PIMCO GIS DIVERSIFIED INCOME INST GBP HGD

Investment Process

A relatively flexible bond mandate that offers global credit market exposure to investment grade corporate credit, high yield corporate credit and hard currency sovereign emerging market bonds and incorporates a diversified approach to macro economic views on credit trends, interest rates, duration, currencies and curve positioning. The fund is managed within limits relative to a reference benchmark. This is an equally weighted blend of three indices: Barclays Global Aggregate Credit Component USD Hdgd, BofA Merrill Lynch Global High Yield BB-B Rated Constrained USD Hdgd, JPMorgan EMBI Global (a hard currency EM Sovereign bond index). Duration exposure will generally be managed to within +/- 2 yrs of the index level (currently about 5.5yrs). The maximum exposure to securities with a credit rating of < B is 10%. There are no limits on emerging market exposure. The fund may hold also up to 20% in unhedged (to USD) currency exposure, although in practice unhedged currency exposure tends to be minimal. Derivative instruments may be used to manage interest rate and credit risk.