Inflation Response Multi-Asset Fund

PPRMX

Updated August 23, 2019

Objective

Seeks total return which exceeds that of its benchmark

Primary Portfolio

Treasury Inflation-Protected Securities (TIPS), commodities, emerging market currencies, real estate investment trusts, gold and PIMCO funds

Overview

Fund Overview

A comprehensive approach to help hedge inflation risks

By investing in a blend of inflation-related asset classes, the fund seeks to help preserve and grow purchasing power, enhance portfolio diversification, and guard against market shocks across varying inflation environments.

Why Invest In This Fund

Real return expertise

PIMCO is one of the world’s largest investors in inflation-related assets. By drawing on the expertise of our global portfolio management team, as well as PIMCO’s firmwide resources, the fund is able to take advantage of our macro inflation outlook and bottom-up research capabilities as it aims to deliver returns above a passive index.

Potential diversification benefits

Unlike conventional stocks and bonds, inflation-related assets tend to have a positive correlation, or tendency to move in lockstep, with inflation. Including them in a portfolio may therefore enhance diversification while helping to hedge inflation risk. Diversification does not assure a profit or protect against loss.

Explicit tail risk hedging

In a global economy that is likely to experience continued periods of market stress, PIMCO believes that tail risk hedging is essential for preserving and enhancing long-term portfolio returns. To that end, the fund employs an array of strategies designed to help limit losses during large and unanticipated market downturns.

Our Expertise

The fund is managed by veteran investors Mihir Worah, CIO Real Return and Asset Allocation and head of the real return and multi-asset portfolio management teams, Nicholas Johnson, executive vice president who focuses on commodities and multi-asset portfolios, and Stephen Rodosky, managing director who focuses on U.S. long duration strategies. PIMCO, one of the largest U.S. investors in TIPS and a leading global commodities manager, has been managing real return portfolios for nearly two decades.

PRIMARY BENCHMARK

45% Bloomberg Barclays U.S. TIPS Index, 20% Bloomberg Commodity Index Total Return, 15% JPMorgan Emerging Local Markets Index Plus (Unhedged), 10% Dow Jones U.S. Select REIT Total Return Index, 10% Bloomberg Gold Subindex Total Return Index

PRIMARY BENCHMARK DESCRIPTION

The benchmark is a blend of 45% Bloomberg Barclays U.S. TIPS Index, 20% Bloomberg Commodity Index Total Return, 15% JPMorgan Emerging Local Markets Index Plus (Unhedged), 10% Dow Jones U.S. Select REIT Total Return Index, 10% Bloomberg Gold Subindex Total Return Index. Bloomberg Barclays U.S. TIPS Index is an unmanaged market index comprised of all U.S. Treasury Inflation-Protected Securities rated investment grade (Baa3 or better), have at least one year to final maturity, and at least $500 million par amount outstanding. Performance data for this index prior to October 1997 represents returns of the Bloomberg Barclays Inflation Notes Index. Bloomberg Commodity Index Total Return is an unmanaged index composed of futures contracts on a number of physical commodities. The index is designed to be a highly liquid and diversified benchmark for commodities as an asset class. JPMorgan Emerging Local Markets Index Plus (Unhedged) tracks total returns for local-currency-denominated money market instruments in 22 emerging markets countries with at least US$10 billion of external trade. The Dow Jones U.S. Select Real Estate Investment Trust (REIT) Total Return Index is a subset of the Dow Jones Americas Select Real Estate Securities Index (RESI) and includes only REITs and REIT-like securities. The objective of the index is to measure the performance of publicly traded real estate securities. The indexes are designed to serve as proxies for direct real estate investment, in part by excluding companies whose performance may be driven by factors other than the value of real estate. Prior to April 1st, 2009, this index was named Dow Jones Wilshire REIT Total Return Index. Bloomberg Gold Subindex Total Return Index reflects the return on fully collateralized positions in the underlying commodity futures.

DIVIDEND FREQUENCY

Quarterly

SHARE CLASS INCEPTION

08/31/2011

CUSIP

72201W352

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Managers

Steve Rodosky began managing the fund on 9 January 2019.

Mihir P. Worah

CIO Asset Allocation and Real Return