Relevance of strategy
This fund provides an active approach to invest in the preferred and capital securities market, with a bias on European AT1s.
PIMCO is well known as a leading global asset management firm in active fixed income investing, managing over US$2tn of assets with majority in fixed income solutions.
The PIMCO GIS Capital Securities Fund is an actively managed bond strategy that invests primarily in global investment grade subordinated debt instruments particularly Tier 1, Tier 2, and contingent convertible (CoCo) bonds, with no credit rating or currency constraints. The fund typically has around 2/3 portfolio allocated to European AT1s.
The fund’s investment process identifies appropriate capital securities through 3 screens. The first screen is top-down view of the economy and global financial markets. The second screen is the bottom-up research incorporating an evaluation of the relative strength of balance sheets and company earnings power together with access and on-going dialogues with senior management teams of the financial institutions. The third screen is valuation of the security. The fund has a concentrated portfolio of >240 holdings.