Now is the time to stay “patient” because assets are expensive, volatility is likely to rise and growth is slowing, according Pacific Investment Management Co.’s group chief investment officer.

“We are patient and defensive, maintaining portfolio flexibility with almost every decision we make so we can go on offense on behalf of investors when we see attractive opportunities,” Dan Ivascyn said in an interview PIMCO posted Friday.

The $131 billion Pimco Income Fund, which Ivascyn co-manages with Alfred Murata and Joshua Anderson, is up 6.45% this year, in the bottom quartile of its peers, its worst relative performance in a decade. Its five-year annualized return of 5.24% is better than 98% of peers.

For now, it’s hard to find opportunities, Ivascyn said, because:

• Equity and credit markets have “a high degree of fragility” but rate cuts by the Federal Reserve and accommodative interventions by central banks in China, Europe and elsewhere have led to “complacency that policy makers can engineer a soft landing.”
• Investors are at “significant risk” of underperformance if bond yields rise.
• Global growth is slowing, with the U.S. expected to slip to 1% in the first half of 2020.
• Odds of a U.S. recession are 30% in the next 12 months. “We think we’ll avoid recession, but we do see the probability increasing.”