Symbol: MWCRX
Expense Ratio: 0.99%
800-241-4671
Co-managers Stephen Kane, Laird Landmann and Tad Rivelle (all Pimco Veterans) make the big-picture calls at Metropolitan West Unconstrained Bond but rely on their firm’s deep bench of analysts and portfolio managers (almost 70 people in all) to supply their best ideas.
They have built a portfolio designed to protect against rising interest rates. For starters, they have 26% of the fund’s assets in mortgage securities that aren’t guaranteed by U.S. government agencies and 14% in emerging-markets corporate bonds issued in local currencies (the non-agency mortgages have higher yields than agency mortgage securities, such as Ginnie Maes). In addition, the managers have sold short Treasury futures, a position that will gain in value if bond yields rise. By doing so, they’ve shortened the fund’s average duration to a superlow 1.3 years. That suggests that Unconstrained Bond would lose 1.3% if interest rates rose one percentage point. The fund yields 2.9%.
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