Equity Mates Investing Podcast Boosting income in 2025 with Sam Watkins | PIMCO
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Oct 23, 2025 Sam Watkins, a fixed income portfolio specialist at PIMCO, joins to discuss the rise of income investing and the new PIMCO Short Term Active Yield ETF (EARN). He explains how enhanced cash compares to term deposits and the implications of the RBA’s stance for income seekers. Sam elaborates on why active fixed income can outperform benchmarks, and how EARN's strategy adapts institutional insights for retail investors. He also highlights the ETF's role in diversifying portfolios amid changing market conditions.
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Early ETF Launch Success Story
- Sam reported PIMCO's four ETFs launched above issue price and delivered 0.78%–1.17% absolute alpha in six months.
- He highlighted that six-month alpha annualises to roughly double, signalling strong active performance early on.
Attractive Starting Yields In Fixed Income
- Starting yields in high-quality fixed income are currently compelling at around 5–6% plus potential active alpha of 1–1.5%.
- If central banks cut rates, bond prices rise, and investors capture capital gains as yields reprice lower.
Use Short-Term Bond ETFs Instead Of Term Deposits
- Consider replacing or complementing term deposits with tradable short-term active bond ETFs offering higher yields and daily liquidity.
- EARN yields about 4.18% versus typical six-month term deposits near 2.84%, making it a practical alternative.