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Strategy OverviewPIMCO’s Prime Money Market strategy is designed to maximize current income while preserving capital and providing daily liquidity. To meet these goals, money market strategies traditionally invest in short-term, high-quality, fixed-income securities with minimal volatility and credit risk. These include, but are not limited to, U.S. Treasury securities, federal agency securities, commercial paper, banker’s acceptances, certificates of deposit, short-term corporate debt, and variable and floating rate debt securities.
The objective is to consistently outperform both a passive and active benchmark without taking on excess risk. The passive benchmark is represented by the Citigroup 3 Month Treasury Bill Index and the active benchmark is represented by the Lipper Money Market Index of the 30 largest money market mutual funds.
PIMCO’s Prime Money Market strategy has a wide variety of practical applications in a client’s portfolio. It seeks competitive short-term rates while focusing on principal stability and liquidity. Practical applications include:
Our investment process utilizes both “top-down” and “bottom-up” strategies. Top down strategies are driven by our secular outlook of the forces likely to influence the economy and financial markets over the next three to five years and our cyclical views of two- to four-quarter trends. Implementation in portfolios is effected by selecting securities that achieve these designated objectives. Bottom up strategies drive our security selection process and facilitate the identification and analysis of undervalued securities. By combining perspectives from both the portfolio and security levels, we strive to add value over time within acceptable levels of portfolio risk.
Past performance is not a guarantee or a reliable indicator of future results. Money market strategies are not insured or guaranteed by the FDIC or any other government agency and although they seek to preserve the value of your investment, it is possible to lose money by investing in the strategy. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Certain U.S. Government securities are backed by the full faith of the government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value. The credit quality of a particular security or group of securities does not ensure the stability or safety of the overall portfolio. Diversification does not ensure against loss.
The Citigroup 3-Month Treasury Bill Index is an unmanaged index representing monthly return equivalents of yield average of the last three 3-Month Treasury Bills issues (excluding the current month-end bill). The Lipper Money Market Fund Index is comprised of funds that invest in high-quality financial instruments rated in the top two grades with dollar-weighted average maturities of less than 90 days. Lipper Fund indices are calculated using a weighted aggregative composite index formula that equal-weights the constituent funds and reinvests capital gains distributions and income dividends. 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, 840 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2014, PIMCO.
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