Pimco Ready to Trim Emerging-Market Corporate Debt on China

Pacific Investment Management Co., manager of the world’s biggest mutual fund, is prepared to cut its holdings of emerging-market corporate debt next year on concern a flood of new sales and further economic slowdown in China will put an end to a 12-month rally in the securities.

The plunge in yields to a record 4.73 percent since the Federal Reserve unveiled a third round of asset purchases known as quantitative easing in September means some corporate bond prices don’t accurately reflect the chances of further economic deterioration in Asia or Europe, said Brigitte Posch, who helps manage about $92 billion in emerging-market corporate bonds for Newport Beach, California-based Pimco.