Leaving PIMCO.com

You are now leaving the PIMCO website.

Skip to Main Content
Economic and Market Commentary

Investing Across the Spectrum: Part 1

Mike Cudzil, portfolio manager, fixed income, and Jason Steiner, portfolio manager, alternative credit, discuss the current real estate landscape, what opportunities exist in real estate, and why PIMCO is well-positioned to respond quickly to these opportunities.

Text on screen: PIMCO

Text on screen: PIMCO provides services only to qualified institutions and investors. This is not an offer to any person in any jurisdiction where unlawful or unauthorized.

Voice-over: From inflation to interest rates, today’s ongoing disruptions present opportunities for investors.

In this series, our portfolio managers explore how PIMCO’s deep expertise across public and private markets gives investors the flexibility to navigate the ever-evolving landscape.

Text on screen: Finding Opportunities Amid Market Fluctuations

Images on screen: Residential real estate, residential neighborhood

Text on screen: Mike Cudzil, Portfolio Manager, Fixed Income

Cudzil: Agency mortgages are attractive. So there’s a reason for that. There’s some pretty terrible technicals. The Fed’s unwinding their balance sheet. And more recently, there’s the banks that went into receivership, and the FDIC needs to unwind some of these portfolios, and so there’s this overhang in the agency mortgage market.

This leads to an opportunity for us to deploy capital at PIMCO, adding agency mortgages everywhere we can.

Text on screen: Jason Steiner, Portfolio Manager, Alternative Credit

Steiner: Yeah, it’s interesting, this banking crisis is probably the first crisis that we’ve seen in a couple of years, where mortgage credit hasn’t kind of been at the forefront. We had the Covid situation where concerns about credit broadly caused nonagency mortgages to trade off and mortgage loans to trade off, and that created a good opportunity.

Recently, we’re really taking our cues from the agency mortgage market. As that market cheapens, we cheapen kind of in kind with that. And that creates all sorts of interesting opportunities.

Text on screen: Leveraging Securitization and Insights to Create Value

Images on screen: Residential real estate

Steiner: I think the best example of how we’ve created value for our clients on the private side is really in the arbitrage opportunities that exist when we take private market assets and bring them into the public markets. So through the securitization process.

We have advantages not just because we’re investors in the agency mortgage market but also because when I buy mortgage loans and then create bonds off of them and sell them into the fixed income markets, we have advantages being a very large fixed income manager in terms of where PIMCO’s appetite might be. It can give us insight into where demand might be or where interest might be from other third party fixed income managers, and that helps us time and pace and scale our business into a demand cycle that is uncertain, and we want to plan for it. We don't want to buy billions of dollars of loans as spreads are widening.

Cudzil: Yeah, and you find out where they’re trying to narrow the box, where they’re trying to get the agencies out of the market, and where that – it’s just squeezing air in the balloon from one end to the other. So if the agencies are exiting the cash out refi market, or if they’re exiting the investor loan market, that’s opportunities for Jason and that’s kind of the direction to travel.

Text on screen: Harnessing Analytics to Quickly Respond to Opportunities

Images on screen: Residential neighborhood

Cudzil: We’re always pricing opportunities in markets, so we always kind of know where we think opportunities are, what we want to participate in, and where we see value.

When an opportunity comes in, and it’s a particular area that we’re excited about, we’re ready to respond almost instantaneously. It’s something that we’ve already done the work on, and it’s just a matter of evaluating a particular CUSIP in the space which we’re already excited about. And so it’s something that we’re just doing on a continuous basis.

When these recent opportunities with some of these banks that went into receivership or some assets that came up for sale, we can respond and send prices back in real time.

Steiner: To Mike’s point, we have to be in the market every day, because we depend on mortgage supply to help fill that asset void.

What that’s led to is a decade plus of development of analytics, a decade plus of the resources and the team that really support that continuous need to be in the business and in the market every day. There’s never an environment where Mike and I are going to wake up one day and say, we haven’t bought mortgages in three weeks.

There’s no tourists in the mortgage market at PIMCO. Other platforms, maybe when yields get too low or credit gets too risky, they step away. We’ll always find homes for that at PIMCO. And that keeps us in the market every day. And that lets us respond very quickly when unexpected opportunities come around.

Text on screen: For more insights and information, visit pimco.com

Text on screen: PIMCO


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. 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.  Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. 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.

There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.

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.

PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This is not an offer to any person in any jurisdiction where unlawful or unauthorized. | Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660 is regulated by the United States Securities and Exchange Commission. | PIMCO Europe Ltd (Company No. 2604517, 11 Baker Street, London W1U 3AH, United Kingdom) is authorised and regulated by the Financial Conduct Authority (FCA) (12 Endeavour Square, London E20 1JN) in the UK. The services provided by PIMCO Europe Ltd are not available to retail investors, who should not rely on this communication but contact their financial adviser. | PIMCO Europe GmbH (Company No. 192083, Seidlstr. 24-24a, 80335 Munich, Germany), PIMCO Europe GmbH Italian Branch (Company No. 10005170963, Corso Vittorio Emanuele II, 37/Piano 5, 20122 Milano, Italy), PIMCO Europe GmbH Irish Branch (Company No. 909462, 57B Harcourt Street Dublin D02 F721, Ireland), PIMCO Europe GmbH UK Branch (Company No. FC037712, 11 Baker Street, London W1U 3AH, UK), PIMCO Europe GmbH Spanish Branch (N.I.F. W2765338E, Paseo de la Castellana 43, Oficina 05-111, 28046 Madrid, Spain) and PIMCO Europe GmbH French Branch (Company No. 918745621 R.C.S. Paris, 50–52 Boulevard Haussmann, 75009 Paris, France) are authorised and regulated by the German Federal Financial Supervisory Authority (BaFin) (Marie- Curie-Str. 24-28, 60439 Frankfurt am Main) in Germany in accordance with Section 15 of the German Securities Institutions Act (WpIG). The Italian Branch, Irish Branch, UK Branch, Spanish Branch and French Branch are additionally supervised by: (1) Italian Branch: the Commissione Nazionale per le Società e la Borsa (CONSOB) (Giovanni Battista Martini, 3 - 00198 Rome) in accordance with Article 27 of the Italian Consolidated Financial Act; (2) Irish Branch: the Central Bank of Ireland (New Wapping Street, North Wall Quay, Dublin 1 D01 F7X3) in accordance with Regulation 43 of the European Union (Markets in Financial Instruments) Regulations 2017, as amended; (3) UK Branch: the Financial Conduct Authority (FCA) (12 Endeavour Square, London E20 1JN); (4) Spanish Branch: the Comisión Nacional del Mercado de Valores (CNMV) (Edison, 4, 28006 Madrid) in accordance with obligations stipulated in articles 168 and  203  to 224, as well as obligations contained in Tile V, Section I of the Law on the Securities Market (LSM) and in articles 111, 114 and 117 of Royal Decree 217/2008, respectively and (5) French Branch: ACPR/Banque de France (4 Place de Budapest, CS 92459, 75436 Paris Cedex 09) in accordance with Art. 35 of Directive 2014/65/EU on markets in financial instruments and under the surveillance of ACPR and AMF. The services provided by PIMCO Europe GmbH are available only to professional clients as defined in Section 67 para. 2 German Securities Trading Act (WpHG). They are not available to individual investors, who should not rely on this communication. | PIMCO (Schweiz) GmbH (registered in Switzerland, Company No. CH-, Brandschenkestrasse 41 Zurich 8002, Switzerland). The services provided by PIMCO (Schweiz) GmbH are not available to retail investors, who should not rely on this communication but contact their financial adviser. | PIMCO Asia Pte Ltd (Registration No. 199804652K) is regulated by the Monetary Authority of Singapore as a holder of a capital markets services licence and an exempt financial adviser. The asset management services and investment products are not available to persons where provision of such services and products is unauthorised. | PIMCO Asia Limited is licensed by the Securities and Futures Commission for Types 1, 4 and 9 regulated activities under the Securities and Futures Ordinance. PIMCO Asia Limited is registered as a cross-border discretionary investment manager with the Financial Supervisory Commission of Korea (Registration No. 08-02-307). The asset management services and investment products are not available to persons where provision of such services and products is unauthorised. | PIMCO Investment Management (Shanghai) Limited. Office address: Suite 7204, Shanghai Tower, 479 Lujiazui Ring Road, Pudong, Shanghai 200120, China (Unified social credit code: 91310115MA1K41MU72) is registered with Asset Management Association of China as Private Fund Manager (Registration No. P1071502, Type: Other). | PIMCO Australia Pty Ltd ABN 54 084 280 508, AFSL 246862. This publication has been prepared without taking into account the objectives, financial situation or needs of investors. Before making an investment decision, investors should obtain professional advice and consider whether the information contained herein is appropriate having regard to their objectives, financial situation and needs. | PIMCO Japan Ltd, Financial Instruments Business Registration Number is Director of Kanto Local Finance Bureau (Financial Instruments Firm) No. 382. PIMCO Japan Ltd is a member of Japan Investment Advisers Association, The Investment Trusts Association, Japan and Type II Financial Instruments Firms Association. All investments contain risk. There is no guarantee that the principal amount of the investment will be preserved, or that a certain return will be realized; the investment could suffer a loss. All profits and losses incur to the investor. The amounts, maximum amounts and calculation methodologies of each type of fee and expense and their total amounts will vary depending on the investment strategy, the status of investment performance, period of management and outstanding balance of assets and thus such fees and expenses cannot be set forth herein. | PIMCO Taiwan Limited is an independently operated and managed company. The reference number of business license of the company approved by the competent authority is (112) Jin Guan Tou Gu Xin Zi No. 012. The registered address of the company is 40F., No.68, Sec. 5, Zhongxiao East Rd., Xinyi District, Taipei City 110, Taiwan (R.O.C.), and the telephone number is +886 2 8729-5500. | PIMCO Canada Corp. (199 Bay Street, Suite 2050, Commerce Court Station, P.O. Box 363, Toronto, ON, M5L 1G2) services and products may only be available in certain provinces or territories of Canada and only through dealers authorized for that purpose. | PIMCO Latin America Av. Brigadeiro Faria Lima 3477, Torre A, 5° andar São Paulo, Brazil 04538-133. | No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world. ©2023, PIMCO.


Mike Cudzil, portfolio manager, fixed income, and Jason Steiner, portfolio manager, alternative credit, discuss the current real estate landscape, what opportunities exist in real estate, and why PIMCO is well-positioned to respond quickly to these opportunities.

Investing Across the Spectrum: Part 2

Investing Across the Spectrum: Part 3

Featured Participants

Tell us a little about you to help us personalize the site to your needs.

Terms and Conditions

Please read and acknowledge the following terms and conditions:
{{!-- Populated by JSON --}}
Select Your Location


  • The flag of Canada Canada

Europe, Middle East & Africa