Time-tested, smart beta approach to U.S. equity investing
The fund invests in a diversified portfolio that captures the returns of U.S. stocks using the Research Affiliates Equity (RAE) Fundamental investment strategy – a systematic approach designed to outperform the S&P 500 Index ¬– plus an additional source of return potential.
Why Invest In This Fund
Systematically capitalizes on market inefficiencies
RAE Fundamental selects and weights U.S. stocks based on non-price measures of company size including sales, cash flows, book value and dividends. By removing price from the portfolio construction process the fund aims to outperform cap-weighted indexes by breaking the link between stock price and portfolio weight. In addition, the fund incorporates the portfolio managers’ active insights into quality, momentum, size and style with the goal of further enhancing returns.
Offers the benefits of traditional passive and active equity investing
The fund’s unique smart beta approach gives it the ability to retain key attributes of passive investing, including broad diversification, while also seeking market outperformance. The fund provides an additional source of alpha potential by employing PIMCO’s “PLUS” implementation to equity investing. Because the fund uses equity-linked instruments, which do not require the same cash outlay as physical stocks, it seeks to generate incremental return by investing the remaining cash in actively managed fixed income.
Award-winning equity performance
The fund benefits from exposure to the proprietary RAE Fundamental strategy and PIMCO’s time-tested approach to managing “PLUS” strategies, whereby the fund invests in equity linked instruments alongside a complementary alpha-generating bond portfolio. PIMCO has been recognized by Lipper as Best Group Large Equity multiple times for the consistently strong risk-adjusted performance of its equity “PLUS” strategies.
PIMCO helped pioneer the innovative StocksPLUS strategy in 1986 – the same award-winning approach used across our “PLUS” portfolios, which capitalizes on the depth and breadth of PIMCO’s global resources. PIMCO has partnered with Research Affiliates since 2005 when they introduced fundamental indexes to the marketplace. Research Affiliates is broadly credited as being pioneers in smart beta. Today, we manage RAE “PLUS” portfolios across a range of objectives and market exposures.
S&P 500 Index
PRIMARY BENCHMARK DESCRIPTION
S&P 500 Index is an unmanaged market index generally considered representative of the stock market as a whole. The Index focuses on the large-cap segment of the U.S. equities market. It is not possible to invest directly in an unmanaged index.
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