A unique U.S. equity market neutral strategy
The Lipper Award Winning Strategy combines long exposure to Research Affiliates Equity (RAE) Fundamental, a
systematic equity strategy, with an equivalent short position in the S&P 500 Index. This equity-market-neutral
position is complemented by a bond portfolio designed to generate alpha, providing potential for positive
returns with low correlation to the U.S. equity market.
Why Invest In This Fund
Systematically capitalizes on market inefficiencies
RAE Fundamental selects and weights U.S. stocks based
on non-price measures of company size including sales, cash flow, dividends and book value. The strategy
then refines these weights by incorporating active insights into quality, momentum, style and size with the
goal of further enhancing returns. By removing price from the portfolio construction process, the fund aims
to buy low and sell high, outperforming cap-weighted indexes over time.
Advantages of market neutral strategies
EEquity-market-neutral strategies offer investors a lower risk and
lower volatility profile while retaining positive return potential. The strategy targets an equity beta of
approximately zero, helping an investor to hold a hedged equity position with the potential for positive
excess returns. The fund targets a positive total return over a business cycle regardless of general market
direction while remaining broadly diversified and not overly focused on large single stock positions.
Award-winning equity market neutral performance
The fund benefits from exposure to the proprietary RAE
Fundamental strategy and PIMCO’s time-tested approach to managing “PLUS” strategies. The fund’s long
U.S. equity exposure is fully offset by short exposure to the S&P 500. PIMCO has been recognized by Lipper
as Best Group Large Equity multiple times for the consistently strong risk adjusted performance of its equity
PIMCO introduced the groundbreaking StocksPLUS
strategy in 1986 - the same award-winning approach
used across our “PLUS” portfolios - which capitalizes
on the depth and breadth of PIMCO’s global resources.
PIMCO has partnered with Research Affiliates to deliver
systematic equity strategies since 2005. Today, we
manage RAE “PLUS” portfolios across a range of
objectives and market exposures.
3 Month USD LIBOR Index
PRIMARY BENCHMARK DESCRIPTION
The 3 Month USD LIBOR (London Interbank Offered Rate) Index is an average interest rate, determined by the ICE Benchmark Administration, that banks charge one another for the use of short-term money (3 months) in England's Eurodollar market. It is not possible to invest in an unmanaged index.
RAE Fundamental US Large
SECONDARY BENCHMARK DESCRIPTION
The RAE Fundamental US Large portfolio contains stocks of large U.S.-listed companies weighted by the Fundamental Index® methodology with additional factors (e.g., quality of earnings , economic profitability, momentum etc.).
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