New Fund Aims to Help Investors Meet Market Challenges and Rising Tax Burdens
NEWPORT BEACH, CA (July 1, 2009) – PIMCO, a leading investment management firm, has launched the PIMCO MuniGO Fund, which will focus on the highest-quality municipal bonds in an actively managed portfolio designed to offer attractive tax-exempt returns. MuniGO is the first mutual fund to offer investors a portfolio of intermediate maturity general obligation bonds from top-rated municipal issuers, as well as pre-refunded municipal bonds backed by U.S. Treasury and Agency securities. The fund is managed by PIMCO Executive Vice President John Cummings, who heads the firm’s municipal bond trading desk.
Increasing U.S. government indebtedness, along with rising costs for healthcare and education, are threatening to force an increase in marginal tax rates for most investors in the years to come. This means investors may benefit from investment solutions that employ municipal bonds, which are among the most effective tools for earning income that is exempt from federal, and in some cases, state income tax. Yet investing in the municipal market requires credit skills and market reach due to ongoing dislocations in financial markets and the many challenges that state and local governments face.
“More than ever, municipal bonds are crucial for a wide array of portfolios, as investors face the potential for higher taxes and elevated risks across the financial markets,” said Mr. Cummings, portfolio manager for the fund. “MuniGO taps into the many strengths of PIMCO – including credit and yield curve analysis, portfolio construction and trade execution – to offer a unique fund that will focus on the highest-quality sectors of the municipal market.”
The MuniGO Fund aims to outperform its benchmark, the Barclays Capital GO Index, through active management of a portfolio of municipal bonds, specifically high-quality general obligation bonds and pre-refunded bonds backed by U.S. Treasury and Agency securities. Relative to individually constructed laddered municipal bond portfolios, the fund aims to generate attractive returns through PIMCO’s proven security selection and trade execution capabilities. Investors may also benefit from the daily liquidity of a mutual fund structure.
Institutional shares of the MuniGO Fund trade with the ticker PMGOX. Shares carrying an upfront fee (A shares) trade with the ticker APNAX, “C” shares trade with the ticker APNCX, and no-load “D” shares trade with the ticker APNDX.
About PIMCO
PIMCO, founded in 1971, is a global asset management firm that manages investments for an array of clients, including retirement and other assets that reach more than eight million people in the U.S. and millions more around the world. Our clients include state, municipal and union pension and retirement plans whose beneficiaries come from all walks of life, from educators to healthcare workers to public safety employees. We have a substantial individual investor client base, and work in partnership with financial intermediaries such as registered investment advisors, broker/dealers, trust banks and insurance companies. We are also advisors and asset managers to central banks, corporations, universities, foundations and endowments. With offices in North America, Europe, Asia and Australia, we manage investments across a full spectrum of global financial markets. PIMCO is owned by Allianz Global Investors, a subsidiary of the Munich-based Allianz Group, a leading global insurance company.
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Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus, which may be obtained by contacting your PIMCO representative. Please read the prospectus carefully before you invest or send money.
Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk; investments may be worth more or less than the original cost when redeemed. U.S. Government securities are backed by the full faith of the government; portfolios that invest in them are not guaranteed and will fluctuate in value. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. Investors will, at times, incur a tax liability. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax.
The value of most bond funds and fixed income securities are impacted by changes in interest rates. Bonds and bond funds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise.
Except for the historical information and discussions contained herein, statements contained in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
PIMCO Funds are distributed by Allianz Global Investors Distributors LLC, 840 Newport Center Drive, Newport Beach, CA 92660, (800) 927-4648.