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| PIMCO StocksPLUS Strategy |
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| Investment Style |
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StocksPLUS is a unique equity strategy which offers the potential for consistent excess returns over the S&P 500 while maintaining a very similar risk profile to that of the index. PIMCO manages StocksPLUS by combining a non-leveraged position in synthetic S&P 500 Index instruments (primarily Index futures and sometimes Index swaps) with a short duration fixed income portfolio. The synthetic S&P 500 Index instruments capture the returns of the Index, while our active management of the short duration fixed income assets seeks to add incremental return above the Index. Because the S&P futures contracts are priced such that a combination of futures and money market investments should produce a return equal to that of the S&P index, our active management of the short duration assets seeks to outperform money market rates, thereby generating an incremental return over the S&P 500. Sometimes referred to as an enhanced index strategy, StocksPLUS combines the benefits of index fund management with the potential for excess returns, at lower volatility of relative performance (tracking error) than is commonly associated with fully active equity management styles. |
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| Benchmark |
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S&P 500 Index |
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| Portfolio Duration |
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Duration is limited to a maximum of one year and generally ranges between 0.2 and 0.8 years. |
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| Market Sectors
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Government, Corporate, Mortgage, Asset Backed, Money Market, Emerging Markets, Inflation Linked and Hedged International. |
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| Value Added |
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StocksPLUS seeks to consistently add value through multiple sources including:
- Active Short Duration Management
- Credit Analysis (Risk Premiums)
- Yield Management
- Bottom Up Techniques to Identify Undervalued Securities
- Quantitative Research
- Cost Efficient Trading
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| For more information, please go to the
Contact Us page. |
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Past performance is not a guarantee or a reliable indicator of future results. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. 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. 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. 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.
The Standard & Poor’s 500 Index (S&P 500) is an unmanaged index of U.S. companies with market capitalizations in excess of $4 billion. It is generally representative of the U.S. stock market. 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.
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