Strategies

Emerging Markets Full Spectrum Bond Strategy​​

PIMCO’s comprehensive asset allocation solution for emerging markets fixed income
Emerging markets (EM) can offer attractive opportunities for fixed income investors, but navigating idiosyncratic country risks, accounting for the interplay of broader factors at work on global markets, and determining the right allocation can be extremely complex, particularly as the breadth of choices available to investors has increased over the past few years. In addition, the landscape is evolving. U.S. dollar-denominated sovereign debt is being issued by new countries coming to international markets for the first time. Local currency-denominated sovereign debt is being issued in larger sizes and with longer maturities in many nations. Corporate debt issued by firms within these countries now rivals that seen in corresponding sovereign markets. As a result, relative value can shift dramatically within and among these asset classes, and navigating tipping points can be difficult for most investors.

The PIMCO Emerging Markets Full Spectrum Bond Strategy is a comprehensive solution for investing in EM fixed income that dynamically allocates across the various debt classes. The strategy has the ability to move quickly, tactically and aggressively in an effort to exploit fluid relative value across the universe of emerging market debt opportunities, thus benefiting investors by serving as a comprehensive EM fixed income asset allocation solution.

Emerging markets fixed income - a compelling opportunity

Investment philosophy and approach - constructing the portfolio

An experienced, global team of emerging markets experts

Applications for the strategy

How To Invest

Related Strategies

Fixed Income

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Disclosures

Past performance is not a guarantee or a reliable indicator of future results. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk; investments may be worth more or less than the original cost when redeemed. Equities may decline in value due to both real and perceived general market, economic and industry conditions. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Investing in distressed companies (both debt and equity) is speculative and may be subject to greater levels of credit, issuer and liquidity risks, and the repayment of default obligations contains significant uncertainties; such companies may be engaged in restructurings or bankruptcy proceedings. Entering into short sales includes the potential for loss of more money than the actual cost of the investment, and the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the portfolio. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. Diversification does not ensure against loss. The value of most bond strategies and fixed income securities are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise.

There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. Portfolio structure is subject to change without notice and may not be representative of current or future allocations.

JPMorgan Government Bond Index-Emerging Markets Global Diversified Index (Unhedged) is a comprehensive global local emerging markets index, and consists of regularly traded, liquid fixed-rate, domestic currency government bonds to which international investors can gain exposure. The JPMorgan Emerging Markets Bond Index Global is an unmanaged index which tracks the total return of U.S.-dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady Bonds, loans, Eurobonds, and local market instruments. JPMorgan Corporate Emerging Markets Bond Index (CEMBI) Diversified is a uniquely-weighted version of the CEMBI index. It limits weights of those index countries with larger corporate debt stocks by only including a specified portion of these countries’ eligible current face amounts of debt outstanding. The CEMBI Diversified results in well-distributed, more balanced weightings for countries included in the index. The countries covered in the CEMBI Diversified are identical to those in the CEMBI, which is a global, liquid corporate emerging markets benchmark that tracks U.S.-denominated corporate bonds issued by emerging markets entities. The MSCI Emerging Markets Total Return Net Index is a free float-weighted equity index covering more than 2,700 securities in over 20 emerging market countries. The index is comprised of large, medium, and small cap companies across multiple sectors. It is not possible to invest directly in an unmanaged index.

This material contains the current opinions of the manager and such opinions are subject to change without notice. This material is distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO and YOUR GLOBAL INVESTMENT AUTHORITY are trademarks or registered trademarks of Allianz Asset Management of America L.P. and Pacific Investment Management Company LLC, respectively, in the United States and throughout the world. ©2013, PIMCO.