NEW YORK (Reuters) - Bond firm Pacific Investment Management Co added longer-term U.S. Treasury securities to its portfolio this week and also sold some investments tied to volatility against the backdrop of stable economic growth and a slow-moving Federal Reserve, Dan Ivascyn, group chief investment officer, said on Friday.
“We felt recent bearish sentiment was a bit too extreme” in the bond market as reflected in the jump in yields, Ivascyn said in a telephone interview. Ivascyn said moderate growth, low inflation, a cautious U.S. central bank, limited policy traction in Washington and continued global central bank accommodation “will support lower, range-bound rates.”
Ivascyn added that the email controversy involving the son of U.S. President Donald Trump “is one of many distractions that will make it a bit more difficult to pass meaningful legislation impacting the economy.”
Ivascyn’s views and opinions are widely followed as he helps oversee one of the largest asset management firms in the world.
On Thursday, Pimco said it oversaw $1.61 trillion as of June 30, up from $1.51 trillion in the previous quarter and $1.47 trillion at the end of last year. The company, which is a unit of Germany’s Allianz SE, did not disclose how much of the second-quarter rise in assets was attributable to new client money moving in, and which portion came from the performance of the funds it manages.
The rebound in assets over the past year-and-a-half has been driven by Ivascyn’s Pimco Income Fund and a corporate bond fund managed by Mark Kiesel, chief investment officer for global credit.
The Income Fund earlier this year surpassed the size of Pimco’s Total Return Fund and managed $88.8 billion at the end of June, having more than doubled in size since the end of 2014. The Pimco Investment Grade Corporate Bond Fund managed by Kiesel now holds assets of $10.8 billion, having roughly doubled from mid-2014.
Pimco’s flagship Total Return Fund, once the world’s largest bond fund at a peak of $292.9 billion in assets under management in April 2013, has shrunk to $73.3 billion at the end of the second quarter. Ivascyn declined to comment on the fund.
Reporting by Jennifer Ablan; Editing by Lisa Shumaker