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Fund management: Pimco reassesses emerging markets approach

The world’s biggest EM portfolio fund manager is scaling back its tactical allocation to the asset class.

Michael Gomez, Pimco “As emerging markets have matured, it is much more of a credit asset class”
Michael Gomez, Pimco

Michael Gomez, co-head of emerging markets at Pimco in California, has run more emerging-market debt than anybody else in history – and that includes his predecessor, Mohamed El-Erian. But Gomez doesn’t have El-Erian’s predilection for making his presence felt: as he approaches the first anniversary of the announcement of El-Erian’s departure to run the Harvard endowment fund, he’s still considered something of an unknown quantity by much of the emerging markets universe. Gomez runs Pimco’s $21 billion stock of dollar-denominated debt, as well as its $8 billion local-currency portfolio; his partner Curtis Mewbourne is in charge of the diversified income strategy, which splits allocations roughly three ways between investment-grade credit, high-yield credit and emerging markets. The split puts Gomez squarely in charge of the big asset-allocation decisions in emerging markets: the decisions – like that of El-Erian to go heavily overweight Brazil both before and after its presidential election in 2002 – that can make or break an emerging-market strategy.

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