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Elevated starting yields can help anchor the return outlook. Attractive bond yields across developed and emerging markets establish a baseline for fixed income beta – meaning returns driven mainly by overall market performance – while a globally diversified bond allocation may provide compelling returns for the level of risk taken.
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Economic paths are diverging across countries and sectors. Structural shifts in AI investment, energy markets, and fiscal policy are creating more persistent differentiation between winners and losers across regions and assets.
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A wider spread of outcomes creates more potential opportunities for active managers to add value. In a rupturing world, flexible strategies can pursue more opportunities for alpha – meaning returns generated through active decisions – than static, index-based approaches.
Read or listen to PIMCO's insights on global bond diversification.