RAE Worldwide Long/Short PLUS Strategy

Strategy Overview

An innovative global equity long/short strategy

Harnessing the core strengths of both PIMCO and Research Affiliates, the strategy offers the potential for attractive equity-like returns over the long term with substantially lower downside risk through a unique combination of active management insights, structurally-based return sources, risk management processes and diversification benefits.


A Word About Risk:In managing the strategy’s investments in Fixed Income Instruments, PIMCO utilizes an absolute return approach; the absolute returnapproach does not apply to the equity index replicating component of the strategy. Absolute return portfolios may not fully participate in strong positivemarket rallies. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, andeconomic and political risks, which may be enhanced in emerging markets. Investing in the bond market is subject to risks, includingmarket, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interestrates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fallas interest rates rise, and the current low interest rate environment increases this risk. Current reductions in bond counterparty capacity may contributeto decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value mayfluctuate in response to the market’s perception of issuer creditworthiness; while generally supported by some form of government or private guaranteethere is no assurance that private guarantors will meet their obligations. High-yield, lower-rated, securities involve greater risk thanhigher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not.Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a positioncould not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. Diversification does not ensure againstloss.

Alpha is a measure of performance on a risk-adjusted basis calculated by comparing the volatility (price risk) of a portfolio vs. its risk-adjustedperformance to a benchmark index; the excess return relative to the benchmark is alpha. Beta is a measure of price sensitivity to market movements. Marketbeta is 1