PIMCO Monthly Income Fund
Dan Ivascyn, Alfred Murata, and Joshua Anderson work to generate competitive returns and consistent monthly payouts, which they revisit each year and adjust when appropriate. Ivascyn is Pimco’s CIO; he and Murata are past Morningstar Managers of the Year. They draw on an army of managers and analysts in groups covering virtually every corner of the bond market, as well as the guidance of Pimco’s investment committee and input from macroeconomic specialists. That kind of description can come across as hype for some firms, but this one has a history of making great use of those resources.
That has been especially true here. The institutional shares of the strategy’s US mutual fund posted a 6.8% annualized return through March 2025 since Ivascyn began managing the fund at its April 2007 inception. That placed it at the top of its (distinct) rivals in the multisector bond Morningstar Category, with a history of lower volatility on average.
Although they remain a cornerstone allocation, the strategy’s nonagency mortgage exposure came down to 25% at the end of March 2025, from a recent high of 33% in February 2023. The team had gorged on beaten-down housing bonds after the financial crisis, and their fat subsequent returns—aided by a long trend of improving sector fundamentals—helped fuel the strategy for years. Outstanding supply of those legacy, precrisis bonds has shrunk dramatically, though, and in recent years the team has snapped up large chunks of older mortgages from banks and ventured more broadly into newer nonagency structures.
The strategy has squeezed out returns from other sources, though, including meaningful contributions over the years from other nonagency securitized sectors, corporates, emerging markets, currency, and sensitivity to government debt markets. That, and the team’s proven ability to capitalize on Pimco’s resources, bode well for the strategy’s future, even as it relies much less on its legacy mortgage positions. Pimco is confident that its broad and deep reservoir of choices across global markets neutralizes the impact of the strategy’s growth. But it’s still an issue worth monitoring as it has ballooned to more than USD 310 billion across vehicles as of March 2025, a more than 30% increase since the end of 2023.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
