Investors may have a lot on their minds these days: a late-cycle market subject to bouts of volatility and illiquidity, and a global economy offering significant potential – and significant risks. Amid these uncertainties, many investors have gone on the defensive, turning to money market funds and other traditional vehicles geared toward liquidity and capital preservation. Instead, those who can bear a modest increase in risk may want to consider a more active, sustainable approach, which also reflects a growing preference for investments that “do good while doing well” – that is, investments focused on environmental, social, and governance (ESG) factors.

In this Q&A, portfolio managers Nathan Chiaverini, Jelle Brons, and Jerome Schneider and strategist Ken Chambers discuss the outlook for cash and short-term markets with an ESG lens. They suggest that investors seeking to influence positive change with their short-term assets may find an attractive option in PIMCO Enhanced Short Maturity Active ESG ETF (ticker EMNT), an ultra-short active bond strategy.

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The Author

Nathan Chiaverini

Portfolio Manager, Short-Term Desk

Jelle Brons

Portfolio Manager, Global Investment Grade Credit

Jerome M. Schneider

Head of Short-Term Portfolio Management

Kenneth Chambers

Fixed Income Strategist

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A word about risk: Investing in the bond market is subject to certain risks including the risk that fixed income securities will decline in value because of changes in interest rates; the risk that fund shares could trade at prices other than the net asset value; and the risk that the manager's investment decisions might not produce the desired results. 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. 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. 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. Diversification does not ensure against loss.

Socially responsible investing is qualitative and subjective by nature, and there is no guarantee that the criteria utilized, or judgment exercised, by PIMCO will reflect the beliefs or values of any one particular investor. Information regarding responsible practices is obtained through voluntary or third-party reporting, which may not be accurate or complete, and PIMCO is dependent on such information to evaluate a company’s commitment to, or implementation of, responsible practices. Socially responsible norms differ by region. There is no assurance that the socially responsible investing strategy and techniques employed will be successful. Past performance is not a guarantee or reliable indicator of future results.

There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. Investors should consult their investment professional prior to making an investment decision.

The Morningstar Fixed Income Fund Manager of the Year award (U.S.) is based on the strength of the manager, performance, strategy and firm's stewardship.

PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the 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. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2020, PIMCO.

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CMR2020-0122-435029

The New Sustainable Finance Principles
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