Exploring the PIMCO Income Fund: The World's Largest Active Bond Fund
Savers have been eagerly snapping up 10-year Singapore Savings Bonds (SSBs) and short-term Treasury Bills (T-bills) over the past two years (Shyan, 2023). But what options are available when an individual reaches the S$200,000 deposit limit set on SSBs? While T-bills, without limits, remain an option, they are short-term investments. So, what may savers do as interest rates fall?
A viable alternative in a falling interest rate environment is investing in high-quality bonds (Sreenivasan, 2024). These bonds can be accessed through the PIMCO Income Fund, the world's largest active income fund (Devalla, 2024b). The PIMCO Income Fund has consistently outperformed its category, delivering an annual return of 7.5% over the past 15 years (Alpert, 2024).
Let’s watch this video by Morningstar:
Click the links below for additional sources of information:
- PIMCO GIS Income Fund Administrative SGD (Hedged) Income - Factsheet
- Kiplinger: Best Bond Funds to Buy
- PIMCO emerges as top winner with four winning funds across fixed income securities
References:
Alpert, G. (2024, June 14). There’s no bond king, but investors keep pouring money into Pimco income. Morningstar, Inc. https://www.morningstar.com/funds/theres-no-bond-king-investors-keep-pouring-money-into-pimco-income
Devalla, K. (2024, April 4). How the Largest Bond Funds Did Last Quarter. Morningstar, Inc. https://www.morningstar.com/funds/how-largest-bond-funds-did-last-quarter
Shyan, L. S. (2023, September 2). Investors still eyeing SSBs, T-bills and fixed deposits as rates yet to fall. The Straits Times. https://www.straitstimes.com/business/investors-still-eyeing-ssbs-t-bills-and-fixed-deposits-as-rates-yet-to-fall
Sreenivasan, V. (2024, February 16). Pimco says interest rates poised to fall, raising huge potential for high-quality bonds. The Straits Times. https://www.straitstimes.com/business/pimco-says-interest-rates-are-poised-to-fall-raising-huge-potential-for-high-quality-bonds
Disclaimers:
This blog is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the products mentioned. Investments in investment-linked plans (ILP) are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance is not indicative of future results. All names, logos and trademarks are used for identification purposes only and does not imply endorsement. This publication has not been reviewed by the Monetary Authority of Singapore. The information provided on this blog page is accurate as of the date of posting.
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