Japan Core Plus strategy
In recent history, Japanese bond yields have remained low and corporate bond spreads narrow, making it difficult to attain sufficient added value from Japanese bonds alone. However, there are many opportunities for added returns if the investment universe is expanded to include foreign bonds. PIMCO’s Japan Core Plus Strategy employs an active approach seeking alpha, or excess returns above the benchmark, from bonds both within the Japanese benchmark (“core”) and outside the benchmark, including foreign bonds (“plus”). Risk is maintained at a level similar to that of a benchmark such as NOMURA-BPI Aggregate, but the portfolio pursues stable high returns that would otherwise be difficult if invested solely in Japanese bonds. This strategy can provide the building block for portfolios where Japanese bonds are positioned as the core asset.