CommodityRealReturn Strategy Fund


Updated November 25, 2015


Seeks maximum real return, consistent with prudent investment management

Primary Portfolio

Commodity Index-linked derivative instruments backed by a portfolio of inflation-indexed bonds and other fixed income securities


Important Fund Event: Reverse Split
On August 7, 2015, the fund performed a reverse share split. The reverse split reduced the number of shares owned and proportionately increased the price per share. The increased price per share is reflected in the “Daily Change” value as of 8/7/2015. For a helpful Q&A on the reverse share split, click here.

Fund Overview

Bolster inflation-fighting potential

Harnessing PIMCO’s innovative Double Real® approach, the fund offers broad participation in commodity-linked investing, with enhanced return potential from Treasury Inflation-Protected Securities (TIPS).

Why Invest In This Fund

A Double Real index strategy

The fund captures the performance potential of commodities through derivative exposure to the broad-based Bloomberg Commodity Index*. The fund collateralizes this exposure with a portfolio of TIPS that serve as an additional source of return and inflation hedge. However, TIPS may decline in value if interest rates rise, and may be particularly sensitive if real interest rates rise rapidly.

Inflation-hedging, diversification potential

Commodities have had a positive correlation with inflation, typically appreciating when inflation spikes; they also have had low or negative correlation with stocks and bonds, which can enhance portfolio diversification. It should be noted that commodities may be volatile and that diversification doesn’t protect against loss.

Combined expertise

The fund maximizes PIMCO’s experience in commodity-linked portfolios and TIPS. The management team looks to add value by avoiding the inefficiencies of passive commodity indexing, seeking out additional excess return opportunities within commodity markets, and actively managing the collateral portfolio.

Our Expertise

The strategy is managed by veteran real return investors Mihir Worah, CIO Real Return and Asset Allocation and head of the real return and multi-asset portfolio management teams, Nicholas Johnson and Jeremie Banet. A leading global commodities manager, PIMCO launched its first enhanced index strategy two decades ago and its first commodity-linked strategy in 2002.


Bloomberg Commodity Index Total Return


Bloomberg Commodity Index Total Return is an unmanaged index composed of futures contracts on 20 physical commodities. The index is designed to be a highly liquid and diversified benchmark for commodities as an asset class. It is not possible to invest directly in an unmanaged index.









Mihir P. Worah

CIO Asset Allocation and Real Return

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Jeremie Banet

Portfolio Manager, Real Return

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Nicholas J. Johnson

Porfolio Manager, Commodities

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Yields & Distributions

Historical Prices & Distributions

Distribution Yield (At NAV) 1 as of 09/30/2015 3.38%
30 - Day SEC Yield2 as of 10/31/2015 -1.09%
30 - Day SEC Yield2 as of 11/25/2015 -
Latest Dividend Distribution ($ Share)3 as of 09/17/2015 $0.14353
Dividend Distribution (YTD) 4 as of 09/17/2015 $0.20452
Yields & Distributions Footnotes & Disclosures


1The distribution yield for monthly paying Funds is calculated by annualizing actual dividends distributed for the monthly period ended on the date shown and dividing by the net asset value on the last business day for the same period. The distribution yield for quarterly paying Funds is calculated by taking the average of the prior four quarterly distribution yields. The quarterly distribution yields are calculated by annualizing actual dividends distributed for the quarterly period ended on the most recent quarterly distribution date and dividing by the net asset value for the same date. The distribution yield for annual paying Funds is calculated by taking the annual distribution divided by the Fund’s net asset value on ex-date. The yield is annualized if the Fund incepted less than a year ago. The yield does not include long- or short-term capital gains distributions.
2The 30-Day SEC yield is an annualized yield based on the most recent 30 day period.
3Data does not include special cash dividends.
4Data is based on distributions since the most recent calendar year end and does not include special cash dividends.
The SEC yield is an annualized yield based on the most recent 30 day period. The fund’s yield quotation includes an adjustment to the principal value of the TIPS securities to reflect changes in the government’s official inflation rate, if any; changes in the government’s official inflation rate can cause the fund’s yield to vary substantially from one month to the next. At times, including during periods of deflation, the SEC yield calculation may result in a negative number. If the current 30-day SEC yield is denoted with a “‡,” we believe it is attributable to a rise in the inflation rate, and might not be repeated. Due to the consolidation of operations and permanence of the fund’s fee waivers, such waivers do not materially affect the fund’s SEC yield.
Unless stated, the Fund does not have an unsubsidized yield.

Fees & Expenses

Total Annual Operating Expenses 0.94%
Net Operating Expenses5 0.79%
Net Operating Expenses Ex-interest6 0.74%
Fees & Expenses Footnotes & Disclosures


5The net expense ratio reflects a contractual expense reduction agreement so long as a contract with a PIMCO subsidiary is in place.
6Ex-interest expenses reflect the accounting treatment of certain investments (e.g., reverse repurchase agreements) but do not reflect actual expenses paid to PIMCO.

Prices & Performance

Important Fund Event: Reverse Split
On August 7, 2015, the fund performed a reverse share split. The reverse split reduced the number of shares owned and proportionately increased the price per share. The increased price per share is reflected in the “Daily Change” value as of 8/7/2015. For a helpful Q&A on the reverse share split, click here. Morningstar Hypo Tool

Daily Statistics

All data as of 11/25/2015

NAV $6.76 One Day Return -0.15%
Daily Change $-0.01 Daily YTD Return -21.99%
Click here to view Historical Prices
  • Average Annual Returns
  • Cumulative Returns

All data as of

  • Daily
  • Month End
  • Quarter End

All data as of

  • Daily
  • Month End
  • Quarter End
Performance quoted represents past performance and is not a guarantee or a reliable indicator of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than average annual returns shown. Performance quoted does not reflect any sales charges, if applicable, and performance would be lower if it did.

Calendar Year Returns %

All data as of

Growth of $10,000 (hypothetical)

Since inception 06/28/2002 to 10/31/2015 = $15,109

Morningstar and Lipper

  • Morningstar Ratings
  • Lipper Rankings
Prices & Performance Footnotes & Disclosures


Performance figures presented reflect the total return performance after fees and reflect changes in share price and reinvestment of dividend and capital gain distributions on the payable date. All periods longer than one year are annualized.
Total return performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The minimum initial investment for Institutional class shares is $1 million; however, it may be modified for certain financial intermediaries who submit trades on behalf of eligible investors.
Daily YTD return is from the most recent calendar year end.
Growth of $10,000 is calculated at NAV and assumes that all dividend and capital gain distributions were reinvested. It does not take into account sales charges or the effect of taxes. Results are not indicative of future performance.
Past performance is not a guarantee or a reliable indicator of future results. For funds with at least a 3-yr history, Morningstar calculates a Morningstar Rating based on a risk-adjusted return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads and redemption fees) with an emphasis on downward variations and consistent performance. The top 10% of funds in each 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 is a weighted average of the performance figures for its 3-, 5- and 10-yr (if applicable) Morningstar Rating metrics. Morningstar, Inc.® 2015. All rights reserved. The information contained herein; (1) is proprietary to Morningstar and/or its affiliates; (2) may not be copied or distributed; (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. Past performance is no guarantee of future results. Hollow stars represent a class of shares with inception dates that is different than the inception date of the fund. For the period prior to the inception date of these shares, performance information is based on the performance of the fund’s Institutional Class shares, adjusted to reflect the actual distribution and/or service (12b-1) fees and other expenses paid by the newer share class.
The Lipper Category returns and rankings are calculated by Lipper Inc., a Reuters Company, which is a nationally recognized organization that compares the performance of mutual funds with similar investment objectives. The Category returns represent the average performance of included funds, while rankings compare an individual fund's returns to those of the other funds in its category. Both are based on total return performance, with capital gains and dividends reinvested, with annual operating expenses deducted, but without including front- or back-end sales charges. Rankings begin with the actual share class inception. Rankings are relative to a peer group and do not necessarily mean that the fund had high total returns.

Portfolio Composition

All data as of unless otherwise stated

Maturity %

0-1 yrs -0.61
1-3 yrs 41.01
3-5 yrs 34.10
5-10 yrs 46.45
10-20 yrs -16.67
20+ yrs -4.29
Effective Maturity (yrs) 2.92

Duration in Years

Effective Duration (yrs) 2.62

Sector Allocation
Duration in Years

Inflation Linked Bonds
United States 4.31
United Kingdom 0.44
Europe 0.17
Canada 0.00
Other7 0.20
Other Short Duration Instruments 0.04
Non Inflation Linked Bonds
US Government Related8 -1.54
Mortgage 0.05
Invest. Grade Credit 0.11
High Yield Credit 0.01
Non-U.S. Developed -1.16
Emerging Markets9 0.09
EM Short Duration Instruments -0.01
Municipal 0.00
Other7 0.01
Net Other Short Duration Instruments10 -0.11

Risk Characteristics
(Trailing 3 Years)

Standard Deviation 13.74
Sharpe Ratio11 -1.29
Information Ratio12 -0.58
Tracking Error13 3.86
Portfolio Composition Footnotes & Disclosures


7May include municipals, convertibles, preferreds, and yankee bonds.
8May include nominal and inflation-protected Treasuries, Treasury futures and options, agencies, FDIC-guaranteed and government-guaranteed corporate securities, and interest rate swaps.
9Short duration emerging markets instruments includes an emerging market security or other instrument economically tied to an emerging market country by country of risk with an effective duration less than one year and rated investment grade or higher or if unrated, determined to be similar quality by PIMCO. Emerging Markets includes the value of short duration emerging markets instruments previously reported in another category.
10Net Other Short Duration Instruments includes securities and other instruments (except instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives (for example Eurodollar futures) and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position which in certain instances may exceed the actual amount owed on such positions.
11The Sharpe Ratio measures the risk-adjusted performance. The risk-free rate is subtracted from the rate of return for a portfolio and the result is divided by the standard deviation of the portfolio returns.
12The information ratio is defined as the portfolio's excess return per unit of risk, or tracking error. For example, an information ratio of 1 means that a portfolio manager generates 100 basis points, or one percent of excess return for every 100 basis points of risk taken.
13Tracking error, a measure of risk, is defined as the standard deviation of the portfolio's excess return vs. the benchmark expressed in percent.
Portfolio information in the charts is based on the fund's net assets. These percentages may differ from those used for the fund's compliance calculations, including the fund's prospectus, regulatory, and other investment limitations and policies, which may be based on total assets of the fund or other measurements, may include or exclude various categories of investments from those covered in the portfolio allocation categories shown in this report, and may be based on different classifications and measurements of the fund’s investments and other criteria.
References to specific sectors, securities or issuers are for illustrative purposes only. All holdings are subject to change daily. All share classes have the same portfolio but different expenses.
Duration is a measure of a portfolio’s price sensitivity expressed in years. Effective duration is the duration for a bond with an embedded option when the value is calculated to include the expected change in cash flow caused by the option as interest rates change.


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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.

A word about risk:

Commodities contain heightened risk including market, political, regulatory, and natural conditions, and may not be suitable for all investors. The fund will seek exposure to commodities through commodity-linked derivatives and through the PIMCO Cayman Commodity Fund I Ltd., a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the “Subsidiary”). The Subsidiary is advised by PIMCO, and has the same investment objective as the Fund. The Subsidiary (unlike the Fund) may invest without limitation in commodity-linked swap agreements and other commodity-linked derivative instruments. Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and the current low interest rate environment increases this risk. Current reductions in bond counterparty capacity may contribute to 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 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. Inflation-linked bonds (ILBs) issued by a government are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Certain U.S. Government securities are backed by the full faith of the 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. 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. 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. Derivatives and commodity-linked 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. Commodity-linked derivative instruments may involve additional costs and risks such as changes in commodity index volatility or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Investing in derivatives could lose more than the amount invested. Diversification does not ensure against loss.
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. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.
PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY 10019, is a company of PIMCO.