Morningstar

PIMCO GIS GlInGd Crdt Inv USD Inc

Analyst Report
Morningstar's Take
|09/11/2023
by Jeana Marie Doubell
Pimco GIS Global Investment Grade Credit benefits from the skill of its veteran lead manager, the support of an impressive group of corporate bond specialists, and a versatile process that draws on the firm's robust macroeconomic and fundamental research. The strategy earns High People and Above Average Process Pillar ratings.

Lead manager Mark Kiesel, Pimco’s global credit CIO, boasts three decades of experience in global credit markets and has run this strategy since 2003. He is supported by Mohit Mittal, who oversees Pimco’s U.S. investment-grade, high-yield, and emerging-markets corporate trading desks, and Jelle Brons, a corporate credit specialist who leads the group’s sustainable credit lineup. This team of managers are further supported by an impressive cadre of corporate credit portfolio managers and analysts, as well as Pimco's plethora of quants, traders, and macro researchers. The firm's corporate credit effort, characterized by both impressive fundamental analysis and top-down value discipline, remains among the elite.

The team is not afraid to stretch its investment universe, often exploring off-benchmark opportunities in high-yield debt (typically 5% to 10% of the portfolio) and local-currency emerging-markets fare (typically 1% to 5% of the portfolio). This can lead the fund to underperform when more risky, lower-quality fare sells off, as noted by the fund’s recent struggles. For example, exposure to industries hurt by the pandemic in 2020 and stakes in hard-hit Russian and Chinese credits in 2022 took a toll in those years. Over the trailing three-year period though October 2023, the institutional USD Inc share class trails two thirds of peers in the USD hedged global corporate bond Morningstar Category and its benchmark, the Bloomberg Global Aggregate Credit Index.

Nonetheless, the strategy continues to stand out as an attractive offering in its category. Under Kiesel's watch, from August 2003 through September 2023, the strategy has generated excellent long-term results (returning 4.3% annualized), beating the average return in its peer group (3.4%) and its Bloomberg Global Aggregate Credit Index (3.7%). With its key strengths intact, this remains an attractive option for exposure to the global corporate credit markets.

 
Morningstar Medalist Rating™A solid choice for global corporate bond exposure.
To find out how Morningstar rates a fund click here.
Morningstar Pillars
PeopleHigh
ParentAbove Average
ProcessAbove Average
 
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
Morningstar reserve its rights to charge for access to these Ratings and/or Rating report.
Permissions/Reprints   E-mail Morningstar     
In order to provide consistency across the report data provided by different Asset Managers, the calculated data points presented are generated using Morningstar’s proprietary calculation methodology which is set out in more detail at(https://www.morningstar.com/research/signature)
© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookie Settings        Disclosures

The Morningstar Star Rating for Stocks is assigned based on an analyst's estimate of a stocks fair value. It is projection/opinion and not a statement of fact. Morningstar assigns star ratings based on an analyst’s estimate of a stock's fair value. Four components drive the Star Rating: (1) our assessment of the firm’s economic moat, (2) our estimate of the stock’s fair value, (3) our uncertainty around that fair value estimate and (4) the current market price. This process culminates in a single-point star rating that is updated daily. A 5-star represents a belief that the stock is a good value at its current price; a 1-star stock isn't. If our base-case assumptions are true the market price will converge on our fair value estimate over time, generally within three years. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Morningstar Star Rating for Stocks, please visit here

Quantitative Fair Value Estimate represents Morningstar’s estimate of the per share dollar amount that a company’s equity is worth today. The Quantitative Fair Value Estimate is based on a statistical model derived from the Fair Value Estimate Morningstar’s equity analysts assign to companies which includes a financial forecast of the company. The Quantitative Fair Value Estimate is calculated daily. It is a projection/opinion and not a statement of fact. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Quantiative Fair Value Estimate, please visit here

The Morningstar Medalist Rating is the summary expression of Morningstar’s forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar’s conviction in those products’ investment merits and determines the Medalist Rating they’re assigned. Pillar ratings take the form of Low, Below Average, Average, Above Average, and High. Pillars may be evaluated via an analyst’s qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. Vehicles are sorted by their expected performance into rating groups defined by their Morningstar Category and their active or passive status. When analysts directly cover a vehicle, they assign the three pillar ratings based on their qualitative assessment, subject to the oversight of the Analyst Rating Committee, and monitor and reevaluate them at least every 14 months. When the vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. For more detailed information about these ratings, including their methodology, please go to here

The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) are not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involve the risk that the return target will not be met due to such things as unforeseen changes in changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rates, exchange rate changes, and/or changes in political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate.

For information on the historical Morningstar Medalist Rating for any managed investment Morningstar covers, please contact your local Morningstar office.

For more detailed information about conflicts of interest, including EU MAR disclosures, please see the “Morningstar Medalist Rating Analyst Conflict of Interest & Other Disclosures for EMEA”here

Select Your Site Edition To make sure the site is relevant to you, we need to know if you’re an individual investor or a financial professional.