Pimco Direct Clients Outside US Toward Chinese Offshore Bonds for Diversification
According to the South China Morning Post, Pimco, a US-based asset manager, has been advising clients, especially those outside the United States, to consider Chinese offshore bonds as a method to diversify portfolios away from high exposure to US dollar and equity assets.
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Christian Stracke, president of the US asset manager Pimco, stated that global investors are increasingly looking toward China as an alternative to saturated US asset markets, noting that Pimco views Chinese bonds as one of the safest ways to diversify portfolios following a 180-degree shift in sentiment regarding the world's second-largest economy, as reported by the South China Morning Post.
Stracke indicated that Pimco has been directing its clients, particularly those located outside the United States, toward Chinese offshore bonds, as the firm aims to reduce concentrations in US dollar and equity assets, according to the South China Morning Post. Pimco oversees more than US$2 trillion in assets by the end of June. This guidance is intended to help reduce concentrations in US dollar and equity assets, a situation that has arisen after the American market has experienced substantial gains over several years.
During an interview with the South China Morning Post in Hong Kong on Monday, Stracke mentioned that Pimco receives numerous inquiries from clients, especially those not based in the US, regarding alternative ways to diversify away from US concentrations. In response, the firm has discussed China, specifically Chinese offshore bonds, as one such option.
Stracke further explained that the impetus for this shift is not always rooted in concerns about the US, but rather in the fact that portfolios have become heavily exposed to US equities and the US dollar due to the strong performance of the US market.
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