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Posts From Pimco

The PIMCO Glide Path Construction Proces

The PIMCO Glide Path Construction Proces

🕔08:26, 13.Jan 2023

The savings and investment plan that one follows over the course of one’s working and retirement life is among the most critical decisions an individual can make. The balance between consumption and savings determines one’s overall quality of life, not

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Risk-Off, Yield-On

Risk-Off, Yield-On

🕔08:38, 1.Dec 2022

With interest rates higher amid a challenging macro environment, we see a compelling case for bond allocations and are cautious about higher-risk investments

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Are 60/40 Portfolio Returns Predictable?

Are 60/40 Portfolio Returns Predictable?

🕔16:15, 9.Nov 2022

“Returns are unforecastable,” according to the conventional wisdom. In his book A Random Walk Down Wall Street, Burton G. Malkiel famously proclaimed that a monkey throwing darts at the Wall Street Journal could select a portfolio no better or worse

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Cyclical Outlook: Prevailing Under Pressure

Cyclical Outlook: Prevailing Under Pressure

🕔09:10, 25.Oct 2022

Our baseline cyclical forecast includes shallow recessions and rising unemployment across large developed markets, with growth unlikely to bounce back quickly. Central bankers appear squarely focused on …

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The Human Factor: A Checklist of Behavioral Science Best Practices

The Human Factor: A Checklist of Behavioral Science Best Practices

🕔17:14, 9.Aug 2022

Volatile markets underscore the need for a sound investment process. Heightened uncertainty breeds bias, which can lead to irrational behavior and human error. As a steward of our clients’ capital, PIMCO is constantly looking for ways to test, challenge, and

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Active Versus Passive in Global Funds

Active Versus Passive in Global Funds

🕔15:39, 29.Jun 2022

Growing uncertainty in markets has rekindled the age-old “active vs. passive” debate. In 2017, PIMCO published results of an exhaustive study that showed active U.S. bond mutual funds had largely outperformed their median passive peers over many years, whereas active

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Anti-Goldilocks

Anti-Goldilocks

🕔10:44, 31.Mar 2022

Despite the many unknowns, we developed five main conclusions regarding the cyclical six- to 12-month outlook that we think are most relevant for investors at this stage. We will discuss the longer-run, secular ramifications of the current situation at our

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Insurance-Linked Securities – In Search of Diversification and Returns Beyond Traditional Markets

Insurance-Linked Securities – In Search of Diversification and Returns Beyond Traditional Markets

🕔07:53, 8.Feb 2022

Amid heightened volatility, many investors are concerned about the resiliency of their portfolios. Yet in today’s markets, it can be challenging to add diversification without compromising returns. Traditional diversifiers, such as high quality government bonds, offer limited return and diversification

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Investing in a Fast-Moving Cycle

Investing in a Fast-Moving Cycle

🕔10:15, 24.Jan 2022

EXECUTIVE SUMMARY • Peak fiscal policy support, and therefore peak real GDP growth, was likely realized in 2021, and the global economy now appears to be rapidly progressing toward late-cycle dynamics. Monetary policy in most regions has shifted course toward

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Opportunity Amid Transformation

Opportunity Amid Transformation

🕔10:13, 20.Dec 2021

Based on our view that the global economy is mid-cycle, we remain overweight overall risk. However, we believe with risk assets seemingly priced for compelling opportunities, they are also more vulnerable to exogenous …

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European Secular Outlook: The Prospect of More Stability

European Secular Outlook: The Prospect of More Stability

🕔11:02, 8.Dec 2021

The COVID-19 crisis spurs cohesion, but fresh challenges await The economic shock of COVID-19 and mounting concerns over climate change have fostered improved coordination among European policymakers. We believe this has reduced left tail risks and set the stage for

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An Asset Allocation Primer: Connecting Markowitz, Kelly and Risk Parity

An Asset Allocation Primer: Connecting Markowitz, Kelly and Risk Parity

🕔09:01, 29.Nov 2021

As curious as it may sound, few asset allocation primers describe portfolio models while connecting them to each other. This article does so by describing and contrasting the mechanics of standard asset allocation models, including the utility-based, Markowitz, Kelly, risk

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PIMCO’s Capital Market Assumptions, August 2021

PIMCO’s Capital Market Assumptions, August 2021

🕔09:50, 30.Aug 2021

Executive Summary Vaccine-driven reopenings propelled U.S. economic growth in the first half of this year, leading to a significant uptick in inflation. While PIMCO believes that today’s high levels of inflation will likely prove transitory, we believe the Federal Reserve

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Assessing Inflation: Theories, Policies and Portfolios

Assessing Inflation: Theories, Policies and Portfolios

🕔13:12, 5.Aug 2021

Executive Summary As inflation spiked in the second quarter of 2021, debate about its transitory or permanent nature became more heated. Yet, as is sometimes the case with broad controversies, a lack of definition goes with a lack of comprehension.

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Mid-Cycle Investing: Time to Get Selective

Mid-Cycle Investing: Time to Get Selective

🕔09:21, 20.Jul 2021

SUMMARY The global economy is in a mid-cycle expansion, following peaks in policy support and growth, and what is likely a transitory spike in inflation. We expect global growth to moderate to a still abovetrend pace in 2022. Growth-oriented assets, such as equities

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Opportunities in Long Credit for European Corporate Pension LDI Portfolios

Opportunities in Long Credit for European Corporate Pension LDI Portfolios

🕔11:55, 29.May 2020

For corporate pension funds, increased exposure to long credit could help: Close the spread duration gap: European corporate pension funds are generally underweight spread duration versus their liabilities. In the current market environment, wider spreads offer an opportunity to invest

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A Phased Market Recovery as Liquidity and Fundamentals Return

A Phased Market Recovery as Liquidity and Fundamentals Return

🕔09:40, 23.Apr 2020

The COVID-19 pandemic pummeled financial markets, but liquidity and fundamentals are coming back.  Even as the humanitarian and economic crises of the coronavirus pandemic expand, policymakers have been reacting with unprecedented speed and support, and financial markets have begun to

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From hurting to healing

From hurting to healing

🕔08:10, 10.Apr 2020

Cyclical Outlook Following the longest expansion on record, the global economy is currently plunging into what could easily become one of the deepest but also shortest recessions in modern times. However, business cycle history offers new clues for what is

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Coronavirus Economic Impact and Market Implications

Coronavirus Economic Impact and Market Implications

🕔06:38, 16.Mar 2020

Executive Summary We believe the COVID-19 outbreak will peak in May or June, or in summer, to be followed by a meaningful economic recovery. However, the path to that destination remains highly uncertain and will likely be accompanied by disruption

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Prolonging the Expansion

Prolonging the Expansion

🕔10:37, 28.Feb 2020

We discuss portfolio positioning for our outlook of economic momentum recovering in 2020, but with certain risks at elevated levels. The past decade marked a tremendous return environment for most asset classes. 2019, in particular, was a banner year for

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Seven Macro Themes for 2020

Seven Macro Themes for 2020

🕔07:00, 24.Jan 2020

The outlook for the global economy has improved over the past three months, but there may be less capacity to combat a recession when it comes. We discuss seven key macroeconomic themes we expect in 2020 and implications for investors. 

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Seven Macro Themes for 2020

Seven Macro Themes for 2020

🕔08:44, 9.Jan 2020

The outlook for the global economy has improved over the past three months, but there may be less capacity to combat a recession when it comes. We discuss seven key macroeconomic themes we expect in 2020 and implications for investors.

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Negative Rates: Negative View

Negative Rates: Negative View

🕔11:12, 23.Dec 2019

Why are negative nominal interest rates so troubling? Economic theory favors real rates, which have already been negative in most developed countries for some time. In theory, lowering the nominal policy rate into negative territory should produce many of the

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U.S. Inflation: The Undercurrents of Seemingly Calm Inflation

U.S. Inflation: The Undercurrents of Seemingly Calm Inflation

🕔15:45, 11.Dec 2019

Competing dynamics have kept U.S. inflation largely stable, but the balance may be shifting After the turbulence of the 1970s and early 1980s, U.S. inflation entered a remarkably stable period that has persisted for the past three decades. As Figure

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Beneath the Surface

Beneath the Surface

🕔12:47, 25.Nov 2019

 A reprieve in trade tensions between the U.S. and China bolstered investor confidence in October even as political uncertainty increased around the globe. Washington and Beijing announced details of a potential deal – coined as “phase one” – for the

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A Tale of Two Halves

A Tale of Two Halves

🕔09:33, 18.Oct 2019

Despite an optimistic start to September, mixed geopolitical developments weighed on investor sentiment over the month. Trade tensions between the U.S. and China eased somewhat as September began: China exempted certain U.S. agricultural products from additional tariffs, and President Donald

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The Potential and Challenges of 5G: A Global Credit Analysis

The Potential and Challenges of 5G: A Global Credit Analysis

🕔18:21, 23.Sep 2019

The world’s biggest telecommunications companies spent hundreds of billions of U.S. dollars to build the pipes that undergird the internet, yet they weren’t the big winners. Instead, the giants of search, social media, and streaming media have garnered most of

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Credit versus Equities: Investing Across the Capital Structure

Credit versus Equities: Investing Across the Capital Structure

🕔17:05, 27.Aug 2019

In depth Companies issue both debt and equity to finance their operations, and their valuations should be linked to the enterprise value of the firm. However, due to investor segmentation, the capital market imposes little discipline in valuing the two

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Strength Amid Weakness: Why Active High Yield Strategies Shine – and Especially During Downturns

Strength Amid Weakness: Why Active High Yield Strategies Shine – and Especially During Downturns

🕔11:46, 20.Aug 2019

Years of persistent low yields across much of the global fixed income market have spurred many investors to look lower down the credit spectrum in search of yield, or to increase their allocation to equities, in an effort to meet

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Monthly Market Update | August 2019

Monthly Market Update | August 2019

🕔17:42, 16.Aug 2019

The Federal Reserve lowered its target policy rate for the first time in over a decade, ending one of the longest hiking cycles in the past 30 years. While the cumulative increase in the federal funds rate of 225 basis

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How to Overcome the Structural Bias in Cash and Short-Term Investing

How to Overcome the Structural Bias in Cash and Short-Term Investing

🕔17:37, 16.Aug 2019

Behavioral scientists are skilled at analyzing why we make mistakes, and financial and investment decisions have been a ripe field to till. The challenge lies in overcoming our biases that result in poor decisions, particularly in today’s late economic cycle

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The Secular Lens: Assessing the Global Outlook and Potential Disruptions

The Secular Lens: Assessing the Global Outlook and Potential Disruptions

🕔11:38, 17.Jul 2019

Executive Summary Over the secular (three- to five-year) horizon, growth in China will likely slow somewhat, and we expect some form of resolution of the current U.S.– China trade conflict. Longer-term, though, tensions will remain, as the two nations compete

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Tapping Opportunity in Oil and Gas Infrastructure

Tapping Opportunity in Oil and Gas Infrastructure

🕔15:06, 13.Jun 2019

M idstream energy infrastructure companies have, in our view, generally emerged from the balance sheet and nancing challenges that had plagued the sector since 2014. With these issues now largely in the rearview mirror, oil and gas master limited partnerships

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Dealing With Disruption

Dealing With Disruption

🕔17:02, 2.Jun 2019

Secular Outlook 2019 Major secular drivers could disrupt the global economy and financial markets over the next three to five years. We share our views on risks and opportunities ahead.   

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Falling Angels? Credit Market Risks and Opportunities

Falling Angels? Credit Market Risks and Opportunities

🕔11:02, 15.Apr 2019

Viewpoint April 2019 U.S. corporate bond markets have transformed in the past few years as the proportion of BBB rated credit has swollen. There’s little room for error, as we noted back in January 2018. Where do we stand now?

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Emerging and Developed markets: So the last shall be first

Emerging and Developed markets: So the last shall be first

🕔11:02, 15.Apr 2019

After a rip-roaring recovery from the miserable end to last year, it is easy to think of reasons to take a more cautious view of the prospects for world equity markets. In particular, analysts have steadily lowered profit forecasts around

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Falling Angels? Credit Market Risks and Opportunities

Falling Angels? Credit Market Risks and Opportunities

🕔11:02, 15.Apr 2019

Viewpoint April 2019 U.S. corporate bond markets have transformed in the past few years as the proportion of BBB rated credit has swollen. There’s little room for error, as we noted back in January 2018. Where do we stand now?

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Emerging and developed markets: So the last shall be first?

Emerging and developed markets: So the last shall be first?

🕔11:02, 15.Apr 2019

After a rip-roaring recovery from the miserable end to last year, it is easy to think of reasons to take a more cautious view of the prospects for world equity markets. In particular, analysts have steadily lowered profit forecasts around

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The Wealth of Nations

The Wealth of Nations

🕔14:02, 29.Mar 2019

Emerging Markets Outlook Emerging markets (EM) have been fast out of the gate in 2019, recalling last year’s strong start and subsequent stumble. While we are constructive on the prospects for EM performance in the year ahead, we think the

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Flatlining at The New Neutral

Flatlining at The New Neutral

🕔14:02, 22.Mar 2019

Cyclical outlook march We believe short-term interest rates in the U.S. are now anchored in The New Neutral, as global growth keeps synching lower. 

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Risk assets rallied further in February due to optimism on US-China trade talks

Risk assets rallied further in February due to optimism on US-China trade talks

🕔11:02, 22.Mar 2019

Risk assets rallied further in February due to optimism on US-China trade talks, low volatility, and positive sentiment from the Federal Reserve’s dovish pivot in January. As US Treasury prices declined, the rate curve steepened, with two-year and 10-year rates

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What are Factors?

What are Factors?

🕔09:13, 5.Mar 2019

Multi-Factor Strategies A “factor” is a generic label for company and stock price characteristics that provide the common sources of return across a broad universe of equity securities. For example, the value factor includes stocks that are inexpensive relative to

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Defensive Versus Cyclical: The Blurring Lines

Defensive Versus Cyclical: The Blurring Lines

🕔14:02, 4.Mar 2019

Viewpoint11 For credit investors, the equity market can be an important source of information about growth expectations, and at times can serve as a leading indicator. However, recent developments in some defensive sectors – traditionally favored by equity and credit

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Late Cycle vs. End Cycle Investing

Late Cycle vs. End Cycle Investing

🕔13:02, 25.Feb 2019

Asset Allocation Views As the economic expansion aged and volatility increased throughout 2018, consensus shied from viewing the U.S. expansion as likely to continue for the foreseeable future to believing that we are in the late stages. We believe we

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CLO Markets: Opportunities Amid Risks in 2019

CLO Markets: Opportunities Amid Risks in 2019

🕔15:02, 16.Feb 2019

Viewpoint The fourth quarter of 2018 witnessed an uptick in credit market volatility, as investors grew increasingly risk-averse in the face of falling equity markets, ongoing U.S.–China trade tensions and geopolitical risks such as Brexit. Broader market weakness spilled over

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CIO Investment Outlook

CIO Investment Outlook

🕔19:02, 11.Feb 2019

Asset Allocation Outlook CIO Investment Outlook  As the economic expansion aged and volatility increased throughout 2018, consensus shifted from viewing the U.S. expansion as likely to continue for the foreseeable future to believing that we are in the late stages.

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Bank of Canada Monthly Research Update

Bank of Canada Monthly Research Update

🕔09:21, 1.Feb 2019

We propose a functional principal components method that accounts for stratified random sample weighting and time dependence in the observations to understand the evolution of distributions of monthly micro-level consumer prices for the United Kingdom (UK). We apply the method

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Monetary Policy Report

Monetary Policy Report

🕔09:21, 1.Feb 2019

The Bank’s mandate is to conduct monetary policy to promote the economic and financial well-being of Canadians. Canada’s experience with inflation targeting since 1991 has shown that the best way to foster confidence in the value of money and to

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catching down

catching down

🕔09:46, 27.Jan 2019

Monthly Market Update | January 2019  December’s equity market sell-off led global equity markets into the red, marking the first time that U.S., non-U.S. developed, and emerging market equities all ended the year in negative territory since 2008. In fact,

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Three Investment Themes for 2019

Three Investment Themes for 2019

🕔14:04, 25.Jan 2019

Maintaining flexibility, being currency aware and searching out pockets of values are themes for 2019. PIMCO’s European wealth management team recently met to discuss the state of markets and our outlook for intermediary clients in Europe. Drawing on a survey

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