by Davide Barbuscia
The Globe and Mail
U.S. bond giant PIMCO said on Wednesday it is increasing its bond exposure in developed markets outside the United States as inflation could complicate the shift of the Federal Reserve to lower interest rates.
The $1.9 trillion asset manager expects an easing in central bank policies to bolster bonds in markets such as Australia, Canada, the United Kingdom and the euro zone, but is underweight U.S. fixed income as economic growth in America may continue to be accompanied by rising price pressures.
“The global economic and market outlook suggests diverging paths among regions and sectors,” portfolio managers Erin Browne and Emmanuel Sharef wrote in an asset allocation outlook report.
“In fixed income markets, we’re adding to our investments in select countries outside the U.S. where easier monetary policy this year is likely to boost bonds,” they said.