Five Reasons to Choose PIMCO for Tax-Efficient SMAs
Text on screen: PIMCO
Text on screen: John Hornbeak, ACCOUNT MANAGER
Hornbeak: Hello, my name is John Hornbeak, an Account Manager at PIMCO on our Separately Managed Accounts Team. Joining me is Dave Hammer, PIMCO’s Head of Municipal Bond Management.
Today, we want to share our ongoing commitment to our SMA franchise, which supports financial advisors like you who serve some of the most sophisticated clients in wealth management industry.
We’ll cover five key reasons why we believe PIMCO stands out as the premier provider of tax-efficient SMA solutions.
Text on screen: TITLE – Why we believe PIMCO stands out for tax-efficient SMA solutions: BULLETS – Service, Size, People, Performance, Market Opportunities
First service, second size, third people, fourth performance, and fifth market opportunities.
Please Feel free to click on the icons in the top left corner of the screen to jump to the section that interests you most, or you can watch the entire video.
Thank you for choosing PIMCO to manage your clients’ capital. We’re proud, and privileged, to deliver the best in bond management solutions to you and your clients. To learn more, please reach out to your PIMCO Account Manager today.
At PIMCO, our top priority is servicing our clients. When you open an SMA with us,
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you gain full access to our dedicated SMA client service team. They’re here to assist you with all aspects of your clients’ needs – from account opening, to account linking, to portfolio updates, to personalized, user-friendly reporting.
Text on screen: David Hammer, PORTFOLIO MANAGER
Hammer: That’s right. Since our acquisition in 2019, we’ve been able to bring on many seasoned professionals, including you, John, which has really strengthened our ability to serve clients. As the Portfolio Manager, my responsibility is delivering top-tier performance. But it’s equally important that SMA client experience is second-to-none.
Hornbeak: I’d like to add that PIMCO has made, and continues to make, significant investments in technology and platforms to elevate our client experience.
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For example, with our new PIMCO Pro portal, clients can open an account with just a few simple clicks. While Technology is critical to our business, we also recognize that many clients appreciate a personal touch, like a phone call to discuss market trends and opportunities in their account. In this business, it’s all about combining technology and personal interaction to provide the elevated level of service that SMA clients expect.
Hammer: One of the most common questions I hear from clients is: ‘Is PIMCO too big? Can you really be nimble enough to seek – and secure – the best deals in the muni market?’ To that I say: Being large is actually a significant advantage.
Images on screen: PIMCO trade floor
When you hire PIMCO, you’re partnering with one of the largest fixed income institutions in the world. This allows us to buy institutional-sized lots, pass on the savings, and secure the most beneficial terms to our clients.
Another advantage we have is scale. We’ve taken systems that were originally designed and refined for other asset classes to create proprietary technology specifically for tax-exempt muni market. This has greatly improved the efficiency of our muni bond trading capabilities. PIMCO also recently formed a strategic collaboration with a financial technology platform to integrate real-time data as well as liquidity, furthering our commitment to technological innovation in this space.
Hornbeak: That’s right. PIMCO isn’t only a Muni bond specialist.
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Our clients benefit from the full force of the firm. We have over 270* portfolio managers, who average 17 years of industry experience. Our expertise spans various areas, including rates and treasuries, mortgages, corporates, real estate, and private investments, and everything in between.
Collaboration among our desks adds tremendous value and I’ve seen this value first hand.
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One of my examples is our approach to treasury ladders. We don’t simply buy them for coupon income. We actually call up and leverage our Rates Desk, we can look at all outstanding CUSIPs within a particular maturity spectrum. This allows us to optimize for yield-to-maturity and analyze pricing relative value across all the CUSIPs.
Another great example of how we go above and beyond to deliver value to our clients: PIMCO is AMONG the largest mortgage-backed securities traders in the world.
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Leveraging our proprietary technology in this space, we are able to extrapolate economic and mortgage-related data at the zip code level, which in turn gives us a signal on whether a muni bond is potentially mispriced.
Hammer: At PIMCO, our greatest strength is our people.
Images on screen: PIMCO trade floor
In the previous section, we talked about how our portfolio managers can collaborate broadly across different desks. But we also have the ability to go very deep in specific areas. I’m supported by more than 30 portfolio managers and credit analysts* who spend their days meticulously surveying outstanding debt issuances in the muni market and assigning proprietary, independent credit ratings.
Hornbeak: What’s great about that is that you and the muni team can express your investment views across different strategies and vehicles. This flexibility allows our clients to pick and choose the options that best fit their investment objectives – whether it’s a Mutual Fund, an SMA, an ETF, an Interval Fund, or other alternative investment vehicles.
Hammer: A key example of this is the similar types of housing risk that can be found across our complex. My team and I can leverage desks focused on mortgages, private credit, real estate and other asset classes to better establish relative value. And often time identify and source non-traditional high quality tax exempt debt, that simply isn’t available through the public muni market.
Hornbeak: I’ll conclude by echoing what you mentioned earlier about people being PIMCO’s greatest strength. Our clients may view me as their go-to contact for their muni SMAs. But I’m backed by all the talented investment professionals Dave mentioned,
Images on screen: PIMCO’s San Diego office building
along with over 70 employees* at PIMCO’s San Diego office. We all work in our brand-new, state-of-the-art facility that’s dedicated exclusively to our SMA business.
Hammer: PIMCO offers a full suite of well-performing muni strategies with long tenured track records. We believe this gives investors confidence in partnering with us in the tax-exempt space.
Hornbeak: And we’re incredibly proud of that, but what I love most is our ability to take our industry-leading solutions and personalize them to each client’s unique circumstances,
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whether it’s their income tax bracket, state preferences , or year-round tax-loss harvesting needs . We consider all these factors when constructing a bespoke SMA solution, which ultimately leads to better outcomes for our clients.
Hammer: So why consider munis now? Three key reasons stand out:
Text on screen: TITLE – Why consider munis now: BULLETS – Elevated starting yields, Strong credit fundamentals
1.Elevated starting yields. The yield-to-worst on the Bloomberg Muni Bond Index is currently in the top decile relative to the past decade, making it an attractive entry point.
2.Strong credit fundamentals. Muni Issuers are benefiting from stable revenues and elevated reserves that are near all time highs, which enhances the overall credit quality of the market.
3.Attractive forward-looking returns relative to other asset classes. PIMCO’s Capital Market Assumptions forecast that Investment Grade and High-Yield municipals will be among the highest-returning public market asset classes over the next five years.
It’s also important to recognize how much the muni market has evolved in recent decades. Today, it comprises over 50,000 issuers, ranging from household names and entities that many people know to those that are unrecognizable to most investors. Competing at the forefront of muni investing requires a true global leader in fixed income. And I believe that PIMCO has what it takes to meet the demands of today’s market for the fast-changing landscape ahead.
Hornbeak: At PIMCO we are also innovating and improving things all the time. One innovation that PIMCO is excited to deliver is SMA sleeving. This feature will enable RIAs to open multiple strategies with different fees in a single account. It will also allow us to offer overlay services and develop new ‘completion’ solutions tailored to client needs. So whether a client chooses a Mutual Fund, an ETF, Models, Alts – or all of the above – we will be able to deliver that in a single SMA account, complete with a single consolidated report. Additionally we have improved our tax loss Harvesting. In the past we would sell the bonds and re invest over the next couple weeks, putting investors at a slight bit of market risk. But now we can identify the bonds with our technology and PM’s and buy the bond first, and on the same day sell the bond we wanted to so clients are not taking that risk. These are great improvements on our platform and this is part of the reason why PIMCO is the best in class provider for solutions in the bond management space.
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Disclosure
Past performance is not a guarantee or a reliable indicator of future results.
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. Income from municipal bonds is exempt from federal income tax and may be subject to state and local taxes and at times the alternative minimum tax; a strategy concentrating in a single or limited number of states is subject to greater risk of adverse economic conditions and regulatory changes.
Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. 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 for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.
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. 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. Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626.] ©2025], PIMCO
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