven by its economic overview which is determined by a combination of its long-term (secular) outlook and short term (cyclical) outlook.
The secular outlook focuses on economic fundamentals such as trends in productivity and interest rates over a five year period. The cyclical outlook fine tunes the secular outlook over a one year horizon.
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