Pimco Steals AIGâ€™s Bond Fund Insurance Playbook
July 14, 2014 by Leave a Comment
Pimco is putting all their chips on the table, betting that low interest rates, along with lower and more stable global growth, will last for the next 3 to 5 years; an economic condition it is referring to as the "new neutral". In fact, the company is so convinced of this "sure thing", it's placing a straight bet--selling insurance against price fluctuations on their $230bn flagship bond fund Pimco Total Return. That means it is offering investors price stability in the bond portfolio, in return for a premium.