Staying the Course: An Update on PIMCO

Many people are interested in an ongoing assessment of PIMCO and PIMCO funds, given the developments within the firm over the past year and the attention it has garnered in the media. The recent Wall Street Journal article, “Pimco Total Return Fund Outpaces Most of Its Rivals,” may come as a surprise to those who have been reading PIMCO’s press.

Somewhere amidst all the upheaval, PIMCO Total Return has quietly managed to outperform 92 percent of its peers since Bill Gross left at the end of September.1

Staying the Course Update on PIMCO

Starting with the departure of Mohamed El-Erian in January 2014, PIMCO has provided no shortage of headline stories, from Bill Gross’s leave-taking (and the events leading up to it) to performance and outflows in the Total Return fund. The “sky is falling” nature of the reporting is one of the reasons we discourage clients from paying too much attention to the financial media.

Unfortunately, people who had knee-jerk reactions and exited the fund last year out of panic or fear missed out. This highlights some important hallmarks of our investment approach at Hewins Financial — a long-term outlook and a rigorous, unbiased research process.

PIMCO Total Return, previously managed by Bill Gross, now has three co-CIOs at the helm: Scott Mather, CIO U.S. Core Strategies, Mark Kiesel, CIO Global Credit and Mihir Worah, CIO Real Return and Asset Allocation. So far this year, the fund’s non-core positioning in high yield, Treasury Inflation-Protected Securities (TIPS) and emerging debt have contributed to solid outperformance versus the bond benchmark and 95 percent of its peers.2

Does this mean that PIMCO is completely out of the woods and no longer bears watching? Of course not. As with any fund, research is necessarily ongoing. In this case, it will be important to look for continuity of firm leadership and fund management, and stabilization in fund flows, among other things.

So far, at least, the sky hasn’t fallen.

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional. Hewins does not provide tax, accounting or legal services.
Martha Post
Martha Post

CFA | Principal, Chief Operating Officer

Martha Post, CFA, is a Principal and the Chief Operating Officer for Hewins Financial Advisors, based in Redwood City, CA. Martha oversees Hewins' operations and client service activities and also serves as a member of its Investment Committee, with nearly 30 years of experience in investment management, research and analysis.

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Staying the Course: An Update on PIMCO

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