|
|
 |
| PIMCO CommodityRealReturn Strategy |
|
|
|
|
| Investment Style |
|
PIMCO manages commodityrealreturn strategy by combining a position in commodity-linked derivative instruments backed primarily by a portfolio of inflation-indexed securities. This provides a Double RealTM response to inflation rates and changes in inflation. Other fixed income instruments may also be used tactically in the portfolio. The commodity-linked derivatives capture the price return of the commodity futures market, while our active management of the fixed income assets seeks to add incremental return above those markets, along with additional inflation hedging. If our active management of the fixed income portion of the portfolio outperforms, we generate an incremental return over the commodity markets. Commodityrealreturn strategy combines the benefits of the commodity markets with the potential for additional real returns, at lower volatility of relative performance than is commonly associated with fully active commodity management styles.
|
|
| Benchmark |
|
Dow Jones UBS Commodity Total Return Index. |
|
| Portfolio Duration |
|
Duration will vary based on PIMCO’s forecast for interest rates and under normal circumstances will be similar to the Barclays Capital U.S. TIPS Index duration. |
|
| Market Sectors
Utilized |
|
Government, Corporate, Mortgage, Asset Backed, Money Market, Emerging Markets, Inflation Linked, Hedged International, Equities and Convertible Securities. |
|
| Value Added |
|
Commodity real return seeks to add value through multiple sources including:
- Active Short Duration Management
- Credit Analysis (Risk Premiums)
- Yield Management
- Quantitative Research
- Cost Efficient Trading
|
|
| For more information, please go to the
Contact Us page. |
|
|
|
|
|
|
Past performance is not a guarantee or a reliable indicator of future results. Commodities contain heightened risk including market, political, regulatory, and natural conditions, and may not be suitable for all investors. The strategy will seek exposure to commodities through commodity-linked derivatives. Derivatives and commodity-linked derivatives 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. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and while generally backed by a government, government-agency or private guarantor there is no assurance that the guarantor will meet its obligations. TIPS issued by the U.S. Government are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. 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. Investing in non-U.S. securities involves heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Convertible securities may be called before intended, which may have an adverse effect on investment objectives.
Barclays Capital U.S. TIPS Index is an unmanaged market index comprised of all U.S. Treasury Inflation Protected Securities rated investment grade (Baa3 or better), have at least one year to final maturity, and at least $250 million par amount outstanding. Performance data for this index prior to 10/97 represents returns of the Barclays Capital Inflation Notes Index. Prior to November 1, 2008, this index was published by Lehman Brothers. The Dow Jones AIG Commodity Total Return Index is an unmanaged index composed of futures contracts on 19 physical commodities. The index is designed to be a highly liquid and diversified benchmark for commodities as an asset class. Prior to May 7, 2009, this index was known as the Dow Jones AIG Commodity Total Return Index. It is not possible to invest directly in an unmanaged index.
This material has been distributed for educational 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 of Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, CA 92660. ©2008, PIMCO.
|
|