Designed specifically for Australian investors, PIMCO Australian Bond Strategies invest predominantly in names that Australian investors are familiar with. Furthermore, Australian bonds tend to have higher average qualities than global counterparts, with Australia being one of the last few countries to retain a AAA rating from all major ratings agencies. Australia’s bond market offers a diverse range of opportunities, including Australian Commonwealth Government bonds, State Government bonds, corporate bonds and high quality Australian residential mortgage-backed securities (RMBS).
As a core holding in Australian investors’ portfolios, our strategies seek to provide all the benefits you expect from a core bond holding, such as consistent income, relatively low volatility and diversification within a broader asset allocation.
PIMCO’s investment process
The firm’s philosophy seeks to outperform broad fixed income benchmarks on a consistent basis, while maintaining overall risk similar to the index. To this end, PIMCO seeks to identify favourable secular and cyclical trends, capitalising on relative value opportunities, and avoiding credit events. The firm’s focus on generating alpha over a market cycle—which PIMCO defines as three to five-years— seeks to employ the simultaneous application of a disciplined approach to country research and a structured evaluation of security opportunities to help identify and act on inefficiencies that characterise the market.
The following comprises four key principles of the firm’s philosophy:
- Long-Term Orientation – PIMCO believes that focusing on long-term, secular trends offers the greatest opportunity to add value relative to the overall market, which is largely preoccupied with pricing in short-term factors. By maintaining a disciplined focus on the firm’s secular views, PIMCO is better able to identify long-term value and prevent the firm’s trading decisions from being overly influenced by emotion and short-term market sentiment.
- Broad Universe – PIMCO is committed to implementing the firm’s approach by selecting from a broad universe that includes all conventional fixed income sectors as well as newer less traditional sectors, including high yield, emerging market debt, and inflation-linked bonds. PIMCO believes that a broad opportunity set not only provides us with greater potential to enhance returns, but also enables us to reduce portfolio risk through greater diversification.
- Multiple Strategies – PIMCO believes that a diversified approach to adding value should deliver more consistent results, so PIMCO employs multiple concurrent strategies and takes only moderate risk in each, thereby seeking to reduce the risk of poor performance arising from any single source. Strategies utilised include duration management, yield curve or maturity structuring, sector rotation and all bottom-up techniques including those driven by the firm’s in-house credit and quantitative research.
- Keen Focus on Risk Management – Risk management is a major focus at PIMCO and has been a cornerstone of the firm’s investment philosophy since the firm’s inception. PIMCO measures and controls portfolio risk by focusing on a series of factor based risk measures which capture each portfolio's positioning relative to its benchmark. PIMCO believes that successful risk management demands constant reassessment of the investment landscape in order to anticipate future market events and evolutions in potential risk frameworks.
PIMCO’s Australian fixed interest mandates are managed locally from the Sydney office. The Sydney portfolio management team is fully integrated into PIMCO’s global team and has continuous interaction with our headquarters and other global offices. Sydney’s key investment professionals travel to our headquarters at least four times per year for the firm’s secular and cyclical economic forums that set investment policy. The local portfolio management team also relies on the global sovereign and credit research teams. This ensures that the local team is fully integrated into PIMCO’s investment process and has access to PIMCO’s vast global resources.
For Australian portfolios, PIMCO’s diverse and experienced Australian fixed income team includes dedicated specialists assigned to every sector of the Australian fixed income market to ensure full market coverage. These sectors include interest rates, currency, mortgages/asset-backed securities, corporate debt and government and government- related sectors. The sector specialists relay information, provide strategic ideas and trading strategies and assist with execution.
PIMCO Separate Account
- Minimum investment: $100 million
- Specially tailored investment guidelines and benchmarks
- Designated investment professional
PIMCO Fund Investment
- Minimum investment: $50 million
- Fixed investment guidelines
- Total return fixed income management style
- Choice of three different funds
Please contact your PIMCO representative for more information.