Tim Wong: PIMCO Global Credit capitalises on its sizable and highly capable credit research team very effectively. We regard long-time portfolio manager Rob Mead highly, while backup manager, Mark Kiesel, has been highly influential in harnessing and applying the team's global credit research views. These key decision makers have been involved for many years and delivered excellent long-term returns. Mead and Kiesel have profited from both opportunistic and defensive calls at different points in the cycle, while ensuring that the best analyst calls form the bedrock of this portfolio.

To start with, analysts examine securities in a highly rigorous fashion. The firm's large credit research team facilitates its rigorous approach. Analysis of security-specific and industry-related issues is the principal step in building this portfolio. While analysis of macroeconomic issues is less influential, PIMCO is nonetheless among the leaders in formulating these views. As a result, it's the firm's rigorous approach at multiple levels that gives us confidence in the repeatability of this process.

PIMCO Global Credit benchmarks itself against the Barclays Global Aggregate ex-Treasury Index and its duration will typically stay within the narrow range about this benchmark. Its duration has typically been about 4.5 to 5 over the years. By contrast, the duration of many competing credit strategies is typically close to zero as they often use a cash or cash-like benchmark.

As a result, PIMCO Global Credit will be influenced by moves in both credit spreads and risk-free interest rates, whereas many other competing credit strategies will be almost wholly influenced by moves in credit spreads. So, in a period when risk-free interest rates are rising, PIMCO Global Credit may trail many of its competitors and vice versa when interest rates are falling. That said, risk-free interest rates and credit spreads do tend to be negatively correlated which can help the smooth PIMCO Global Credit's returns compared to other credit strategies that don't have any interest rate duration.

We believe that credit strategies such as this are best used in a supplementary role in a broader portfolio.