Asset Management Awards for Excellence 2018 – Best Fund Provider – Investment Grade Bond

Best Fund Provider Investment Grade Bond



Best Fund Provider – Investment Grade Bond

Michael Thompson

Head of Asia ex-Japan, PIMCO

“Credit spreads tightened during the fourth quarter of 2017 alongside synchronised global growth and optimism around U.S. tax cuts, ending a strong year for credit. PIMCO continues to overweight credit risk but we have de-risked as credit markets are closer to fair value. We are focusing on relative value opportunities between sectors and companies to drive returns, preferring companies with high barriers to entry, superior growth potential, strong pricing power, favorable asset quality and management terms which support bondholders while avoiding those which lack those characteristics.”

Winners rationale

The prospects of a reflation trade, rising inflation and, effectively, higher interest rates, led investors in 2017 to further diversify fixed income exposures at private banks in Asia.

Globally synchronised growth and benign central bank moves, eventually led a broader fixed income asset class to post 7.4% returns, according to the Bloomberg Barclays Global-Aggregate Index. Balancing between increasingly tightening credit spreads and the ongoing need for yield, private banks shined the spotlight on diversification through investment grade credit.

PIMCO’s global fixed income capabilities are widely recognised at private banks in the region, due to the breadth and depth of its expertise and ability to deliver total returns within the asset class.

Although a supportive macroeconomic environment – including high yield and emerging market debt – boded well for risk assets, the American asset manager’s investment grade bond management capabilities continued to be relevant for private banks seeking to maintain risk levels within portfolios.

In early 2018, indicators of rising inflation are already becoming evident. Private banks in Asia, across discretionary and advisory fronts, are continuously driving further diversification, be it a concentrated portfolio of medium quality bonds, or a barbell approach split between high grade and high yield investments.

Private banks and clients that lack the appetite to make calls at the individual bond level have PIMCO to turn to.

In 2018, the investment management firm was the worthy winner of Asian Private Banker’s Best Fund Provider – Investment Grade Bond.

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