Municipal Opportunistic Value Managed Account

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Strategy Overview

Highlights

Aims to pursue high-yielding, high quality opportunities that can arise from the temporary mispricing of nonstandard municipal structures during market dislocations

Invests in complex bond structures across the yield curve, adjusting duration depending on where we believe we can find the most value given market conditions

Offers two funding options, both seeking to maximize absolute-value: Traditional, which takes a patient capital call approach, and Fully Funded, which invests more quickly and strategically repositions as appropriate opportunities arise

Strives to maximize the tax-efficiency of Municipal Opportunistic Value portfolios by providing the option of National or California state-specification

Benefits from our specialized separately managed accounts (SMA) team, which is committed to providing premier service tailored to the needs of our SMA clients

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Process & Philosophy

Investment Process

Utilizing our disciplined investment research process, PIMCO aims to uncover value and protect principal in clients’ municipal investment portfolios through comprehensive credit and quantitative research. Leveraging our quantitative research to calculate what we believe are more accurate valuations of non-standard bond structures, we identify attractive investment opportunities. By way of holistic fundamental credit research, we also aim to select securities possessing underlying credit strength that may be misaligned with market perception, positioning us to capture alpha while mitigating downside risk.

Municipal Bond Philosophy

Taking a 360-degree view, we seek to maximize tax-efficient income and help preserve principal by investing in high quality municipal bonds. Our muni experts identify opportunities and potential risks in the municipal bond market using fundamental bottom-up analysis informed by PIMCO’s top-down global macroeconomic outlook. By applying institutional discipline to a muni market traditionally comprised of smaller investors, we believe our muni platform is distinctly positioned to capitalize on market inefficiencies to unlock potential in clients’ muni portfolios. Supported by our specialized team of muni SMA experts, our muni SMA clients may additionally benefit from our belief that individual clients should receive individualized service.

Portfolio Construction

In seeking to maximize income in line with its absolute-value mandate, PIMCO's Municipal Opportunistic Value strategy employs a patient investment approach and strategically seeks to find value across the entire municipal yield curve. Our team applies time-tested expertise managing this strategy to actively invest at times when we believe current market conditions offer a sufficient volume of investment opportunities that meet our strict yield targets. As such opportunities often arise during fleeting periods of market dislocation and illiquidity, we depend on our analytical dexterity to quickly and accurately price and assess the credit risk of the complex securities we uncover. We believe our expertise in pricing structures that may be misunderstood by the broader market makes us well equipped to quickly secure high quality bonds with an aim to capture above-market yields during volatile periods. Taking a contrarian view to municipal investing, the strategy leverages our full breadth of capabilities to identify what we believe are attractive municipal bond investments within the investment grade market that others may have missed.

Managers

Brian Hannibal

Portfolio Manager

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David Hammer

Portfolio Manager

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Peter Gunther

Portfolio Manager, PIMCO Municipals

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Samantha Wilson

PIMCO Municipals

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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:
All investments contain risk and may lose value. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Income from municipal bonds while exempt from federal taxes may be subject to state and local taxes and at times the alternative minimum tax; a strategy concentrating in a single or limited number of states is subject to greater risk of adverse economic conditions and regulatory changes. PIMCO does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax or legal questions and concerns. The credit quality of a particular security or group of securities does not ensure the stability or safety of an overall portfolio.
There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.

There can be no assurance that the investment approach outlined above will produce the desired results or achieve any particular level of returns. The references to yield targets is not a guarantee, projection, or prediction of future results. There can be no assurance that the opportunities in which the strategy seeks to invest will continue to be available. 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 current 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. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

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 LLC in the United States and throughout the world. ©2023, PIMCO.
CMR2022-0407-2117359