David Fisher, Head of Traditional Product Strategies:Now, one of the pitfalls that investment managers can fall into is becoming overly confident in their outlook. So how does PIMCO help avoid groupthink, or having too much conviction in that baseline outlook?
Dan Ivascyn, Group Chief Investment Officer:Sure. That’s an area, as you know, that we’ve worked on over the course of the last several years. It continues to be a key priority, and I believe we are making significant strides in increasing optimal decision-making, or increasing our focus on optimal decision-making. One thing that we’ve done increasingly is to measure our views a bit more. We’ve always had a macro-oriented investment process that is centered around our forums.
Shots from a PIMCO forum.
At the start of our forums, each period today, we take a very hard and precise view towards the decisions that we made in prior periods.
We’ve begun to formalize that more, with a higher degree of precision, where we look back on and focus in particular on areas that we missed, areas where our decisions or our process perhaps was lacking in some areas, and where there were more opportunities for improvement.
Shots from a PIMCO meetings and employees workings.
During our more frequent investment committee discussions, we’re also measuring much more frequently, both individual views, group views, and how those views evolve over time. And then using technology, using more abundant data to be much more precise in terms of overall portfolio attribution.
A lot more investment in technology, a lot more investment in data, and using independent teams within analytics, risk management in the portfolio group to help guide this process, to act as independent referees, if you will, to ensure that we have as an objective a process and decision-making framework as possible. We’re working very, very hard as a group to be more efficient and more effective on behalf of our client base.
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