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Strategy OverviewThe PIMCO Global Short Term strategy seeks a higher risk/return profile in order to improve on the returns provided by a typical money market vehicle. The Global Short Term strategy seeks maximum total return, consistent with preservation of capital and a high level of liquidity. The Global Short Term strategy attempts to generate excess returns relative to its three-month US$ Libor benchmark by investing in money market, short maturity and longer-maturity global fixed-income securities on a currency hedged basis.
PIMCO utilizes all major sectors of the bond markets to implement a diversified set of strategies including country, currency and sector rotation, yield curve positioning and duration management. The size and changing dynamics of the global bond market represent a rich opportunity set for investors with tangible diversification and return benefits.
Key principals of our global investment philosophy include:
Formal Global Strategy Meeting
Ongoing Research Analysis
Fundamental to the process of risk control are the analytical tools which are available to measure and monitor volatility in the portfolio. PIMCO has invested considerable resources in developing its own proprietary models to help in this analysis. These models include our Bonds Under Management report which gives extensive summary information of portfolio holdings; a Risk Optimiser which indicates an optimum portfolio structure for a set of expected returns, volatilities and correlations; and our own proprietary Level, Slope and Curvature model which gives a more accurate measure of individual security and portfolio risk than traditional duration and convexity analysis would allow.
Extensive use of analytical models allows us to leverage our investment professionals and provides a dispassionate check on our investment decisions. It also permits us to perform attribution analysis to determine which strategies are consistently adding value as well as those that are not.
Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Currency rates may fluctuate significantly over short periods of time and may reduce the returns of a portfolio. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. PIMCO strategies utilize derivatives which may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. There is no guarantee that these investment strategies will work under all market conditions and each investor should evaluate their ability to invest for a long-term especially during periods of downturn in the market. Diversification does not ensure against loss.
LIBOR (London Interbank Offered Rate) is the rate banks charge each other for short-term Eurodollar loans. It is not possible to invest directly in an unmanaged index.
This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2014, PIMCO.
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