PIMCO & Guggenheim Talk Fixed Income Opportunities for 2027

Given just how much macroeconomic conditions have been shifting in recent months, how should advisors and investors be approaching yield opportunities in the coming days?Key Takeaways: PIMCO’s Brian Leach and Guggenheim’s Steven Brown, CFA, joined a VettaFi symposium to discuss their fixed income outlooks for 2027. Both experts shared insight on how the market may play out next year and opportunities in fixed income. The symposium highlighted actively managed funds within the PIMCO and Guggenheim libraries. These include the PIMCO Active Bond Exchange-Traded Fund (BOND) and the Guggenheim Ultra Short Income ETF (GCSH). This crucial topic was discussed at length during VettaFi’s recent 2027 Market Outlook Symposium. Steven H. Brown, CFA, chief investment officer at Guggenheim Investments, and Brian Leach, executive vice president and credit strategist at PIMCO, joined VettaFi’s Roxanna Islam, CFA, CAIE, head of sector & industry research, to discuss trends to watch, compelling income opportunities, and more.Trends to WatchTo get things started, Islam asked both Brown and Leach what big economic trends they’ll be watching for in 2027. Leach said that he and his team are closely watching the gap between a base-case market environment and a more negative scenario. He elaborated that while inflation is still relatively high, the market is currently seeing a strong backdrop of growth heading into the new year. However, Brown noted that this growth is largely driven by AI and CapEx spending, which may create an asymmetrical market. “That gap between what’s priced in the market now and what could occur next year if some of these current trends reverse or destabilize is the one that gives us a little bit of pause as we think about 2027,” Brown said. See More: GCSH Hits $300 Mil in AUM Amid Short Duration Bond DemandExpectations for GrowthLeach said his team’s base case is that growth slows but stays above trend. He pointed out how AI becoming a core growth engine has created risks for both the equity and fixed income markets. When looking at inflation, Leach explained that key contributors have been price level resets from tariffs, or supply/demand dynamics from the AI industry. He assessed that these two contributing factors are in a good position to subside in the coming months. “We think that the Fed had to reinsert some credibility, if you will, into what they’re saying in their policy and acknowledging even with new leadership that they needed to tighten policy incrementally, but the Fed’s probably not going to drive returns much next year.” Leach said. “We’re in this wider range of yields. So in a base case, you’re in a good position to clip your coupon.”Key Yield OpportunitiesFor portfolio construction, Islam asked Brown and Leach where they see the best opportunities for yield. Leach explained that there are a few different ways investors can find compelling income. See More: Blend Market Upside & Defensive Yield With Equity Income Within PIMCO’s lineup, Leach highlighted a few funds that offer strong track records for this environment. The PIMCO Active Bond Exchange-Traded Fund (BOND B) can operate as an actively managed vehicle for seeking maximized total return, whereas the PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT A+) provides active access to ultra-short bonds. Leach also showcased the PIMCO Multisector Bond Active Exchange-Traded Fund (PYLD ) as a way for investors to step out into different credit and spread exposures in exchange for potentially higher yield. Naturally, Brown also showcased a few standout actively managed funds inside Guggenheim’s ETF lineup. The Guggenheim Ultra Short Income ETF (GCSH) is Guggenheim’s take on actively managed short-duration bonds, while the Guggenheim Securitized Income ETF (GISC) focuses on securitized debt. Brown also showcased the Guggenheim Investment Grade CLO ETF (GCLO), which leverages the ETF wrapper to provide exposure to the increasingly popular CLO universe. Of course, Brown and Leach discussed far more topics with Islam during the symposium, including the advantages of active management, their interest rate outlooks, and more. To register for the symposium replay, click here. For more news, information, and analysis, visit the Fixed Income Content Hub.