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Fund Rationale: PIMCO GIS Global Bond Fund

PIMCO GIS Global Bond Fund
SGD Hedged Institutional Class Accumulation Shares (ISIN: IE00B3Q8VQ13)
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Introductory information
The PIMCO GIS Global Bond Fund (the “Fund”) is a diverse, actively managed portfolio of global fixed income securities. The Fund invests primarily in a diversified portfolio of investment grade bonds denominated in major world currencies. The Fund’s extensive opportunity set can offer significant potential for consistent outperformance over its benchmark, the Bloomberg Barclays Global Aggregate (SGD Hedged) Index, benefiting from the manager’s views on interest rates, currencies, credit and country trends. The aim of the Fund is to increase the value of your investment over the long term and to earn income within the Fund. The Fund is suitable for investors seeking a gradual long-term appreciation of capital and who prefer a relatively lower degree of volatility.

The inception date of the oldest share class of the Fund is 12 March 1998, while the SGD Class I Accumulation shares were incepted on 8 July 2009. As of September 2020, the Fund managed a total asset of SGD 22.1bn.

 

Characteristics
The Fund invests primarily in investment grade Fixed Income Instruments, but may invest up to 10% of its total assets in Fixed Income Instruments that are rated lower than Baa by Moody's or lower than BBB by S&P or equivalently rated by Fitch, but rated at least B by Moody's or S&P or equivalently rated by Fitch (or, if unrated, determined by the Investment Advisor to be of comparable quality) with the exception of mortgage-backed securities for which there is no minimum credit rating requirement. Although there is no minimum credit rating requirement for mortgage-backed securities, below investment grade mortgage-backed securities will be taken into account when calculating the aforementioned 10% limit in below investment grade securities. The Fund may invest without limit in securities of issuers that are economically tied to countries with developing, or emerging market economies.

The Fund may hold both non-USD denominated Fixed Income Instruments and non-USD denominated currency positions. Non-USD currency exposure is limited to 20% of total assets.

 

Background information and cost
The Fund has a unified all-in management fee of 49bps per annum (0.49% p.a.) and Endowus do not charge a preliminary sales charge. For reference, the USD Class E (ISIN:IE00B11XZ210) share class of the Fund most typically distributed to non-institutional clients has a unified all-in management fee of 1.39% and a preliminary sales charge of up to 5%.

PIMCO are one of the world’s premier fixed income investment managers. Since their founding in 1971 in California, they have continued to bring innovation and expertise to their partnership with clients seeking the best investment solutions. Today PIMCO’s professionals work in 17 offices across the globe, united by a single purpose: creating opportunities for investors in every environment.

 

Selection criteria for Endowus
Endowus have selected the PIMCO GIS Global Bond Fund because of its geographic and sector diversification, experienced management team, and a strong track record of consistent and regular outperformance over its benchmark and against investible peers such including ETFs. This is particularly important in a lower-risk, lower-return asset class such as fixed income where outperformance adds significantly to long-term returns to the overall portfolio.

Within the Endowus portfolio, we measure the correlation and the covariance between asset classes and funds selected to optimise the portfolio to obtain the highest risk-adjusted returns. The Global Bond Fund provides a low correlation and highly stable, low volatility return to the portfolio. It is among the most diversified global bond fund available and takes the best opportunities in the global investible universe to maximise returns with limited risk exposure. Therefore, through cycles and under all market conditions, the Global Bond Fund is able to provide consistent returns from exposure to the whole market.  

Updated by Endowus: 26 Oct 2020

** Disclaimer
Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Any opinions expressed reflect a judgment at the original date of publication by us and are subject to change without notice.

The prospectus, profile statement, product highlight sheet, fund factsheet or other offer or product documents may contain references about the expected risk tolerance of their target investors. These are in no way indicative of how we at Endowus have assessed your risk tolerance based on your stated objectives and financial situation. Endowus accepts no responsibility for investment decisions made in response to the expected risk tolerance levels mentioned in the product or offer documents.