Pacific Investment Management Co., home to the world's biggest fixed-income fund, is shying away from risky assets as it sees a growing disconnect between the performances of financial markets and the global economy.

“Especially with ever-elevated prices, and absent a favorable growth shift, we will continue to bring down risk postures of portfolios,” said Mohamed El-Erian, chief executive officer of Newport Beach, California-based Pimco, outlining the company's investment strategy over the next three to five years.

In a report posted today on Pimco's website, El-Erian said the world economy is undergoing a “stable disequilibrium” that could end in financial turmoil, greater social tensions, and beggar-thy-neighbor national policies. Egged on by “hyperactive” central banks, investors are playing down the dangers and pushing financial markets higher, he said.