The Power of Global Bonds

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ANDREW BALLS: I am Andrew Balls. I'm the Chief Investment Officer for Global Fixed Income at PIMCO.

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Global Bonds offer investors diversification across the whole of the fixed income landscape. The global bond market is close to $150 trillion in size. Within that, investors can manage risk and capture growth from different economies,

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including developed and emerging markets across interest rate markets, credit markets, and across different currencies. Put simply investing in high quality global bonds through an active approach can offer a really good opportunity. Particularly in today's environment.

Text on screen: Why invest in global bonds now?

There's a very high level of uncertainty in the global outlook amid the US Liberation Day tariffs,

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the threats to global trade, the negotiations that are ongoing, the numerous deadlines that we have. This is driving continued market volatility and there's going to be winners and losers. There'll be different opportunities across countries and across sectors.

And that's why we believe in strong, globally diversified, high quality fixed income investments.

Text on screen: Global bonds can offer stability, attractive returns, diversification, and downside protection.

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Global bonds can offer stability in this environment. They can also potentially offer very attractive returns. They offer diversification benefits and downside protection.

Text on screen: What are the key opportunities ahead?

We see great opportunities in global bonds today, and I'll highlight a few of the areas we're focused on.

Firstly, in terms of valuations, equity valuations are still high. Short term interest rates are expected to fall.

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Because of this we prefer high quality bonds. We've added duration in terms of our positioning and think this is an environment where bond yields can offer potentially attractive returns compared with equities or cash.

FULL PAGE LIST GRAPHIC: TITLE: Attractive opportunities in global bonds, LIST – Securitized assets, including agency MBS, Senior bank debt, Overweight global duration, UK and Australia rates

Second, if we look across asset classes, we think high quality securitized assets look very attractive. That includes agency mortgages in the US and securitized markets across the world.

We're selective within corporate credit. And in particular, we think that senior bank debt offers good opportunities today. In the current environment, we think it makes sense to be overweight global duration. And within the global opportunity set, we think the UK and Australia are two particularly attractive markets. We also think it makes sense to be overweight in a basket of currencies across developed markets, and also across emerging markets.

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Our goal is always to create value and deliver for our clients, and particularly in times like these.

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We have a team with global presence and local expertise. It's a team that's worked together for a very long time and across a range of market environments. Our global team has been actively managing portfolios as a group for almost 20 years. We believe now is a really good time to look at global bonds to help our clients seek stability, navigate uncertainty and benefit from global alpha opportunities.

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Disclosure

This material contains the opinions of the manager and such opinions are subject to change without notice. This material has been 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.

Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.

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