portfolio manager viewpoints
may 2015
Should rates move higher, or a taper tantrum similar to 2013 develop,
bank loans have the added benefit of being a potential hedge against
that volatility.
Summary: Following a weak 2014, bank loans have seen a snapback
in performance as technicals and risk sentiment have improved.
A combination of stable fundamentals, “good enough” economic
growth, and low absolute yield levels on traditional fixed income
paint a favorable relative value picture. Given a coupon like return
profile of 5-6% with a lack of duration risk, bank loans continue to
serve as an excellent diversifier for traditional fixed income.
Pacific Asset Management
May 2015
ABOUT PACIFIC ASSET MANAGEMENT
Founded in 2007, Pacific Asset Management specializes in credit oriented fixed income strategies. Pacific Asset Management is a division of Pacific Life Fund Advisors
LLC, an SEC registered investment adviser and a wholly owned subsidiary of Pacific Life Insurance Company. As of March 31, 2015 Pacific Asset Management managed
approximately $4.8bn.
IMPORTANT NOTES AND DISCLOSURES
Bank loan, corporate securities, and high yield bonds involve risk of default on interest and principal payments or price changes due to changes in credit quality of
the borrower, among other risks.
Pacific Asset Management is an investment advisor; it provides investment advisory services to institutional clients and does not sell
securities.
This information is presented for informational purposes only. This is not to be construed as an offer to buy or sell any financial instruments and should not be relied
upon as the sole investment making decision. All material is compiled from sources believed to be reliable, but accuracy cannot be guaranteed.
The opinions expressed
herein are based on current market conditions and are subject to change without notice.
FOR MORE INFORMATION
Pacific Asset Management • 700 Newport Center Drive • Newport Beach, CA 92660 • www.pam.pacificlife.com
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