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We've had a short-term franchise for many, many years--decades, in fact.

The short-term fund's been around for almost three decades.

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As we entered 2014 and on to 2015, it became increasingly apparent that global central-bank policies were going to become very divergent, and we had to think about that in two prospects. investors who are already facing a near-zero-rate environment, how do we help protect capital and produce some return?

One, what does that mean in terms of protecting one's capital? So, for us at PIMCO, we're always focused on those macroeconomic conditions.

For us on the front end--specifically the short-term franchise--we need to be specifically focused on it to understand what the Fed's going to do and take advantage of those opportunities as they percolate globally.

For us, that's really the focal point, which differentiates us.

I'm here from Morningstar with Jerome Schneider--he is Morningstar's Fixed-Income Fund Manager of the Year.

We're going to talk to him a little bit today about the short-term funds that he runs, including PIMCO Short-Term Bond Fund (PTSHX), which is the main product that he operates. First of all, cash management is at the forefront of most people's mind, especially with all the volatility in the broader markets these days.

The way we really think about it--starting with the macro and the macroeconomic themes--it's very important now, more than ever, to be really encapsulating in your investment thesis what's going on with differentiating global central-bank policies.

Long story short: In the past, front-end people used to just simply focus on what the Fed was doing; but ever since the global financial crisis, we've really had to think about the global effects of things like quantitative easing--not just from the Fed but other central banks globally.

It's about having degrees of freedom, diversifying your risk, diversifying your sources of liquidity, and ultimately hopefully producing some positive returns both in a nominal sense and also in inflation-adjusted terms for your clients.

Read Full Transcript So, you mentioned a few interesting themes that are kind of important. You mentioned the front end--obviously, the short-term, short-maturity part of the market effectively. And we're at a point right now where there's a lot of discussion about whether or not the Fed was a little hasty in raising rates in December, even though that was something that seemed inevitable for the course year.

And ever since then, we're at this point where now we're even talking about whether or not they made a mistake. Give us a little thumbnail, if you would, about what PIMCO's thinking is in terms of how that might play out.