What core points of difference do absolute return bonds offer?

PARTNER INSIGHT: Mike Amey, managing director and portfolio manager for the PIMCO GIS Global Libor Plus Bond fund, on why a 'balanced' and active investment approach is helping to generate returns whilst maintaining a low risk profile.

Q. How does the fund differ from other absolute return bond funds? One way in which it differs is through its structural element; there will always be some fixed income securities in the portfolio as a core holding. We will not invest in pure cash as we believe there is a risk premium that can be harvested if the portfolio has exposure to the short maturity bond market. Another aspect that is very important is the explicit recognition of downside risk within the fund. A lot of absolute return bond funds will claim to be fully invested in cash when they feel the market is too risky, or...