Real Return Fund

PRRIX

Updated April 23, 2019

Objective

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

Primary Portfolio

Inflation-indexed bonds

Overview

Fund Overview

Help protect long-term purchasing power

Inflation often appears quickly and unexpectedly, making it important for long-term investors to be prepared in all market environments. The fund aims to help investors protect their purchasing power against the effects of inflation by seeking real (inflation-adjusted) returns primarily from Treasury Inflation-Protected Securities (TIPS).

Why Invest In This Fund

A high quality inflation hedge

Active management has helped the fund deliver short- and long-term returns solidly ahead of inflation, while the portfolio’s investment-grade orientation has provided a smoother ride than other real return assets such as commodities and real estate.

Potential diversification benefits

While traditional asset classes such as stocks and bonds usually move inversely to inflation, TIPS tend to move in the same direction as inflation. Investing in assets with low correlations to one another, i.e., assets influenced by different factors, may help enhance a portfolio’s diversification, potentially lowering overall volatility. TIPS can decline in value if interest rates rise, and may be particularly sensitive if real interest rates rise rapidly.

PIMCO’s expertise

By drawing on the expertise of our global portfolio management team, 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.

Our Expertise

The strategy 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 and Stephen Rodosky. PIMCO, a leading global manager in inflation-related assets, launched its first enhanced index strategy more than two decades ago and its first real estate-linked strategy in 2002.

PRIMARY BENCHMARK

Bloomberg Barclays U.S. TIPS Index

PRIMARY BENCHMARK DESCRIPTION

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. It is not possible to invest directly in an unmanaged index.

SECONDARY BENCHMARK

Consumer Price Index (Seasonally Adjusted)

SECONDARY BENCHMARK DESCRIPTION

The Consumer Price Index is an unmanaged index representing the rate of inflation of the U.S. consumer prices as determined by the U.S. Bureau of Labor Statistics. There can be no guarantee that the CPI or other indexes will reflect the exact level of inflation at any given time. It is not possible to invest directly in an unmanaged index. This index reflects seasonally adjusted returns.

DIVIDEND FREQUENCY

Monthly with Daily Accrual

SHARE CLASS INCEPTION

01/29/1997

CUSIP

693391104

RELATED

We see two overarching reasons for long-term investors to consider continuing to hold a strategic allocation to EM equities: fundamentals and valuations.

Read More