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Advisor Playbook

Markets are complex. Give your clients clarity. Enhance your client conversations with our quarterly look at key market trends, reinforced with education and backed by the expertise of PIMCO.

Our View

We expect bonds to do well across a range of environments. Amid uncertainty, investors, especially those with meaningful cash allocations, should consider taking advantage of bonds’ attractive valuations and defensive properties.
Watch Brian Kyle, SVP and lead of PIMCO's advisor solutions team, walk through timely charts that are supporting client conversations now.

Higher Returns Have Historically Followed Higher Starting Yields

What the Chart Shows:

There is a 94% correlation between starting bond yields (blue) and forward returns (green), suggesting that future bond market returns closely follow starting yields.

What it Means for Investors:

With starting yields meaningfully higher than the average yield since 2010, investors could stand to benefit from attractive return potential in fixed income investments going forward

Yield vs 5-year forward return

Past performance is not a guarantee nor a reliable indicator of future performance.
Chart is provided for illustrative purposes and is not indicative of the past or future performance of any PIMCO product. As of 30 June 2025. SOURCE: Bloomberg, PIMCO. Yield and return are for the Bloomberg U.S. Aggregate Bond Index. It is not possible to invest directly in an unmanaged index.

Attractive Municipal Bond Yields Signal Opportunity

What the chart shows:

The chart shows the historical yields offered by investment grade and high yield municipal bonds, while highlighting the attractive returns that follow local peaks in yield, much like today

What it Means for Investors:

While challenged performance has historically driven outflows from municipal bonds, elevated yields resulting from these episodes rewarded patient investors and delivered attractive returns going forward.

Attractive Municipal Bond Yields Signal Opportunity

As of 30 June 2025. SOURCE: Bloomberg, PIMCO, Morningstar. Performance periods longer than one year are annualized. Past performance is not a guarantee nor a reliable indicator of future performance.

Municipals are represented by the Bloomberg Municipal Bond Index (IG Muni) and the Bloomberg High Yield Municipal Bond Index (HY Muni).

1Highlighted dates are 31 December 2008, 31 October 2013, 31 March 2020, and 31 October 2023 and are intended to illustrate returns following points in time when municipal bond yields reached local peaks. Morningstar categories used to represent municipal bond market flows are High Yield Muni, Muni National Short, Muni National Interm, and Muni National Long.

Going Global: Expanding into a Global Opportunity Set May Improve Diversification and Return Potential

What the chart shows:

The charts show the size, composition, and historical returns across the global bond market

What it Means for Investors:

Expanding from a domestic investment universe to a global one may enhance return potential by diversifying a portfolio’s risk across a broader array of rate environments, growth dynamics, and credit profiles.

Over 60% of the global bond market is outside the U.S.

As of 30 September 2024. SOURCE: PIMCO, Haver, BIS. Past performance is not a guarantee or reliable indicator of future results. 

As of 30 June 2025. SOURCE: Bloomberg. Past performance is not a guarantee or reliable indicator of future results. *All indices on a U.S. dollar hedged basis, except for Local and External EM proxies. United States represented by Bloomberg U.S. Agg Index USD Hedged, Eurozone represented by Bloomberg Euro Agg Index USD Hedged, Japan represented by Bloomberg Japanese Agg Index USD Hedged, Australia represented by Bloomberg Australian Agg Index USD Hedged, Canada represented by Bloomberg Canadian 300 Index USD Hedged, Local EM represented by JPMorgan GBI-EM Global Diversified Index USD Unhedged, External EM represented by JPMorgan EMBIG Diversified Index USD Unhedged, United Kingdom represented by Bloomberg Sterling Agg Index USD Hedged. 

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