Jerome Schneider, Head of Short-Term Portfolio Management, PIMCO met with Julie Cooling, Founder & CEO, RIA Channel to discuss the importance of active fixed income management.
“Investors are faced with a litany of decisions,” says Schneider on the impact of the mature market. While rising rates increase the attractiveness of fixed income, they also tend to bring more volatility to asset classes like high yield and emerging markets. PIMCO aims to create portfolios that earn income, but also offer a path of lower volatility to investors.
PIMCO hosts several active fixed income solutions for advisors. MINT, with nearly $12 billion in assets, is the largest actively managed ETF out there. Schneider explains that advisors are using the ETF to put excess cash to work, while beating out the return of a typical money market fund. Low duration ETF, LDUR acts as a more structured extension of MINT. Although the Fed is presently taking a more neutral stance, Schneider predicts that markets will see another rate hike before the end of the year.