PIMCO Foreign Bond (Unhedged) DPFBDX

Morningstar Rating

Fund Research and Analysis

by Arijit Dutta

Management's best laid plans went awry last year, but PIMCO Foreign Bond (Unhedged) is back in contention.

This Analyst Pick's 5% loss in 2008 was among the more disappointing results in the world-bond category. The portfolio's overall quality bias Read more

Kudos

Comes from a strong family: PIMCO is one of the best bond shops around.

Willingness to set its own course increases its chances of posting superior results.

Seasoned manager with exceptional resources at his disposal.

Reasonable expenses. Read more

Risks

The fund's complex strategy, which makes extensive use of derivatives, is difficult to execute well and comes with real risks.

While the fund's fully unhedged currency exposure bolsters its diversification value, it also increases volatility. Read more

Strategy

Management invests the bulk of its assets overseas, primarily in government-issued bonds. It doesn't hedge its currency exposure back into the dollar, which means that the fund offers a lot of currency Read more

Management

Scott Mather has replaced Sudi Mariappa in leading PIMCO's global portfolio-management team. Mariappa had come to PIMCO in 2000 from Merrill Lynch but retired from PIMCO in early 2008. Mather, who joined the firm in 1998, also now manages Analyst Pick Read more

Inside Scoop

This fund is the unhedged version of PIMCO Foreign Bond (U.S. Dollar-Hedged). It offers investors more diversification than its sibling and a lot of foreign-currency exposure. Read more

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