Real Return Managed Account


Strategy Overview


A core inflation protection, or real return, strategy that invests primarily in high - quality inflation - linked bonds, including Treasury Inflation - Protected Securities (TIPS).

Targets a portfolio that offers liquidity, low credit risk, and a direct link to inflation - which can help investors keep pace with the rate at which costs are rising.

Can contribute to overall portfolio diversification because other financial assets, such as stocks or nominal bonds, may underperform in periods of higher inflation.

Use of a PIMCO managed commingled fund within the portfolio allows for greater diversification potential than smaller separate accounts could otherwise achieve.

Process & Philosophy

Investment Process

Our investment process utilizes both “top - down” and “bottom - up” strategies. Top - down strategies are deployed from a macro view of the portfolio driven by our secular outlook of the forces likely to influence the economy and financial markets over the next three to five years and our cyclical views of two - to four - quarter trends. Implementation in portfolios is effected by selecting securities that achieve the designated objectives. Bottom - up strategies drive our security selection process and facilitate the identification and analysis of undervalued securities. Here, we employ advanced proprietary analytics and expertise across the global fixed income markets. The objective is to combine perspectives from both the portfolio and security levels to consistently add value over time within acceptable levels of portfolio risk.

Real Return Philosophy

All of PIMCO’s real return strategies rely on our core competency in fixed income management, with the objective of maximizing real return while seeking preservation of the real capital of a portfolio. We believe that an active approach works in managing inflation - linked bonds, just as active management can add value in other sectors of the bond market. True to PIMCO’s core investment process, we rely on multiple value - adding sources to potentially enhance Real Return portfolio performance, rather than allow any single strategy to dominate returns. PIMCO has been investing in inflation - linked securities since the early 1990s and has taken a leading role in developing products and investment strategies that focus on them. We launched our Real Return strategy in 1997 - the same year that TIPS were introduced.

Portfolio Construction

PIMCO Real Return managed account portfolios are constructed with two components: a core segment of individual bonds that act as a foundation, and a PIMCO - managed sector - oriented commingled vehicle. The core segment represents approximately 55% of the overall portfolio, and focuses on TIPS and other high quality, liquid fixed income securities. The commingled component represents approximately 45% of the portfolio and invests in bonds of varying duration and credit quality – wherever portfolio management finds attractive, risk - adjusted real return potential.


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 appropriate for all investors. Financial professionals seeking more information should contact their managed accounts department or call their PIMCO representative.

The Managed Accounts strategy consists of individual securities and a select combination of proprietary, commingled vehicles. These vehicles are available only through managed accounts utilizing the Managed Accounts strategy and are available by prospectus only.

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

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 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.

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. Treasury Inflation-Protected Securities (TIPS) are ILBs issued by the U.S. Government. 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. 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.

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. 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.

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. ©2024, PIMCO.