From Yahoo Finance: 2025-06-05 08:00:00

Active bond fund managers are finding value in securitized credit despite its popularity. Portfolio manager David Braun of PIMCO Active Bond ETF (BOND) believes the sector is big and valuable enough to overweight. BOND aims to beat the Bloomberg US Aggregate Bond index with a focus on monthly income, differentiating it from other Pimco funds.

Securitized credit makes up 60.7% of BOND, with agency mortgages like those from Fannie Mae and Freddie Mac being the largest allocation. Braun notes that agency mortgages offer higher nominal yields compared to investment grade corporate bonds, are higher quality, more liquid, and offer better spreads.

BOND also has overweight positions in non-agency mortgages, AAA-tranche of collateralized loan obligations, and consumer asset-backed mortgages. Braun sees agency debt and CMBS as more attractive than investment-grade corporate bonds given the uncertain economic backdrop. The portfolio is positioned for resilience in the face of high interest-rate volatility.

BOND’s allocation to corporate bonds and corporate spread duration is at its lowest since 2017, with a focus on systemically important financials. The portfolio is slightly overweight in duration at 6.45 years compared to the Aggregate bond index, with Braun seeing attractive rates and a healthy yield curve steepening benefiting bond investors.



Read more at Yahoo Finance: PIMCO Bond Manager Says Securitized Credit Remains Appealing