Pimco launches credit fund that minimises interest rate risk

Pimco has launched a GIS diversified Income duration hedged fund, which aims to help investors address concerns about rising interest rates and provide diversified global credit exposure.

The fund, to be managed by portfolio manager Eve Tournier, invests across multiple fixed income sectors including investment grade and high-yield corporate bonds, emerging market debt, bank loans, convertible bonds, municipal bonds and asset-backed securities.

It aims to minimise interest rate risk by focusing on floating and variable rate securities, short duration securities and combinations of fixed rate bonds and derivative instruments.

Tournier says: “Given the deterioration in sovereign balance sheets and mounting global inflationary pressures, interest rates are likely to move higher over the medium-to long-term horizon. As such, Pimco has been de-emphasizing interest rate risk in favour of a much stronger appetite for credit risk and other sources of “safe spread” to insulate portfolios from the impact of rising interest rates.”

The fund has been added to Pimco’s Dublin-domiciled global investor series fund range, comprising 42 sub-funds. Tournier also manages the Pimco GIS diversified income fund.