Interactive Investor

ii ACE 40 investments:
PIMCO GIS Global Bond ESG Fund

ii Ace 40
Asset GroupAsset Sub-GroupInvestment Category
Fixed IncomeGlobal bondsCore

Why we recommend it

Andrew Balls has led this sustainability-focused variant of Pimco’s Global Bond strategy since it launched in early 2017, and its sister strategy since 2014. Balls joined PIMCO in 2006 and has a good deal of experience running global and European bond mandates. He is directly supported by Lorenzo Pagani who heads the European government bond and rates team and Sachin Gupta a credit and interest rate derivatives specialist. They are backed by significant analytical resources available to them at PIMCO including PMs, credit analysts and ESG specialists.   

The fund seeks to outperform the Bloomberg Barclays Global Aggregate benchmark using an approach that allows for considerable flexibility. PIMCO’s top-down views guide the fund’s decisions and within the scope of these themes the managers will consider relative valuations to determine sector, country and yield curve positioning. In terms of duration, country, and sector bets, the risks taken in this strategy are similar to those of its non-ESG Global Bond sibling. The credit sleeve is where more differences are visible; much more is held in green and sustainable development goal linked bonds here, while heavily carbon-intensive industries are avoided. The firm’s ESG credit overlay also favours green bonds, issuers with smaller carbon footprints, and those that score well on a handful of other ESG metrics.  

Historically the strategy portfolio’s interest-rate duration has generally stayed within a two year band of the index’s duration and has held up to half of its assets in corporate bonds, and up to a third in emerging-markets debt; but it can also invest up to 10% in below-investment-grade bonds.

The fund benefits from the managers’ significant experience, the stability of the key contributors, and broad support from across Pimco’s organization. Pimco GIS ESG Global Bond has built a solid record since its 2017 inception, broadly mirroring the performance pattern of its more-established, non-ESG sibling.

The fund is a superior choice for implementing environmental, social, and governance principles into a globally diversified bond portfolio.

Experienced investment manager: PIMCO is one of the world’s leading fixed income investment managers. The fund is managed by a team led by Andrew Balls, Managing Director and Chief Investment Officer of Global Fixed Income at PIMCO.

Core global bond strategy with a positive environmental and social impact: The fund is a diverse, actively managed portfolio of global fixed-income securities, selected according to PIMCO’s internal ESG screening process. It seeks to maximise total return, consistent with preservation of capital and prudent investment management and is benchmarked against the Bloomberg Barclays Global Aggregate (GBP Hedged) index.

Currency-neutral: Because foreign currency exposure is neutralised by hedging, there is no risk from adverse currency exchange movements for sterling-based investors.

The fund is competitively priced: The ‘GBP Hedged’ accumulation share class levies annual ongoing charges of 0.52%.

Ethical criteria

ii ACE sustainable style: Considers. This means the fund carefully considers an, often wide, range of ethical and/ or environmental, social and governance (ESG) issues or themes when balancing positive and negative factors.

Fund EcoMarket category: ESG Plus. This relates to funds that have a strong ESG strategy plus SRI/ethical/stewardship-related activity.

Information and data compiled March 2023.

Risk warnings

The information we provide in the ACE 40 investments list does not constitute a "personal recommendation". You should ensure that any investment decisions you make are suitable for your personal circumstances and that the ethical style of the investment reflects your personal beliefs.

Past performance of the underlying constituents is not a guarantee of future performance. Remember, the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest.

Annual performance can be found on the factsheet of each fund, trust or ETF. Simply click on the asset’s name and then the performance tab.

If you are unsure about the suitability of a particular investment or think that you need a personal recommendation, you should speak to a suitably qualified financial advisor.

Any changes to the ii ACE 40 investments list and the rationale behind those decisions will be communicated through the Quarterly Investment Review.

Details of all recommendations issued by ii during the previous 12 month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies mentioned in the ii ACE 40 investments list, which could create a conflict of interest. Any member of staff intending to complete some research about any financial instrument in which they have an interest are required to disclose such interest to ii. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of this ii ACE 40 list are subject to a personal account dealing restriction. This prevents them from placing a transaction in the specified instrument(s) for five working days before and after an investment is included or amended and made public within the list. This is to avoid personal interests conflicting with the interests of the recipients of this ii ACE 40 investments list.