Newport Beach, California (September 6, 2017) – PIMCO, a leading global investment management firm, announces the launch of three smart beta equity ETFs designed to provide investors with diversified exposure to multiple equity factors, including value, quality, low volatility, momentum and size. The ETFs are benchmarked to the Research Affiliates’ RAFI Dynamic Multi-Factor indexes, which employ an innovative and dynamic factor weighting methodology in an effort to generate attractive returns for clients.
The three ETFS are:
- PIMCO RAFI Dynamic Multi-Factor U.S. Equity ETF (Ticker: MFUS)
- PIMCO RAFI Dynamic Multi-Factor International Equity ETF (Ticker: MFDX)
- PIMCO RAFI Dynamic Multi-Factor Emerging Markets Equity ETF (Ticker: MFEM)
“PIMCO is excited to partner with Research Affiliates in offering the PIMCO RAFI Dynamic Multi-Factor Equity ETFs,” said Andrew Pyne, Executive Vice President and strategist focused on PIMCO’s equity solutions. “These ETFs help investors overcome the challenge of determining which factors to include and at what weighting. By dynamically adjusting factor allocations in an ever-changing market, PIMCO RAFI Dynamic Multi-Factor Equity ETFs offer a compelling solution for clients navigating an increasingly disparate smart beta and factor landscape.”
In a low return environment, investors are looking for strategies that can potentially generate above-market returns in the years ahead. The research and theory backing the RAFI indexes support that the five equity factors – value, quality, low volatility, momentum and size – have the potential to outperform the broader equity market over the long term.
PIMCO RAFI Dynamic Multi-Factor ETFs seek to deemphasize the factors that are expensive compared to historical norms while emphasizing those that are undervalued, thereby introducing a buy-low, sell-high discipline in the factor investing world. Moreover, the PIMCO RAFI ETFs incorporate fundamental indexing, which weights stocks by economic size, rather than by market capitalization, which can skew weightings toward stocks already trading at high valuations.
Rob Arnott, Chairman and Chief Executive Officer of Research Affiliates said: “The new PIMCO RAFI Dynamic Multi-Factor ETFs marry multi-factor investing with a true1 smart beta strategy, Fundamental Index, thereby providing two alpha engines in a single package. I’m proud to be affiliating with PIMCO to offer products that reflect these powerful insights.”
PIMCO is a leading global investment management firm, with offices in 11 countries throughout North America, Europe and Asia. Founded in 1971, PIMCO offers a wide range of innovative solutions to help millions of investors worldwide meet their needs. Our goal is to provide attractive returns while maintaining a strong culture of risk management and long-term discipline. PIMCO is owned by Allianz S.E., a leading global diversified financial services provider.
About RAFI Indices
RAFI Indices, LLC, is a California limited liability company established in 2016, which is a wholly owned subsidiary of Research Affiliates Global Holdings, LLC. RAFI Indices, LLC, constructs, publishes, and licenses various indices and does not offer or provide investment advice or offer or sell any securities, commodities, or derivative instruments or products. The RAFI trademark is used under license by RAFI Indices, LLC. The RAFI Indices, LLC, corporate name and all related logos are the exclusive intellectual property of Research Affiliates, LLC.
About Research Affiliates
Research Affiliates, LLC, is a global leader in smart beta and asset allocation. Founded in 2002 and based in Newport Beach, California, Research Affiliates is dedicated to creating value for investors and seeking to have a profound impact on the global investment community through its insights and products. The firm’s investment strategies are built on a strong research base and are led by Rob Arnott and Chris Brightman. Research Affiliates delivers solutions in partnership with some of the world’s leading financial institutions through their offerings of mutual funds, ETFs, separately managed accounts, and/or commingled accounts. As of June 30, 2017, about $184 billion in assets are managed worldwide using investment strategies developed by Research Affiliates.
1 Here we define true smart beta as: a passive, transparent, replicable index that weights stocks based on some metric other than price.