Recent losses, however, have been caused by positions in mortgage-backed securities and emerging-market currencies, according to Reid. But Pimco sees a growing opportunity in such currencies after prices fell in August, Kiesel said in a Sept. 18 Bloomberg Television interview.
“We want to start to dip our toe into emerging markets, recognizing the valuations are quite compelling,” Kiesel said. “We actually think within all emerging markets, FX is probably the cheapest” as the market that has corrected the most, he said.
Total Return’s duration, a measure of sensitivity to rising rates, was 4.43 years at the end of August, compared with 6 years for the benchmark, which helped its performance since rates began rising in July 2016, according to Reid. But as rates climbed further in September, Total Return’s losses widened.
Yet investors pining for Gross may want to avoid his Janus Henderson Global Unconstrained Bond Fund. The $1.15 billion go-anywhere fund is down 6 percent this year through September.
This article was provided by Bloomberg News.