Over the 12 months to February 2026, the US dollar weakened by 12.6 percent against the euro, a move mirrored across several emerging-markets currencies, including the Brazilian real, South African rand, Mexican peso and Malaysian ringgit. This currency shift has pushed managers in the Morningstar Global Bond – Diversified category toward local-currency emerging-markets debt to capture both rate differentials and currency appreciation.
Outright currency positions have also been used more actively as relative-value opportunities have broadened. Euro-hedged share classes remain a practical route for euro-based investors to neutralize unwanted exposure to the US dollar while still accessing global opportunities. Within this category, Blackrock and Pimco offer analyst-rated strategies that approach these dynamics through distinct investment frameworks.
People
Both strategies are anchored by seasoned leadership, but their teams differ meaningfully in structure and tenure.
Pimco GIS Global Bond carries a High People Pillar rating. Lead manager Andrew Balls (CIO of global fixed-income) and comanagers Sachin Gupta, and Lorenzo Pagani have been present here since 2014. Their backgrounds span global and European mandates and are reinforced by Pimco’s substantial bench of more than 80 credit analysts and additional specialist teams across global bonds, currencies, and structured credit. This depth has remained largely stable, and the managers’ collaborative decision-making has benefited investors.
Blackrock World Bond also earns a High People Pillar rating, albeit with a somewhat more dynamic team history. Lead manager and CIO of global fixed-income Rick Rieder has steered the strategy since 2018, supported by Aidan Doyle (since 2017) and Russell Brownback (since 2020), both experienced in portfolio construction and macro positioning. The addition of Dylan Price in 2024 followed previous comanager Trevor Slaven’s departure, but the broader resources of Blackrock’s global fixed-income platform mitigate key-person risk. Although turnover among senior European fixed-income leaders has been higher than expected, the combination of Rieder and Brownback’s more than three decades experience each, a deep analyst pool, and deep firm resources preserves a high conviction in the team’s capabilities.
Process
Pimco’s High Process Pillar rating stems from a flexible, theme-driven approach anchored in firmwide macro views. The portfolio’s contours reflect top-down positioning and relative valuations determine sector, country and yield curve positioning. The strategy permits up to 10 percent below-investment-grade exposure and no formal limit on emerging-market exposure giving the team ample flexibility. Duration is actively managed within a two-year band around the benchmark. Historically Balls preferred to run it short, though rising yields in 2025 prompted a shift to a modest overweight duration.
Blackrock World Bond earns an Above Average Process Pillar rating. Its philosophy emphasizes relative-value opportunities from sector rotation, security selection, and curve trades, with directional duration, country and currency positions as secondary drivers. The approach draws on weekly global-bond forums and the Blackrock Investment Institute, ensuring structured implementation rather than large top-down bets. In contrast to Pimco, duration is usually within 20 percent of the benchmark’s, with benchmark-aware, risk-controlled positioning, resulting in a disciplined implementation.
Portfolio
By late 2025, Pimco held an effective duration of 6.8 years versus the benchmark’s 6.3, reflecting overweight positions in the UK, Australia, and Italy. US agency-mortgage backed securities and US Treasury Inflation-Protected Securities also contributed meaningfully to duration. Corporate exposure stood at 11 percent, all investment-grade, as the team avoided high-yield issuers. A rotation away from Danish and US agency mortgages toward investment-grade emerging-markets debt lifted EM holdings to 22 percent across hard- and local-currency bonds. Currency positioning featured shorts in the Singapore, Australian, and Canadian dollars to fund longs in higher-yielding Latin American and Eastern European currencies.
Blackrock’s portfolio also maintains a broad opportunity set, with maximum 30 percent permitted in non-investment-grade credits, 10 percent in high-yield emerging-markets bonds and active currency risk capped at 15 percent against the US dollar. By October 2025, the team was overweight duration, as they trimmed Europe and increased the overweighting in the US. Emerging-markets debt reached 21 percent, with roughly three-quarters in local-currency exposures such as Mexico, Brazil, India, and South Korea. Securitized assets made up 38 percent of the portfolio, and high-yield corporates 10 percent. Active currency calls included an underweighting in the US dollar and euro in favour of emerging-markets currencies. In the euro-hedged share classes of both funds, the net impact of currency positions depend on their relative value versus the euro.
Performance
Pimco GIS Global Bond has benefited over time from strong security selection across sovereigns, corporates, securitized assets, and currencies. A decisive overweight to US duration during the first-quarter 2020 shock paid off, while subsequent allocations to UK and US mortgages, Italian sovereigns, and corporates supported the rebound that followed. In 2023–24, senior financials and non-agency mortgages were key contributors. In 2025, US and euro-area rate positioning, the US agency mortgage-backed securities and select emerging-markets exposures added further gains.
Blackrock World Bond has delivered more measured long-term outcomes, with returns driven by incremental risk-adjusted returns. It participated in the post-Covid 2020 recovery through emerging-markets currencies and investment-grade credit exposure but lagged in 2022 owing to overweightings in emerging-markets and spread sectors overall. In 2025 through October, securitized assets, emerging-markets exposure, and its high-yield stake were the primary contributors.
Elbie Louw CFA CIPM is a senior analyst in manager research at Morningstar Benelux. Morningstar is a member of the Investment Officer expert panel.