Moderate Duration Fund


Updated October 11, 2019


Seeks maximum total return, consistent with preservation of capital and prudent investment management

Primary Portfolio

Short- and intermediate-term fixed income securities


Fund Overview

An intermediate-term core bond investment

PIMCO Moderate Duration Fund is a core bond fund that provides broad market exposure to high-quality, intermediate-term fixed income securities. The Fund is managed for an overall portfolio duration ranging between two and five years. Following PIMCO’s signature total return philosophy and process, it employs a variety of strategies to enhance return potential and manage overall portfolio risk

Why Invest In This Fund

Modest exposure to interest rate trends

The Fund invests in a diversified portfolio of intermediate-duration bonds, aiming for an overall risk level similar to the Barclays Capital Intermediate Government/Credit Index. Duration is a measure of a security’s price sensitivity to interest rate changes, measured in years; a moderate duration implies greater interest rate sensitivity and return potential than short-duration bonds, but also higher volatility. The Fund can be used as a core holding for investors with a somewhat higher risk tolerance, or as an allocation to position a portfolio for expected interest rate trends.

Value-added active management

We seek to add value through active management of the Fund, employing multiple strategies to avoid having a single strategy dominate returns. The portfolio is well-diversified as well, with flexibility to invest across sectors and issuers. Although the Fund is subject to greater interest rate risk than short-duration funds, it strives to limit this risk by maintaining the portfolio’s duration within a relatively close range around the benchmark’s duration. The Fund employs PIMCO’s total return philosophy, seeking to balance capital appreciation potential and income.

Duration management expertise

PIMCO, a leading fixed income asset manager, combines various measures to assess the interest rate risk to which a longer duration portfolio may be subjected. Our extensive internal modeling addresses duration in its many forms: bull and bear durations (rate shifts of given amounts); total curve durations (changing yield curve shapes); credit spread durations; and mortgage spread and prepayment durations. Our firm-wide macroeconomic outlook, which forecasts the forces likely to impact fixed income markets over the short and long term, likewise helps drive our duration strategies.


Bloomberg Barclays Intermediate Government/Credit Index


Bloomberg Barclays Intermediate Government/Credit Index is an unmanaged index of U.S. Government or Investment Grade Credit Securities having a maturity of at least 1 year and less than 10 years. It is not possible to invest directly in an unmanaged index.


Monthly with Daily Accrual






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Scott A. Mather

CIO U.S. Core Strategies

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Mike Cudzil

Portfolio Manager, Liability-Driven Investment

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Yields & Distributions