What is StocksPLUS® Long Duration?

StocksPLUS Long Duration is an investment strategy that may allow investors to capture the equity risk premium, reduce risk relative to liabilities, and achieve high risk adjusted return potential within a single portfolio. Compared to a traditional equity mandate, StocksPLUS Long Duration may offer a very high correlation of excess returns with liabilities, particularly when liabilities are rising. Further, for those considering extending duration with fixed income derivatives, StocksPLUS Long Duration may offer attractive operational and investment characteristics by capitalizing on PIMCO’s experience managing StocksPLUS since 1986 and Long Duration since 1988.

StocksPLUS Long Duration uses equity index derivatives, typically futures and sometimes swaps, to achieve non-leveraged passive stock market exposure. Because equity index ownership using futures and swaps typically only requires a very modest initial cash outlay, PIMCO invests the remaining cash in an actively managed bond portfolio which references the Barclays Capital Long-Term Government/Credit Bond Index. The goal is to provide equity market returns plus excess returns relative to the equity market which are highly correlated with interest rate sensitive liabilities. Equity exposure is managed with a focus on minimizing the cost associated with equity index futures and swap ownership, typically a money market-based cost. If the actively managed long duration bond portfolio outperforms money market rates, in most cases the StocksPLUS Long Duration strategy should deliver excess returns relative to the equity index.

We offer a variety of domestic, regional and international equity indexes in most developed markets as depicted below. Other indexes, such as emerging markets are currently available. Please feel free to inquire.

PIMCO's StocksPLUS Experience

PIMCO's Long Duration Experience

StocksPLUS Long Duration Investment Philosophy

Long Duration Investment Philosophy

Risk Management / Controls

How To Invest

Related Strategies

Equity

Fixed Income

Enhanced Equity

Related

Disclosures

Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Sovereign securities are generally backed by the issuing 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. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and while generally supported by a government, government-agency or private guarantor there is no assurance that the guarantor will meet its obligations. 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. Real return investments are Inflation-linked bonds (ILBs) which are issued by a government and 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. PIMCO strategies utilize derivatives which 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. Swaps are a type of derivative; while some swaps trade through a clearinghouse there is generally no central exchange or market for swap transactions and therefore they tend to be less liquid than exchange-traded instruments. The credit quality of a particular security or group of securities does not ensure the stability or safety of the overall portfolio. There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. Diversification does not ensure against loss.

The Barclays Capital Long-Term Government/Credit Bond Index is generally representative of long-term government and investment grade corporate debt securities, or fixed rate, non-convertible, investment grade U.S. dollar denominated bonds having maturities of greater than ten years. It is not possible to invest directly in an unmanaged index.

​​​ 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 and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.