What a top bond fund manager is buying now
Subscribe to enjoy similar stories. High-quality bonds are on sale, and Pimco Income fund manager Daniel Ivascyn is loading up on them. Ivascyn isn’t just any ordinary manager, and the $180 billion Pimco Income is no ordinary bond fund.
In the past 15 years under Ivascyn and his two co-managers’ stewardship, the fund’s retail share class—PONAX—has beaten 97% of its peers in Morningstar’s Multisector Bond fund category, with a 6.3% annualized return, also dusting the popular iShares Core U.S. Aggregate Bond exchange-traded fund’s (AGG) 2.4%. (Pimco Income’s institutional share class—PIMIX—has bested 99% of its peers.) “One of the core themes that we have today is that bonds are cheap, stocks look expensive, and credit spreads are tight, so focus on higher-quality investments," he says.
“Be patient and don’t overly trade the market." Today may be one of the most uncertain periods in bond market history. Treasuries, issued by the U.S. federal government, are the bedrock of our financial system, and how they behave affects every other bond.
But the federal government recently has been in upheaval. President Donald Trump has been applying steep tariffs to imports, which are inflationary and bad for bonds, while firing thousands of federal workers, which could spark a recession, usually good for high-quality bonds. Meanwhile, the bond yield curve is flat, meaning long-term bonds yield about the same as short-term ones, which is highly unusual.
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