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Equity Mates Investing Podcast

3 more rate cuts in 2025? - Sam Watkins | PIMCO

Apr 3, 2025
Sam Watkins, Managing Director and Head of PIMCO Australia and New Zealand, shares insights into the evolving fixed income landscape. He discusses PIMCO's expectation of three rate cuts in 2025 and the significance of this for investors. The conversation delves into the active versus passive debate in fixed income, explaining how new Active ETFs can enhance accessibility for retail investors. Watkins emphasizes why now is critical for fixed income investments and the unique strategies behind PIMCO's latest fund offerings.
28:39

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Podcast summary created with Snipd AI

Quick takeaways

  • Fixed income investments are increasingly crucial for retail investors as yields rise, effectively stabilizing portfolios during market volatility.
  • The recent launch of active ETFs by PIMCO enhances access to fixed income markets, allowing everyday investors to engage with previously institutional-only funds.

Deep dives

The Importance of Fixed Income in Investment Portfolios

Fixed income investments play a crucial role in stabilizing portfolios, yet many retail investors underrepresent them due to previous low-interest rates and accessibility challenges. In recent times, the landscape has shifted, offering more attractive yields around 6% to 7%, appealing given the current economic uncertainty. Institutional portfolios typically allocate about 40% to fixed income, contrasting with retail investors who may allocate significantly less. As interest rates rise, fixed income can provide a defensive characteristic against market volatility, making it a favorable option for diversifying investment strategies.

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