HEAD-TO-HEAD: Blackrock versus Pimco

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CONCLUSION

The Blackrock Asian Tiger Bond Fund “is a formidable Asian bond offering guided by impressive leadership, a large supporting cast, and a well-executed team-based investment approach”, said Ge.

“Seth is a top-notch Asian bond manager, and continues to be actively involved in setting macro views and the portfolio’s risk budget and remains the final decision-maker,” he said.

Ge’s confidence in co-managers Piasecki and Ganguly, who are responsible for portfolio construction and credit selection, “as money managers is growing”.

Management employs a proven team-based approach, which has been in place since Seth’s arrival in 2012, combining top-down views and bottom-up credit selection, according to Ge.

“Seth leverages Blackrock’s vast array of global fixed-income resources when formulating strategy and also has the discretion to implement an independent macro view if needed,” he said.

“The strategy has delivered admirable peer-relative returns under Seth’s leadership since 2012, and has outpaced most of its rivals,” said Ge.

The Pimco Asia Strategic Interest Bond was recently restructured into a benchmark-agnostic strategy with a higher risk appetite and an income focus.

“It continues to be helmed by one of our favourite Asian bond managers and supported by a deep cast,” said Ge.

Chang, who has been running this strategy since he joined Pimco in 2018, has 24 years of investment experience, previously serving as JPMorgan’s head of Asian fixed income, and is one of the top Asia bond managers.

He is joined by an experienced co-manager duo of Neogy, who works closely with Chang on the daily management of the portfolio, and Mittal, who sets the portfolio’s risk guardrails.

The trio are supported by a relatively stable nine-member Asia Pacific credit research team that averaged 13 years of investment experience and six years of firm tenure.

“However, we have a conservative view of the investment process given its new objectives and limited track record,” said Ge.

“We take comfort that the framework remains intact and clearly structured, but we have not seen Chang manage an income-focused portfolio previously,” he said.

The strategy has delivered solid results under Chang, but the record prior to August 2020 is less relevant now.

“Investors should be aware that the revamped mandate’s higher-than-peers exposure to junk bonds can lead to heightened volatility against peers during periods of market stress,” said Ge.

In conclusion, “the Blackrock fund has a slight edge over the Pimco fund,” he said.

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