We're neutral on energy bonds. by Dan Ivascyn

We're neutral on energy bonds.

Dan Ivascyn

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Categorized in : Business

Weather patterns are having a direct impact on businesses and leading to massive uncertainty over the short-term and long run.

That is an area where you will see some underperformance due to t... by Dan Ivascyn

That is an area where you will see some underperformance due to the climate change issue.

We believe that corporate credit is fundamentally weak and could overshoot to the downside if the economy deteriorates.

We think developed government bond yields are too low and could easily reverse so we are comfortable with low rate exposure.

Our various models do see an uptick in recession probability but... by Dan Ivascyn

Our various models do see an uptick in recession probability but are flashing yellow versus red.

It's about trying to limit the downside when fear returns to the... by Dan Ivascyn

It's about trying to limit the downside when fear returns to the market and volatility rises.

Based on valuations, we went into high-yield and investment-grade before the Brexit referendum, we’ve seen a big, powerful rally in risk assets tied to more central bank accommodation, in the wake of Brexit, so we are selling into it.

Pimco is not going on an M&A binge, although Manny provides great perspective on alternative businesses, he also appreciates the traditional business of fixed-income at Pimco.

In a world where German and Japanese 10-years are at negative (yields), our rates can certainly go lower in the face of global growth concerns and uncertainty.

We are reacting to considerable dislocation in financial markets, there is a lot of relative value and there are certain names in the banking sector that is moving a lot.

We are carefully adding some positions in areas that are higher-quality credits and have underperformed such as triple-A CMBS and banks and brokers such as JPMorgan and Wells Fargo, those are examples of higher-quality names.

We do think in certain areas of the corporate credit markets that people have been overreacting and as a result, we are responding, we do think there's been an overreaction in certain corporate credits and we are there to bid bonds which is not too dissimilar to what we did last year when there was a lot of volatility in Emerging Markets, particularly in Russia.

The Fed likely goes tomorrow and will use dovish language and will likely bring down their ‘dot plot’ a little bit.

We've been adding some oil-related and energy-related names in ou... by Dan Ivascyn

We've been adding some oil-related and energy-related names in our broader mandates.

The Income Fund benefited from defensive positioning in the energy sectors and the recovery in the higher quality segments of the emerging markets.

When you talk to clients and you talk to the media, at times, you reduce investment calls down to a sound bite or very simple views on the world.

Our investment process is driven by a longer-term orientation where we draw on diversified sources of alpha, with an intense focus on down side protection and capital preservation.

Declining oil prices will have a clear downside impact on global inflation readings next year, in most developed economies, headline inflation will likely go into negative readings in the early part of 2015, only to bounce back toward positive core inflation readings as we go into late 2015 and early 2016.

Although we expect headline inflation( year-over-year) to trough below the zero bound in the next few months, this is more than reflected in TIPS valuations.

We've been very stable in implementing our investment process from the first day of Bill's departure, from that perspective, we've been in very good shape.