Pimco Starts Emerging-Market Debt Fund Run in ExpansionAlexis Leondis
Pacific Investment Management Co., the world’s largest active bond manager, opened a fixed-income fund today that will allocate money across a range of emerging-market debt.
Pimco Emerging Markets Full Spectrum Bond Fund, trading under the ticker symbol PFSIX, will invest in local-currency government debt as well as dollar-denominated sovereign and corporate bonds, according to a statement from the Newport Beach, California-based company. The fund will be managed by Michael Gomez, co-head of Pimco’s global emerging-markets portfolio management team, and charge 0.99 percent for its institutional shares.
“What we’re doing is offering a product that is consistent with our secular view that the opportunity set in emerging-market countries continues to be very attractive for global investors in an absolute sense and relative to the developed world,” Gomez said in a telephone interview.
Pimco has said it will pursue strategies with a global focus, in line with its “new normal” philosophy adopted in May 2009 to describe an era of lower returns, heightened government regulation, diminishing U.S. clout in the world economy and a bigger role for developing nations. Earlier this month, Bill Gross, Pimco’s founder and co-chief investment officer, called the Mexican peso a “great currency” and lauded Mexico for its low debt levels in a Feb. 5 Twitter post.
Emerging-market bond funds attracted $21.6 billion in net deposits in 2012 for a growth rate of 47 percent, excluding market appreciation, according to research firm Morningstar Inc.
As economies in the emerging markets have matured, investors are are benefiting from lower volatility, higher growth rates and stronger credit ratings, said Gomez. Pimco expects the new offering to be less volatile than an emerging-markets fund that only focuses on one asset class within fixed income, Gomez said.