Investment Process
PIMCO is committed to active bond management utilizing a long - term framework, with a focus on delivering alpha (excess returns) over the market cycle. Through its annual Secular Forum, the firm develops a 3 - 5 year outlook for the global economy, inflation and interest rates, which provides the guardrails for our long - term portfolio construction and positioning. Through our quarterly Cyclical Forums we refine these inputs to help set the near - term portfolio strategy. We combine this macro investment process with rigorous bottom - up analysis, utilizing advanced proprietary tools and the firm’s expertise and presence across global fixed income markets to drive the security selection process. The objective is to combine perspectives from both the portfolio and security level to consistently add value over time with acceptable levels of portfolio risk.
Low Duration Philosophy
Low Duration Managed Accounts portfolios offer the advantage of a core bond investment – delivering broad market exposure – while emphasizing shorter - term securities. With a duration range between 0 – 3 years, the strategy typically offers a yield advantage over more conservative short - duration fixed income vehicles (money market funds, for example) by capitalizing on a wider opportunity set in order to generate excess returns. Moreover, while more volatile than money market funds, the focus on shorter - duration securities will result in less interest rate risk and lower volatility versus traditional long - and intermediate - term core bond funds. The strategy employs a total return approach, seeking both income and capital appreciation to generate returns. PIMCO pioneered this philosophy more than 40 years ago and it has been a critical component to the firm’s long - term performance record.