Moderate Duration Fund

PMDRX

Updated August 21, 2019

Objective

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

Primary Portfolio

Short- and intermediate-term fixed income securities

Overview

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.

PRIMARY BENCHMARK

Bloomberg Barclays Intermediate Government/Credit Index

PRIMARY BENCHMARK DESCRIPTION

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.

DIVIDEND FREQUENCY

Monthly with Daily Accrual

SHARE CLASS INCEPTION

12/31/1996

CUSIP

693390593

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Managers

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