"Pimco to Raise $600 Million for REIT to Buy Mortgage Debt..."
Although most central bankers in the developed world still maintain a low interest rate environment to support the economy recovery, they might soon reverse the process more abruptly than the market predict. When they do that, short term interest rate tend to spike up quickly. Pimco certainly anticipate such a scenario, and preparing for it by reducing the duration of their fixed income investments, in other words, they start to move from the short end of the yield curve (short terms bond investments) to the long end of the yield curve (long terms bond investment such as mortgage debt). It is a key signal for other bond investors to follow in the market place.
Maybe our sovereign wealth fund should do the same thing to hedge against the perceived interest rate risks?
About Me
- Dr. Junhua Lu
- Junhua Lu BSc, MSc (Fin), CFA, MCSE, PhD Quantitative portfolio strategist with expertise in a broad range of financial modelling and quantitative analysis techniques. Familiarity with a broad range of portfolio risk management and strategies, including portfolio optimization with higher moment, stress testing, back testing, and risk budgeting. Demonstrated ability to employ a variety of advanced econometric techniques to identify potential investment opportunities creatively. Extensive experience with such programming packages as MATLAB, C++, and VBA as well as use of such financial databases as Factset, Bloomberg, CRSP, Compustat, Lipper and Morningstar.
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