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Short-Term Strategies

Is your cash allocation pulling its weight?

Look beyond traditional cash and explore our highly rated short-term solutions, which are backed by 30+ years of investing expertise

PIMCO Short-Term Strategies Brochure

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What role can short-term strategies play in portfolios?

Active short-term bond strategies may offer a more attractive return profile than traditional cash in exchange for a modest increase in risk.

  • Enhance yield potential. With interest rates at historic lows, over-allocations to cash could mean investors have less earning potential.
  • De-risk portfolio. Shortening duration can help reduce interest rate risk and limit overall volatility.
  • Navigate changing rates. Flexibility and a defensive mindset are crucial to finding attractive opportunities at the front-end of the yield curve.
Stepping Out from Cash: A Look at the Risk/Reward Potential of PIMCO’s Short-Duration Strategies

*Short-term investments will be more volatile than traditional cash investments and their value will fluctuate. The investments may also invest a portion of their total assets in junk bonds. Short-term strategies are not federally guaranteed and may lose value.

Why PIMCO for short term?

$123 billion

In dedicated money market, short-term, and low duration strategies (as of 06/30/2022)

$295 billion

In cash-equivalent securities across the firm (as of 06/30/2022)

30+ years

Experience successfully managing short-term strategies

Straight From PIMCO: Time to Be Conscious of Your Cash

Jerome Schneider explains how investors seeking capital preservation may benefit from the additional yield premiums available beyond near-zero-yielding money market funds.

Highly experienced management team and award-winning portfolio managers

Jerome Schneider

Jerome Schneider

Managing Director

Head of Short-Term Portfolio Management

Morningstar Fixed-Income Fund Manager of the Year (2015)

Morningstar Fixed-Income Fund Manager of the Year (2015)

Scott Mather

Scott Mather

Managing Director

CIO U.S. Core Strategies

David Braun

David Braun

Managing Director

Head of US Financial Institutions Portfolio Management

Andrew Wittkop

Andrew T. Wittkop

Executive Vice President

Portfolio Manager, Treasuries, Agencies, Rates

Nathan Chiaverini

Nathan Chiaverini

Senior Vice President

Portfolio Manager, Short-Term Desk

Click on the manager for a list of products managed.

The Market Transition Away From LIBOR

A broad range of market participants from regulators to investors are preparing for the end of the London Interbank Offered Rate (“LIBOR”) as a benchmark for trillions of dollars of financial instruments.

The transition away from LIBOR is a global event impacting all aspects of financial markets (e.g. investments, operations, technology, legal and regulatory) and PIMCO aims to arm clients with the tools and information necessary to navigate these changes.

  • 01What is LIBOR?

    LIBOR is widely used as a floating-rate benchmark index, as a reference rate for a wide range of securities and derivatives worldwide, and also as a signal for market liquidity and changes in financial conditions.

    It is estimated that $223 trillion of financial contracts and securities are tied to USD LIBOR according to the New York Federal Reserve Bank, ARRC.1

    1 As of 31 March 2021

  • 02Why is the market transitioning?

    Concerns regarding the reliability of LIBOR in the wake of bank manipulation of the rate in 2012 prompted regulators to develop alternative “risk-free benchmark” rates supported by more liquid and observable markets.

    PIMCO’s base case assumption is that LIBOR publication will cease June 30, 2023.

  • 03How is PIMCO responding?

    PIMCO is working closely with investors and regulators to navigate this transition. PIMCO is a participant in official sector working groups and will continue to provide input to establish and transition to alternative rates to LIBOR.

  • 04What are the replacement rates?

    The Federal Reserve System established the Alternative Reference Rates Committee (“ARRC”) to lead the transition away from LIBOR. The ARRC selected the Secured Overnight Funding Rate (“SOFR”) as the recommended alternative reference rate for the U.S.

    Similarly, working groups outside of the U.S. have nominated alternative reference rates in their funding currencies.

    Sterling: SONIA

    Swiss Franc: SARON

    Japanese Yen: TONA

    Euro: €STR


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Disclosures

Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus and summary prospectus, if available, which may be obtained by contacting your investment professional or PIMCO representative. Click here for a complete list of the PIMCO Funds prospectuses and summary prospectuses. Please read them carefully before you invest or send money.

Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other PIMCO-advised Fund, including those with a similar name, investment objective or policies. A new or smaller Fund’s performance may not represent how the Fund is expected to or may perform in the long-term. New Funds have limited operating histories for investors to evaluate and new and smaller Funds may not attract sufficient assets to achieve investment and trading efficiencies. A Fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the Fund otherwise would not seek to do so, which may adversely affect performance.

A word about risk:

Investing in the bond market is subject to certain risks including the risk that fixed income securities will decline in value because of changes in interest rates; the risk that fund shares could trade at prices other than the net asset value; and the risk that the manager's investment decisions might not produce the desired results. 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. Mortgage- and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market's perception of issuer creditworthiness; while generally supported by some form of government or private guarantee, there is no assurance that private guarantors will meet their obligations. High-yield, lower-rated, securities involve greater risk than higher-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.; the risk that fund shares could trade at prices other than the net asset value; and the risk that the manager's investment decisions might not produce the desired results. Derivatives 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. Investing in derivatives could lose more than the amount invested. Diversification does not guarantee against loss. A Fund’s ESG investing strategy may select or exclude securities of certain issuers for reasons other than financial performance.  Such strategy carries the risk that the Fund’s performance will differ from similar funds that do not utilize an ESG investing strategy. For example, the application of this strategy could affect the Fund’s exposure to certain sectors or types of investments, which could negatively impact the Fund’s performance. ESG investing is qualitative and subjective by nature, and there is no guarantee that the factors utilized by PIMCO or any judgment exercised by PIMCO will reflect the opinions of any particular investor, and the factors utilized by PIMCO may differ from the factors that any particular investor considers relevant in evaluating an issuer’s ESG practices. In evaluating an issuer, PIMCO is dependent upon information and data obtained through voluntary or third-party reporting that may be incomplete, inaccurate or unavailable, or present conflicting information and data with respect to an issuer, which in each case could cause PIMCO to incorrectly assess an issuer’s business practices with respect to its ESG practices. Socially responsible norms differ by region, and an issuer’s ESG practices or PIMCO’s assessment of an issuer’s ESG practices may change over time. There is no assurance that the ESG investing strategy or techniques employed will be successful. Past performance is not a guarantee or reliable indicator of future results.

Please refer to the Fund's prospectus for a complete overview of the primary risks associated with the Fund.

Exchange Traded Funds (“ETF”) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or “baskets” of shares. Shares of an ETF, traded on the secondary market, are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF’s prospectus.

Different fund types (e.g. ETFs, open-ended investment companies) and fund share classes are subject to different fees and expenses (which may affect performance). They may also have different minimum investment requirements and be entitled to different services.

Current holdings are subject to risk. Holdings are subject to change at any time. An investment in an ETF involves risk, including the loss of principal. Investment return, price, yield and Net Asset Value (NAV) will fluctuate with changes in market conditions. Investments may be worth more or less than the original cost when redeemed.

Buying or selling ETF shares on an exchange may require the payment of fees, such as brokerage commissions, and other fees to financial intermediaries. In addition, an investor may incur costs attributed to the difference between the highest price a buyer is willing to pay to purchase shares of the Fund (bid) and the lowest price a seller is willing to accept for shares of the Fund (ask) when buying or selling shares in the secondary market (the bid-ask spread). Due to the costs inherent in buying or selling Fund shares, frequent trading may detract significantly from investment returns. Investment in Fund shares may not be advisable for investors who expect to engage in frequent trading.

ETF shares may be bought or sold throughout the day at their market price on the exchange on which they are listed. However, there can be no guarantee that an active trading market for PIMCO ETF shares will develop or be maintained, or that their listing will continue or remain unchanged.

Premium/Discount is the difference between the market price and NAV expressed as a percentage of NAV.

PIMCO Enhanced Short Maturity Active ESG Exchange-Traded Fund (EMNT) is an actively managed exchange-traded fund (ETF) that seeks maximum current income, consistent with preservation of capital and daily liquidity, while incorporating PIMCO s environmental-, social- and governance-oriented (ESG) investment strategy. [1]EMNT will primarily invest in short duration investment grade debt securities, and will disclose all portfolio holdings on a daily basis. The average portfolio duration of EMNT will vary based on PIMCO s economic forecasts and active investment process decisions, and will not normally exceed one year. Please see the Fund’s prospectus for more detailed information related to its investment objectives, investment strategies and approach to ESG.

[1] The Fund considers ESG factors to choose securities that comprise the fund and to proactively engage with issuers to realize ESG-objectives. Environmental (“E”) factors can include matters such as climate change, pollution, waste, and how an issuer protects and/or conserves natural resources.  Social (“S”) factors can include how an issuer manages its relationships with individuals, such as its employees, shareholders, customers and its community.  Governance (“G”) factors can include how an issuer operates, such as its leadership, pay and incentive structures, internal controls, and the rights of equity and debt holders.

Monthly Morningstar Rating™ is for the Institutional share class only; other classes may have different performance characteristics. The PIMCO Short-Term Fund was rated against the following numbers of Ultrashort Bond funds over the following time periods: Overall 5 Stars (215 funds rated); 3 Yrs. 4 Stars (215 funds rated); 5 Yrs. 4 Stars (178 funds rated); 10 Yrs. 5 Stars (94 funds rated). The PIMCO Short Asset Investment Fund was rated against the following numbers of Ultrashort Bond funds over the following time periods: Overall 3 Stars (215 funds rated); 3 Yrs. 2 Stars (215 funds rated); 5 Yrs. 3 Stars (178 funds rated); 10 Yrs. 4 Stars (94 funds rated). The PIMCO Enhanced Short Maturity Active Exchange-Traded Fund was rated against the following numbers of Ultrashort Bond funds over the following time periods: Overall 3 Stars (215 funds rated); 3 Yrs. 2 Stars (215 funds rated); 5 Yrs. 3 Stars (178 funds rated); 10 Yrs. 4 Stars (94 funds rated). The PIMCO Enhanced Low Duration Active Exchange-Traded Fund was rated against the following numbers of Short-Term Bond funds over the following time periods: Overall 4 Stars (550 funds rated); 3 Yrs. 4 Stars (550 funds rated); 5 Yrs. 4 Stars (487 funds rated).

A rating is not a recommendation to buy, sell or hold a fund. © 2022 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Past performance is no guarantee of future results.

The Morningstar Fixed Income Fund Manager of the Year award (U.S.) is based on the strength of the manager, performance, strategy and firm's stewardship.

The Morningstar Analyst RatingTM is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five-pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark over the long term on a risk adjusted basis. They consider quantitative and qualitative factors in their research. For actively managed strategies, people and process each receive a 45% weighting in their analysis, while parent receives a 10% weighting. For passive strategies, process receives an 80% weighting, while people and parent each receive a 10% weighting. For both active and passive strategies, performance has no explicit weight as it is incorporated into the analysis of people and process; price at the share-class level (where applicable) is directly subtracted from an expected gross alpha estimate derived from the analysis of the other pillars. The impact of the weighted pillar scores for people, process and parent on the final Analyst Rating is further modified by a measure of the dispersion of historical alphas among relevant peers. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, the modification by alpha dispersion is not used.

The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. For active funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that an active fund will be able to deliver positive alpha net of fees relative to the standard benchmark index assigned to the Morningstar category. The level of the rating relates to the level of expected positive net alpha relative to Morningstar category peers for active funds. For passive funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will be able to deliver a higher alpha net of fees than the lesser of the relevant Morningstar category median or 0. The level of the rating relates to the level of expected net alpha relative to Morningstar category peers for passive funds. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will deliver a weighted pillar score above a predetermined threshold within its peer group. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months.

For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to https://shareholders.morningstar.com/investor-relations/governance/Compliance--Disclosure/default.aspx.

The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause the Manager Research Group’s expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.

There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market.

PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. 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. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2022, PIMCO

PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY 10019, is a company of PIMCO.

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