Fund Action: PIMCO makes PM changes on 16 funds (Chuck Self comments)

On July 24, 2018

Sudi Mariappa was promoted after Bill De Leon left the company amidst allegations of inappropriate behavior.

“If there is support for managers still in place, the process is likely to be similar, and it could be better to have new people onboard because you’ve got fresh eyes on the product…” — Chuck Self

Rheaa Rao – Fund Action

PIMCO named Sudi Mariappa global head of portfolio risk management, a post that will relieve him of portfolio manager duties on 16 funds by July 20. Mariappa, who was a managing director and portfolio manager, replaces Bill De Leon who resigned on July 20 to spend time with his family,…

The nine PIMCO RAE funds detailed in the filing include different equity and risk exposures, such as international, emerging markets and low volatility (see table). They have an aggregate of $8.2bn. The funds in the StocksPLUS suite that are undergoing manager changes invest in bonds and futures and have $10.9bn in combined assets.

“If there is support for managers still in place, the process is likely to be similar, and it could be better to have new people onboard because you’ve got fresh eyes on the product,” Chuck Self, chief investment officer at iSectors, explained.

Investors are more likely to closely watch funds with new managers if those managers came from outside the firm, as it would render past performance and risk parameters meaningless, Self argued.

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