Fund Rationale: PIMCO GIS US High Yield Bond Fund

PIMCO GIS US High Yield Bond Fund (the “Fund”)
SGD Hedged Institutional Accumulation Shares (ISIN: IE000S3T92E2) | Daily Price & Charts (SGD)
USD Institutional Accumulation Shares (ISIN: IE0002460974) | Daily Price & Charts (USD)
Fund Manager Page

Endowus has selected the Fund as it:

  • Provides diversified exposure to the US high yield market by employing a long term, total return approach with a focus on reducing downside risk;
  • Has an experienced portfolio management team that employs a team-based approach and leverages on PIMCO’s firm-wide research and analytics capabilities in first quartile performance against its peers;
  • Runs on a highly institutionalised investment process with inputs from different parts of the firm, minimising key-man risk; and
  • Offers access to institutional share class with no trailer fees to achieve the lowest possible fees.

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Key Information

Fund Objective: Seeks to maximise total return while limiting risk by investing at least two-thirds of its assets in a diversified portfolio of USD denominated high yield corporate bonds, with a maximum of 30% of its assets in securities rated lower than B.

Suitability: Investors who are looking to maximise total return through a combination of both income and capital growth, are looking for a diversified exposure to high yield fixed income markets, are willing to accept the risks and volatility associated with investing in such markets, and have an investment horizon over the medium to long term.

Cost (SGD, USD):

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  1. Total Fund-level Fees include fund management fee of 0.55%.
  2. This is an institutional share class that offers the lowest possible fees. There are no trailer fees for this institutional share class. 
  3. Endowus does not charge a preliminary sales charge or any other additional fees, other than the all-in Endowus Access Fee.

Fund Characteristics

Fund Inception: 28 May 1998
Share Class Inception: 23 July 2021
Benchmark: ICE BofA US High Yield Constrained Index

Fund AUM: SGD 5.71bn
Source: MorningStar as of 30 June 2021. Please refer to the FMC page for the most updated AUM.

Regional Allocation:

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Sector Allocation:

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Source: MorningStar as of 31 March 2021. Allocation data indicate actual exposure as a percentage of the Fund's total Net Asset Value. Please refer to the Fund Manager Page for the most updated information on Fund Holdings and Breakdown. 

Selection Criteria

Endowus has selected PIMCO GIS US High Yield Bond Fund  as it provides diversified exposure to the US high yield market by employing a long term, total return approach with a focus on reducing downside risk. The Fund is benchmark-oriented and seeks to generate the majority of its performance from bottom up credit selection, as well as corporate industry selection. In addition, the Fund’s core holdings are in credits with relatively low perceived risk of default. Since inception, the Fund has realised first quartile performance compared to its peers, and a much lower default rate than the US High Yield market in general. 

The experienced portfolio management team employs a team-based approach and leverages PIMCO’s firm-wide research and analytics capabilities. The PM team has on average 22 years of investment experience. The lead Portfolio Manager Andrew Jessop has been managing the fund since 2010 and he has 32 years of investment experience and has gone through multiple market cycles in the US High Yield space. They are supported by PIMCO’s seasoned team of credit research analysts with  an average 14 years of experience, who analyse each issuer and generate independent credit ratings that are forward-looking. Across the firm, PIMCO has deep pockets of specialist knowledge that the PM team can draw upon in different situations. We also like that the investment process is highly institutionalised with inputs from different parts of the firm and thus removes dependency on any key individuals. 

Endowus has worked with PIMCO to launch the SGD Institutional share class to offer low cost access to our investors. The Fund is one of the cheapest US High Yield Funds retail investors in Singapore can access. 

Investors can consider using this Fund in a barbell approach with high grade bonds on one side and high yield bonds on the other to achieve an optimal mix. It is important to note that investing in a US high yield fund would subject you to more credit risk concentrated in the US. It is relevant to consider the Fund in diversifying your holdings with allocations to other types of investment, such as global investment grade corporate bonds, government bonds, and equities.

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Updated by Endowus: September 2021

** Disclaimer (as of 31 August 2021): All content found on this page is for information purposes only and should not be considered as an offer, solicitation or advice for the purchase or sale of any investment products. It is recommended that you seek financial advice as to the suitability of any investment. Whilst Endow.us Pte. Ltd. (“Endowus”) has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies or typographical errors. Any opinion or estimate above is made on a general basis and none of Endowus, nor any of its affiliates, representatives or agents have given any consideration to nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Opinions expressed herein are subject to change without notice.  

Investment involves risk. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Past performance is not an indicator nor a guarantee of future performance. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund. 

Please note that the above information does not purport to be all-inclusive or to contain all the information that you may need in order to make an informed decision. The information contained herein is not intended, and should not be construed, as legal, tax, regulatory, accounting or financial advice.