Core Low Duration Managed Account

in-page

Strategy Overview

Highlights

A low turnover, low duration core bond strategy that seeks to optimize income, consistent with preservation of capital and prudent investment management, by investing in a diversified portfolio of high quality shorter-term bonds.

Seeks consistent income across different market environments.

Leverages PIMCO’s time-tested investment process, which has been honed across virtually every market environment for over 50 years. Our rigorous process is supported by a team of global investment professionals, consisting of portfolio managers and a global credit analyst team

RELATED

Process & Philosophy

Investment Process

PIMCO is committed to active bond management within a long-term framework. Our investment process begins with our annual Secular Forum, where we develop our three- to five-year outlook for the global economy, inflation and interest rates. Through our quarterly cyclical forums, we assess the more short-term trends – those in the next 6 to 12 months – within our long-term outlook.

The investment forums help guide exposures in portfolios to specific factors, including interest rate sensitivity and credit risk. Rigorous bottom-up analysis, using advanced proprietary tools and the firm’s expertise across fixed income markets, drives the security selection process and facilitates the identification and analysis of undervalued securities.

The objective is to combine perspectives at both the portfolio and security levels to consistently add value over time with prudent acceptable levels of portfolio risk.

Portfolio Construction

PIMCO Core Low Duration Managed Account focuses on high quality and shorter-term bonds across a range of fixed income markets: U.S. government, including its agencies and instrumentalities, U.S. agency mortgage-backed securities, and investment grade corporate credit.

The managed account portfolio will consist of:

  • •Physical cash bonds denominated in U.S. dollar (USD).
  • •Minimum Average Portfolio Quality of A-, and Minimum Issue Quality of BBB-.
  • •The managed account’s average duration will normally reside within a range of 1-3 years, and can vary depending on PIMCO’s outlook for interest rates, the economy, and other fixed income related risk factors.

Emphasizes diversification – aiming to avoid concentrated risk exposures – in an effort to source yield from a diversified mix of securities that span the most liquid segments of the bond market.

Managers

Jerome M. Schneider

Head of Short-Term Portfolio Management

View Profile for Jerome M. Schneider

Andrew T. Wittkop

Portfolio Manager, Treasuries, Agencies, Rates

View Profile for Andrew T. Wittkop

Geoff Miles

Portfolio Manager, Short-Term

View Profile for Geoff Miles

Disclosures

The managed account strategies described in this material are offered by Pacific Investment Management Company LLC and are available exclusively through financial professionals. Managed accounts have a minimum asset level and may not be suitable for all investors. Financial professionals seeking more information should contact their managed accounts department or call their PIMCO representative.

Past performance is not a guarantee or a reliable indicator of future results.


The managed account strategies described in this material are offered by Pacific Investment Management Company LLC and are available exclusively through financial professionals. Managed accounts have a minimum asset level and may not be suitable for all investors. Financial professionals seeking more information should contact their managed accounts department or call their PIMCO representative.


Individual account holdings will vary depending on the size of an account, cash flows and account restrictions. Portfolio holdings are subject to change daily without notice. At any time an individual account managed in this strategy may or may not include securities held by another portfolio. Consequently, any particular account may have portfolio characteristics and performance that differ from another individual account in this strategy.

A word about risk:

Investing in the bond market is subject to certain risks, including market, interest rate, issuer, credit and inflation risk. 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. Sovereign securities are generally backed by the issuing 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. Inflation-linked bonds (ILBs) issued by a government are fixed income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Floating rate loans are not traded on an exchange and are subject to significant credit, valuation and liquidity risk. 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.

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.
Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660 is regulated by the U.S. Securities and Exchange Commission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2022, PIMCO.
CMR2021-0719-1724079