Tax Managed Real Return Fund


Updated Oct 8, 2015


    Real Asset
    $49 MM
    (as of 09/30/2015)
    $49 MM
    (as of 09/30/2015)
    Real Asset


Seeks to provide after-tax inflation-protected return, consistent with prudent investment management

Primary Portfolio

Intermediate-term, investment grade bonds.


Please note that this fund will be liquidated on or about 30 October 2015.

Fund Overview

Help protect long-term purchasing power, tax efficiently

Inflation and taxes can be a double threat to many investors. This fund presents a high quality solution to investors concerned about both high taxes and dwindling purchasing power.

Why Invest In This Fund

A more tax efficient construct with high quality tools

This actively managed fund invests primarily in high quality municipal bonds, which offer income that is generally exempt from federal income tax, and in some cases, state income tax. It also seeks to avoid bonds subject to the AMT (alternative minimum tax). Investors may still incur tax liabilities and should consult with a tax professional for specific advice.

Designed to be an inflation hedge

The fund complements its municipal bond exposure with an "overlay" of inflation-indexed securities that enable the fund to receive higher payments when inflation rises. This may involve swaps that carry certain costs, deflation risk and counterparty risk. Rising rates may negatively impact bond funds and cause bonds to decrease in value.

Time-tested expertise

PIMCO, one of the world’s leading asset managers, has extensive experience managing both municipal bond portfolios and real return strategies.

Our Expertise

The fund is jointly managed by Joe Deane and Jeremie Banet. Mr. Deane is the lead portfolio manager and is responsible for the fund’s municipal bond investments. Mr. Banet is responsible for the fund’s investments in inflation hedging strategies. PIMCO’s time-tested investment process and our portfolio managers’ expertise may give this fund a distinct edge in navigating the municipal bond and inflation-indexed securities markets.


Barclays Municipal Bond 1-10 Year Blend (1-12) Index


Barclays Municipal Bond 1-10 Year Blend (1-12) Index is the 1-10 Year Blend (1-12) component of the Barclays Municipal Bond Index, which consists of a broad selection of investment-grade general obligation bonds and revenue bonds of maturities ranging from one year to 22 years. It is an unmanaged index representative of the tax-exempt bond market. The index is made up of all investment grade municipal bonds issued after 12/31/90 having a remaining maturity of at least one year. It is not possible to invest directly in an unmanaged index.


Monthly with Daily Accrual






Joseph Deane

Head of Municipal Bond Portfolio Management

View Profile

Jeremie Banet

Portfolio Manager, Real Return

View Profile

Yields & Distributions

Historical Prices & Distributions

Distribution Yield (At NAV)1 as of 9/30/2015 2.18%
30 - Day SEC Yield2 as of 9/30/2015 1.22%
30 - Day SEC Yield2 as of 10/8/2015 1.17%
Latest Dividend Distribution ($ Share)3 as of 9/30/2015 $0.017507624
Dividend Distribution (YTD)4 as of 9/30/2015 $0.129412314
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 0.45%

Prices & Performance

Daily Statistics

All data as of 10/8/2015

NAV $9.86 One Day Return 0.21%
Daily Change $0.02 Daily YTD Return -0.37%
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 10/30/2009 to 9/30/2015 = $11,009

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.
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 32.85
1-3 yrs 10.93
3-5 yrs 23.04
5-10 yrs 26.82
10-20 yrs 6.37
20+ yrs 0.00
Effective Maturity (yrs) 3.87

Duration in Years

Effective Duration (yrs) 3.47

Risk Characteristics
(Trailing 3 Years)

Standard Deviation 3.56
Sharpe Ratio5 -0.33
Information Ratio6 -1.28
Tracking Error7 2.46

Sector Allocation Market Value %

State/Local GO 15.58
Pre-Refunded 1.99
Education Rev. 11.15
Hospital Rev. 7.44
Housing Rev. 0.00
Ind Dev/Pollution Ctrl 3.62
Lease Rev. 4.90
Power Rev. 4.77
Resource Recovery 0.00
Special Tax 12.56
Transportation 10.49
Water & Sewer 9.22
Tobacco 1.93
Net Other Short Duration Instruments Muni 3.73
Other Muni 0.00
US Government Related8 -4.56
Mortgage 0.00
Invest. Grade Credit 0.00
High Yield Credit 0.00
Non-USD Developed 0.00
Emerging Markets9 0.00
Other10 0.00
Net Other Short Duration Instruments ex-Muni 17.15
Portfolio Composition Footnotes & Disclosures


5The 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.
6The 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.
7Tracking error, a measure of risk, is defined as the standard deviation of the portfolio's excess return vs. the benchmark expressed in percent.
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.
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:

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. 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. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax. 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. 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. Please consult your tax and/or legal counsel for specific tax questions and concerns. 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.