RAE Low Volatility PLUS Fund

PILVX

Updated October 22, 2019

Objective

Seeks total return which exceeds that of its benchmark

Primary Portfolio

An equity strategy that uses RAE Low Volatility US portfolio derivatives backed by an actively managed portfolio of fixed income securities with an absolute return orientation

Overview

Fund Overview

Systematic, low-volatility approach to U.S. equity investing

The fund invests in a diversified portfolio that seeks to capture the returns of less volatile and potentially higher yielding U.S. stocks, using the Research Affiliates Equity (RAE) Low Volatility investment strategy, a systematic approach designed to outperform the S&P 500 Index, plus an additional source of return potential.

Why Invest In This Fund

Offers benefits of low volatility investing while being conscious of valuations

Proprietary screens that emphasize lower volatility stocks with higher yields and strong financial health are applied to each sector of the U.S. market. Going beyond simple volatility screens, the fund’s value orientation and focus on diversification may help investors avoid owning expensive low volatility stocks. The RAE methodology then weights stocks based on non-price measures of company size including sales, cash flow, dividends and book value

U.S. equity investing with the potential for a smoother ride

Investors may experience periods of high volatility when investing in the stock market, yet most accept that risk in exchange for the long-term capital appreciation potential of U.S. stocks. A key tenet of the fund’s risk-oriented approach is to manage shortterm risk with respect to volatility.

Offers additional sources of potential returns

The fund provides an additional source of alpha potential by employing PIMCO’s “PLUS” implementation to equity investing. Because the fund uses equity-linked instruments, which do not require the same cash outlay as physical stocks, it seeks to generate incremental return by investi