Pimco is warning about a spike in defaults — How it says income investors should position portfolios

Pimco is warning fixed-income investors to stay away from lower-quality credit, but sees plenty of opportunities in high-quality assets. The global asset manager, which has $2.27 trillion in assets under management, said in its 2026 outlook that the "credit loss cycle is upon us." "After years of effortless returns, the default cycle is reasserting itself, and we expect significantly higher losses in lower-quality credit such as leveraged and private direct lending," said the report, authored …