What is StocksPLUS® Absolute Return?
StocksPLUS Absolute Return is an innovative equity strategy that capitalizes on long-term investor horizons and PIMCO’s two decades of experience managing StocksPLUS and 40+ years of experience of actively managing fixed income portfolios. The goal of StocksPLUS Absolute Return is to consistently deliver attractive excess returns relative to a given equity index over three- to five-year time horizons.

The StocksPLUS Absolute Return strategy uses equity index futures and sometimes swaps to achieve non-leveraged passive stock market exposure thereby eliminating the risk of underperformance due to adverse stock selection relative to the index. As equity index ownership using futures and swaps typically only requires a very modest initial cash outlay, PIMCO invests the remaining cash in an actively managed absolute return style fixed income portfolio with the goal of outperforming the money market interest rate cost typically associated with equity index futures and swap ownership. If the underlying fixed income portfolio outperforms money market rates, in most cases the StocksPLUS Absolute Return strategy should deliver before fee excess returns.

We offer a variety of domestic, regional and international equity indexes in most developed markets as depicted below. Other indexes, such as emerging markets, may be considered, please feel free to inquire.

PIMCO's StocksPLUS Experience

StocksPLUS Absolute Return Investment Philosophy

Applications for StocksPLUS Absolute Return


Past performance is not a guarantee or a reliable indicator of future results. In managing the strategy’s investments in Fixed Income Instruments, PIMCO utilizes an absolute return approach; the absolute return approach does not apply to the equity index replicating component of the strategy. All investments contain risk and may lose value. Absolute return portfolios may not necessarily fully participate in strong (positive) market rallies. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Equities may decline in value due to both real and perceived general market, economic and industry conditions. Sovereign securities are generally backed by the issuing government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and while generally supported by a government, government-agency or private guarantor there is no assurance that the guarantor will meet its obligations. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. PIMCO strategies utilize derivatives which may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Swaps are a type of derivative; while some swaps trade through a clearinghouse there is generally no central exchange or market for swap transactions and therefore they tend to be less liquid than exchange-traded instruments. There is no central exchange or market for swap transactions and therefore they are less liquid than exchange-traded instruments. Investing in derivatives could lose more than the amount invested. There is no guarantee that this investment strategy will work under all market conditions and each investor should evaluate their ability to invest for a long-term especially during periods of downturn in the market. Diversification does not ensure against loss. Please consult your tax and/or legal counsel for specific tax questions and concerns.

The correlation of various indices or securities against one another or against inflation is based upon data over a certain time period. These correlations may vary substantially in the future or over different time periods that can result in greater volatility.

This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.