Ready for Anything
Bonds Are Back
A Strong Start for Bonds
What the Chart Shows
Year-to-date (YTD) performance of the S&P 500 Index and various fixed income Morningstar categories since the S&P 500 peak on February 19, 2025.
What it Means for Investors
Today's environment highlights the importance of portfolio diversification and the role that bonds play within it. As the S&P 500 has declined, many fixed income sectors have fulfilled their purpose by not only providing equity diversification but also delivering positive returns.
A range of sectors have beaten the S&P and Cash amid the Q1 U.S. Equity Market Drawdown (2/19/25-3/13/25)
Footnote: 2/19/25 – 3/13/25 represents the peak to trough drawdown of the S&P 500 at the time of publication.
As of 13 March 2024. SOURCE: Bloomberg, Morningstar, PIMCO. The S&P 500 Index peak is defined as the highest closing value of the index which occurred on 19 February 2025. Cash: FTSE 3-Month Treasury Bill Index; Short-Term: Morningstar Short-Term Bond Category; Long Muni: Morningstar Municipal National Long Category. Core Plus: Morningstar Intermediate Core-Plus Category; Multisector: Morningstar Multisector Bond Category; Corporate: Morningstar Corporate Bond Category
Accrued Interest Podcast
Moving Cash from Defense to Offense with Jerome Schneider
Tariffs
Trump Tariff Policies, A Historical Context
What the Chart Shows:
Over the past 50 years, the average tariff rate has remained below 5%. However, new administration policies could introduce uncertainty, potentially pushing and could potentially push the rate above 15%, which would be the highest level we’ve seen in over 80 years!
What It Means for Investors:
Tariffs, and the uncertainty around them, are likely to increase economic, geopolitical, and market volatility. With expensive equities and cash returns that may not last, we think that high-quality bonds are well-positioned to deliver attractive returns across a wide range of possible outcomes.
U.S. Effective Tariff Rate (%), All Imports
The Tariff Tug-of-War: Balancing Economic Growth and Trade Relations
Exploring the delicate balance between protectionism and global cooperation
Washington Watch
The 5 D's of Trump 2.0
How Can PIMCO Help You?
Disclosures
All investments contain risk and may lose value. Investors should consult their investment professional prior to making an investment decision.
Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed.
Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. Different types of investments involve varying degrees of risk. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. No representation is being made that any account, product, or strategy will or is likely to achieve profits, losses, or results similar to those shown.
PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the current 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. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world.
As of 13 March 2024. SOURCE: Bloomberg, Morningstar, PIMCO. The S&P 500 Index peak is defined as the highest closing value of the index which occurred on 19 February 2025. Cash: FTSE 3-Month Treasury Bill Index; Short-Term: Morningstar Short-Term Bond Category. Short-term bond portfolios invest primarily in corporate and other investment-grade U.S. fixed-income issues and have durations of one to 3.5 years (or, if duration is unavailable, average effective maturities of one to four years). These portfolios are attractive to fairly conservative investors, because they are less sensitive to interest rates than portfolios with longer durations; Long Muni: Morningstar Municipal National Long Category. Muni national long portfolios invest in bonds issued by various state and local governments to fund public projects. The income from these bonds is generally free from federal taxes. To lower risk, these portfolios spread their assets across many states and sectors. These portfolios have durations of more than six years (or average maturities of more than 12 years); Core Plus: Morningstar Intermediate Core-Plus Category. Core-plus bond funds invest primarily in investment-grade US fixed-income issues including government, corporate, and securitized debt. However, they generally have greater flexibility than core offerings to hold non-core sectors such as corporate high yield, bank loan, emerging-markets debt, and non-US currency exposures; Multisector: Morningstar Multisector Bond Category. Multisector bond portfolios seek income by diversifying their assets among several fixed-income sectors, usually U.S. government obligations, U.S. corporate bonds, foreign bonds, and high-yield U.S. debt securities. These portfolios typically hold 35% to 65% of bond assets in securities that are not rated or are rated by a major agency such as Standard & Poor's or Moody's at the level of BB (considered speculative for taxable bonds) and below; Corporate: Morningstar Corporate Bond Category. Corporate bond funds focus on investment-grade bonds issued by corporations in US dollars, which tend to have more credit risk than government or agency-backed bonds; S&P 500: S&P 500 Index.
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