Fund launched to insulate against rising interest rates

Pimco_logoBond house Pimco has launched a new fund designed to help investors address concerns about rising interest rates.

The Pimco GIS Diversified Income Duration Hedged Fund will take advantage of the opportunities offered by a world characterised by multi-speed growth with a wider distribution of outcomes across capital markets.

It will adopt a  flexible approach to investing across multiple fixed income sectors including investment grade and high yield corporate bonds, emerging market debt, bank loans, convertible bonds, municipal bonds and asset-backed securities.

The new fund will seek to minimise interest rate risk by focusing on floating and variable rate securities, short duration securities and combinations of fixed rate bonds and derivative instruments.

The fund will be managed by Eve Tournier, executive vice president and portfolio manager focusing on corporate bonds and loans.

Tournier said: “Given the deterioration in sovereign balance sheets and mounting global inflationary pressures, interest rates are likely to move higher over the medium-to long-term horizon.

"Pimco has been de-emphasising interest rate risk in favour of a much stronger appetite for credit risk and other sources of 'safe spread' to insulate portfolios from the impact of rising interest rates."

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