Economic and Market Commentary

The Power of Flexibility in Multi-Sector Credit

24/07/2023

Sonali Pier

Get a quick overview of current credit markets, why we favor high quality and some parts of the high yield market, and the importance – and power – of a flexible multi-sector approach in today's global markets.

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Text on screen: Sonali Pier, Portfolio Manager, Multi-Sector Credit

Pier: Today in credit, we are seeing tighter financial conditions, rising geopolitical risks and diverging growth cycles, all leading to greater dispersion. Within credit, we prefer high quality securitized investment grade and some parts of the high yield market.

Text on screen: Credit areas we prefer offer: 1) High starting yields, 2) Strong fundamentals

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These areas offer high starting yields as well as relatively strong fundamentals. We have some caution in areas like bank loans and private credit that have grown tremendously over the recent years. That said, in a multisector credit mandate with flexibility,

Text on screen: Multi-sector credit offers flexibility to rotate into areas of opportunity

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we think these will be areas that there will be opportunities in the future and remain poised to take advantage of them.

At PIMCO we have been managing global multisector credit mandates for the last 20 years and to help clients navigate cycles, we're not looking to stretch for yield but rather seek resilience and outperform across a variety of market environments.

Text on screen: Having flexibility in today's global environment is key

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The key takeaway investors is having flexibility in today's global environment where there is less certainty and less synchronization. Broad based monetary and fiscal policy is ending, which may lead to greater dispersion.

The breadth and depth of the PIMCO platform allow the multisector credit team to pivot across a wide array of credit sectors as valuations shift.

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Disclaimer

This material contains the opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

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