PIMCO GIS Dynamic Bd E EUR H Acc |
Morningstar's Take
|14/12/2023by Eric Jacobson
| Pimco Dynamic Bond uses all of Pimco's resources to manage an unconstrained but risk-controlled strategy that earns Above Average Process and High People Pillar ratings. Lead portfolio manager Marc Seidner has led this offering since 2015 and boasts more than three decades of investment experience. He is accompanied by Pimco's CIO Dan Ivascyn, who chairs the investment committee responsible for formulating the firm's top-down market views. Four portfolio managers round out the Dynamic Bond team, including Mohit Mittal, who manages a variety of strategies and was named as CIO of core strategies in December 2023; Nidhi Nakra, who focuses on credit; and securitized specialists Bryan Tsu and Jing Yang. The extensive resources backing this strategy include the top-down insights of Pimco's macro specialists and the bottom-up contributions from scores of sovereign, securitized, and credit analysts. Unfettered by benchmark constraints, Seidner looks to balance risk factors such that neither interest-rate nor credit risk dominates the strategy’s returns, a feature common to high-flying competitors. In recent years, he downplayed the corporate-credit-heavy approach employed by some nontraditional bond Morningstar Category peers and has looked to be cautious with interest-rate bets. While the strategy kept duration relatively short compared with broad market benchmarks, and shifted gears as inflation surprises shook markets in 2022, Seidner argues he and his colleagues were too slow. The strategy strongly outperformed the Morningstar Core Bond Index, for example, but its U.S. offering still fell by nearly 7% that year. The strategy’s more circumspect approach helped it weather early 2020's extreme pandemic-driven volatility better than most peers, though, while Seidner's well-timed pivot into attractively priced corporate, emerging-markets, and Italian government bonds allowed it to benefit from the subsequent rebound. Having internalized lessons from 2022, the team shifted gears at the end of October 2023 bringing duration up to 4 years. That helped dramatically as Treasury yields plummeted. Exposure to instruments benefiting from higher short-term rates was especially helpful for the year to date through November 2023, producing most of the strategy’s returns. Overall, Seidner’s efforts have produced returns for the strategy’s U.S. offering that land in the middle of its peer group (distinct funds) on a total return and volatility-adjusted basis since he took over the portfolio. That’s a very reasonable outcome for a strategy that has been more measured—and thus less aggressive and less volatile—than riskier unconstrained competitors. |
A circumspect style reflects the risk-controlled approach of this very flexible offering.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | High |
| Parent | Above Average |
| Process | Above Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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