Emmanuel “Manny” Roman, CEO of the $1.7 trillion Pimco Funds, is unapologetic for focusing on fixed income, and fixed income only.
“We do fixed income at a fair price, and we do it well,” he told an audience at the Morningstar conference in Chicago. “It’s a unique strategy that focuses on one side of the market.”
Nor does he think focusing on fixed income puts Pimco at a disadvantage — and he has no plans to expand into other markets.
“It doesn’t matter how much we manage,” he said. “All that matters is our long-term performance. [Even] in the last quarter of 2018, all our funds were up.”
He added that “one of the things you need to decide is what business you want to be in.” For example, Vanguard focuses on bringing indexes that are inexpensive to the public. “That’s a business model. At the other extreme is us … where we do everything from the mortgage world to the fixed income world to the muni world to the private credit world. And we do one thing well. We’re never going to be the biggest, but we do very well for clients, and that’s perfectly fine for us.”
He added that he thought people got into trouble when they “try to do a lot of different things. It has consequences. If you try to do too many things, you’ll always do one badly. You’ll always have risk you haven’t carefully thought about … and cost structure that explodes when you don’t invest in the right place.”
Pimco, which for the past 47 years has been at the top of its game in fixed income, and weathered the storm of former manager Bill Gross’ rocky exit, isn’t just sitting back on their laurels either.