Pimco Managers Plan to Dial Back on Risk
NEW YORK--Reflecting its growing concerns about the global economic outlook, Pacific Investment Management Co., which runs the world's biggest bond fund, is dialing back exposure to riskier assets and moving to relatively high-quality investments.</br></br>In the company's latest quarterly outlook, Saumil Parikh, a senior portfolio manager at Pimco and a member of the company's Investment Committee, said Pimco has been focused on cutting exposure to bonds sold by financial institutions in Europe, staying underweight in stocks in developed markets and reducing exposure to the foreign-exchange markets that have been whacked by heightened volatility this month.</br></br>A main strategy over the next six to 12 months is to favor high-quality assets. Mr. Parikh said the company favors strong emerging-market debt, both corporates and sovereigns, as well as U.S. municipal bonds and U.S. agency and nonagency mortgages.</br></br>"Given our outlook for slow growth globally and recession in Europe, we are focusing on protecting portfolios against downside risk," Mr. Parikh said.</br></br>Pimco investment professionals from around the world gather every quarter in Newport Beach, Calif., at the firm's headquarters to discuss the outlook for the global economy and financial markets. A copy of Mr. Parikh's comments was reviewed by Dow Jones Newswires.