A classic that never goes out of style! Ten billion dollars are flocking to Pimco's “60/40” fund to bet on “offensible, retractable and defensible” under the AI boom

Zhitong Finance App learned that Pacific Investment Management Co., one of the world's largest fixed income investment giants. (Pimco, Pacific Asset Management), a large mutual fund, received more than 10 billion US dollars in capital inflows in the first half of this year using the traditional allocation method of 60% and 40% of stocks and bonds, respectively. Pimco said this trend shows that investors in the Asian region are still in strong demand for this classic asset allocation strategy — in particular, investment demand from leaders in the Asian AI computing power industry chain is still booming, although this strategy is sometimes questioned due to extreme fluctuations in global stock and bond markets.

Marcio Bogoricin, head of Pimco's global wealth management business in Asia other than Japan, said that after evaluating the risks associated with the geopolitical conflict in the Middle East, wealthy clients from Taiwan, Hong Kong, Singapore, and mainland China became the main high-net-worth investor group for this large 60/40 fund this year.

As of June 30, the total assets of this balanced income and growth fund (Pimco Balanced Income and Growth Fund) under Pacific Investment Management have more than doubled since the end of 2025, reaching US$16.3 billion. The return on investment still exceeds 10% after deducting expenses for the first half of the year, which can be described as fully highlighting the revival of classic allocation strategies, AI computing power infrastructure growth exposure, and bond defense value attached to this 60/40 flagship fund at the same time.

The most classic “60/40 portfolio” in the financial market for a long time, that is, 60% stocks and 40% bonds.

From AI chips to Japanese semiconductor equipment giants, AI assets help Pimco's 60/40 strategy

The protracted US-Iran war has caused oil prices to fluctuate sharply since this year, raising concerns about inflation and raising the possibility that global central banks' benchmark interest rates will rise further. This has reduced the appeal of global bond assets to a certain extent, and has also shaken the idea that when stocks fall, bonds can provide active protection for investors in 60/40 portfolios. However, this large fund under Pimco continues to grow in size, and it has achieved double-digit returns.

“We're off to a strong start to the year.” Bogoricin said in an interview. “In March, after a new round of geopolitical war broke out in the Middle East, investors temporarily suspended their investment operations, but the capital inflows into the fund maintained a strong growth trend.”

As of June 30, the assets of Pimco's Balanced Income and Growth Fund reached US$16.3 billion, an increase of more than 100% over the end of 2025. The fund's return on investment after deducting fees was still over 10% in the first half of this year, compared to 21.65% the year before.

Bogoricin said that the fund's 60% share allocation last year fully grasped the artificial intelligence computing power-themed trading opportunities by investing in semiconductor companies from Asia, such as Samsung Electronics, SK Hynix, and TSMC, which occupy a central position in the global AI computing power industry chain. At that time, the market value of these companies soared sharply. However, earlier this year, the fund began to make moderate profits and actively cut these exposures, which is why the subsequent collective collapse in Asian hashrate stocks in late June did not have much impact on the fund.

Recently, Bogoricin said that the large 60/40 strategic fund has been looking for investment opportunities for high-end semiconductor equipment suppliers in stock markets other than the US, such as Tokyo Electronics, Lasertec, and Edwin Testing from the Japanese stock market.

Compared to the US and South Korean stock markets, which have also been dominated by the recent AI computing power frenzy, the Japanese market is unique in that it doesn't have AI chip/memory chip superdominators like Nvidia, AMD, Micron, SK Hynix, and Samsung, but it has a large number of indispensable AI assets deeply embedded in the AI computing power industry chain, such as Tokyo Electronics, Edwin Test, Disco, Lasertec, Socionext, and SoftBank, so foreign investors generally regard Japan as the “second battleground in the AI computing power infrastructure industry chain.”

Compared to Applied Materials and Fanlin, two major semiconductor equipment giants headquartered in the US, Tokyo Electron (Tokyo Electron) from Japan has the highest market share in the world in the coating machine and developer (Coater/Developer) sector. Tokyo Electronics is the strongest competitor for applied materials in the fields of ALD, CVD, PVD, RTP, CMP, etching, and ion implantation equipment.

At TSMC and Intel chip factories, Tokyo Electronics and Applied Materials can be described as ubiquitous. Unlike Asmack, which has always focused on the field of lithography, Lam Research (Fanglin) focuses more on etching, cleaning, graphics and key film manufacturing processes, focusing on high depth ratio (HAR) etching/deposition and related process capabilities required for advanced HBM storage. The high-end equipment provided by Tokyo Electronics and Applied Materials plays an important role in almost every step of chip manufacturing. Its products cover important core manufacturing processes such as atomic layer deposition (ALD), chemical vapor deposition (PVD), and rapid heat treatment (RTP).

Morningstar, one of the internationally renowned credit rating agencies, tracked 250 funds with similar asset allocation structures. According to its latest compiled data, since the beginning of 2025, Pimco's large 60/40 strategic fund (Pimco Balanced Income and Growth Fund) has received a net inflow of more than 14 billion US dollars, almost three times the size of the second-ranked Allianz Revenue and Growth Fund.

Sam Hui, senior analyst at Morningstar, said the fund benefits from a relatively large “neutral stock allocation position.” “Its performance also surpassed its 60/40 long-term investment performance benchmark, showing its strong strength in stock and bond screening and timing in the Asian market.”

60/40 is not about evacuating AI; it is putting bonds on AI a super safety cushion

Pimco's latest 60/40 strategic fund's strong cash absorption trend highlights that the Asian AI bull market is not over, but more mature capital is using bonds to reduce portfolio fluctuations and spread equity asset allocation exposure from crowded leaders to semiconductor equipment leaders, advanced packaging, and power infrastructure links that have not yet been fully priced.

The Pimco 60/40 Fund attracted more than $10 billion in the first half of the year, particularly high-net-worth capital from Asia. The core signal was not that investors were suddenly convinced that stocks and bonds would always be negatively correlated, but rather that Asian high-net-worth funds were shifting from unilaterally betting on risky assets to a combined structure of “retaining exposure to growth while buying interest and recession protection”.

Currently, higher bond yields can provide considerable holding returns; if the economy slows down significantly and major central banks have more room to cut interest rates than the decade before the pandemic, high-quality bonds may still act as capital gains and risk buffers. However, when the Middle East conflict pushes up oil prices and inflation, equity bonds may still fall at the same time, so Pimco's 60/40 asset recovery trend relies more on active long-term management, credit selection, and stock selection rather than mechanical allocation. Pimco itself also emphasized that bonds still have decentralized allocation value during the economic downturn.

As for the Asian AI computing power chain, this capital inflow is generally favorable, but it reveals clear internal rotation: the fund captured the first stage of AI chip revaluation through Samsung Electronics, SK Hynix, and TSMC last year, and this year began cutting core holdings, which had already risen sharply, and switched to equipment suppliers in markets other than the US, such as Japan. This does not negate AI demand, but rather spreads from high-beta winners in AI ASIC/GPU, HBM/DRAM/NAND, and foundry to a “toll booth” for capital expenses in the semiconductor industry chain such as etching, deposition, inspection, cutting, and advanced packaging and materials. One of the largest customers of semiconductor equipment manufacturers, TSMC's second-quarter revenue increased 36% year over year, and the annual capital budget was significantly raised to 60 billion to 64 billion US dollars due to demand for AI and smart devices.

The medium-term outlook for the Asian AI computing power chain is still strong, but the main investment line is shifting from “any AI computing power keyword can rise sharply” to order visibility, technical barriers, capital efficiency, and valuation discipline. SEMI expects global semiconductor equipment sales to grow 23.2% to US$165.9 billion in 2026 and reach US$229.5 billion in 2028, providing a longer boom window for Japanese equipment and materials suppliers.

For the global equity market, this means that capital is not fully shifting to safe haven, but rather establishing a classic bond position with a “moderate risk appetite+higher margin of safety”: stocks continue to bear profit growth, and bonds bear income and tail protection. The fund obtained double-digit returns after deduction, while outperforming its 60/40 average benchmark, indicating that the future equity market is more likely to be dominated by active management rather than simple index beta. The global stock market can still rise as profits grow, but long-term interest rates, oil prices, and inflation will limit the unlimited expansion of valuations; the bond market has long-term cost-effective yield pricing and the current high interest rate advantage, but it is necessary to avoid excessive periods of time, sensitive financial supply, and low-quality credit assets.