RAE Low Volatility PLUS EMG Fund

PLVLX

Updated Jul 29, 2015

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  • DAILY NAV
    $9.03
  • DAILY YTD RETURN
    -6.74%
  • CLASS
    Equities
  • FUND INCEPTION DATE
    12/30/2013
  • TOTAL NET ASSETS
    $4,282 MM
    (as of 06/30/2015)
  • TOTAL NET ASSETS
    $4,282 MM
    (as of 06/30/2015)
  • TICKER
    PLVLX
  • CLASS
    Equities

Objective

Seeks total return which exceeds that of the MSCI Emerging Markets Index

Primary Portfolio

An equity strategy that uses RAE Low Volatility Emerging Markets portfolio derivatives backed by an actively managed portfolio of fixed income securities with an absolute return orientation

Overview

Fund Overview

An innovative approach, combining defensive equity exposure and outperformance potential

The fund provides access to Research Affiliates Equity (RAE) Low Volatility, a fundamentally-weighted, smart beta-based equity strategy that focuses on lower volatility and higher income stocks, plus an additional, complementary source of alpha potential.

Why Invest In This Fund

Smart beta-based equity approach with a lower volatility, higher income emphasis

RAE Low Volatility starts with a process that selects and weights stocks based on non-price measures of size. Proprietary screens are then applied that emphasize lower volatility names with higher incomes and strong financial health to provide the potential for downside risk protection. Additional return and diversification potential is provided by a complementary absolute return bond alpha strategy, which may not fully participate in strong, positive market rallies.

Downside risk reduction potential

Equity portfolio construction is based on the leading smart beta approach, the RAFI Fundamental Index, which selects and weights stocks based on non-price measures of company size. In addition, low volatility, higher income and financial health active insights are incorporated by into the equity portfolio construction process with the objective of achieving superior risk-adjusted returns and reduced downside risk.

Enhanced return potential

As the fund gains full exposure to the RAE Fundamental strategy using equity- linked instruments at a money market-based cost, the goal of the absolute return bond alpha strategy is to outperform this cost – thereby providing the returns of the RAE Fundamental portfolio “PLUS” additional alpha and diversification potential.

Our Expertise

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. Research Affiliates introduced fundamental indexes to the marketplace in 2005 and is broadly recognized as a premier provider of and thought leader behind smart beta. Today, we manage RAE “PLUS” portfolios across a range of objectives and market exposures.

PRIMARY BENCHMARK

MSCI Emerging Markets Index (Net Dividends in USD)

PRIMARY BENCHMARK DESCRIPTION

The MSCI Emerging Markets Index (Net Dividends in USD) Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. It is not possible to invest directly in the index.

DIVIDEND FREQUENCY

Quarterly

SHARE CLASS INCEPTION

12/30/2013

CUSIP

72201U380

Managers

Robert Arnott

Founder and Chairman, Research Affiliates

View Profile

Sudi Mariappa

Portfolio Manager, Generalist

View Profile

Yields & Distributions

Historical Prices & Distributions

Distribution Yield (At NAV)1 as of 6/30/2015 2.61%
30 - Day SEC Yield2 as of 6/30/2015 1.02%
30 - Day SEC Yield2 as of 7/29/2015 -
30 - Day SEC Yield (Unsubsidized)3 as of 6/30/2015 0.87%
Latest Dividend Distribution ($ Share)4 as of 6/18/2015 $0.04759
Dividend Distribution (YTD)5 as of 6/18/2015 $0.04759
Yields & Distributions Footnotes & Disclosures

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.
3Does not include fee waivers and/or reimbursements.
4Data does not include special cash dividends.
5Data is based on distributions since the most recent calendar year end and does not include special cash dividends.

Fees & Expenses

Total Annual Operating Expenses 1.15%
Net Operating Expenses6 1.00%
Fees & Expenses Footnotes & Disclosures

disclosures

6The net expense ratio reflects a contractual expense reduction agreement through 31 July 2015.

Prices & Performance

Daily Statistics

All data as of 7/29/2015

NAV $9.03 One Day Return 0.89%
Daily Change $0.08 Daily YTD Return -6.74%
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 12/30/2013 to 6/30/2015 = $10,029

Morningstar and Lipper

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

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.
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

Regional Diversification - Index
Market Value %7

Asia/Pacific Ex Japan 68.61
EMEA 17.16
Latin America 14.22
North America 0.00
Japan 0.00

Summary Characteristics - Index
Market Value %7

Stocks in Portfolios 824
P/E Ratio (Forward) 12.25
Median Market Cap ($US MM) 8,848.24
P/E Ratio (Trailing) 13.16
Weighted Avg Market Cap ($US MM) 23,572.41

Top 5 GICS Sector - Index
Market Value %7

Financials 28.14
Information Technology 18.07
Consumer Discretionary 8.98
Energy 8.37
Consumer Staples 8.10

Sector Allocation - Duration in Years

US Government Related8 -0.11
Mortgage -0.33
Invest. Grade Credit 0.24
High Yield Credit 0.03
Non-USD Developed -0.18
Emerging Markets9 0.84
Municipal/Other10 0.05
Net Other Short Duration Instruments11 -1.06

Regional Diversification - RAE
Market Value %7

Asia/Pacific Ex Japan 74.14
Latin America 15.57
EMEA 10.29
North America 0.00
Japan 0.00

Summary Characteristics - RAE
Market Value %7

Stocks in Portfolios 144
P/E Ratio (Forward) 12.21
Median Market Cap ($US MM) 9,364.97
P/E Ratio (Trailing) 12.68
Weighted Avg Market Cap ($US MM) 19,532.85

Top 5 GICS Sector - RAE Market Value %7

Financials 24.20
Telecommunication Services 19.09
Energy 16.09
Materials 11.28
Utilities 10.09
Portfolio Composition Footnotes & Disclosures

disclosures

7RAE equity statistics are for the RAE Low Volatility Emerging Markets model portfolio, which the Fund replicated via total return swaps. Cap equity statistics are for the MSCI Emerging Markets Index (Net Dividends in USD), the Fund's benchmark.
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.
10May include municipals, convertibles, preferreds, and yankee bonds.
11Net 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.
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.

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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.
A word about risk:

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. Absolute return portfolios may not fully participate in strong positive market rallies. 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. 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. 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. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Leverage, including borrowing, may cause a portfolio to be more volatile than if the portfolio had not been leveraged. Entering into short sales includes the potential for loss of more money than the actual cost of the investment, and the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the portfolio. 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 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.