Rise Above Rates

Rising Rates and Cash Management

Capital preservation and liquidity are crucial for investors regardless of the direction of interest rates.

Portfolio manager Jerome Schneider explains why in this interest rate cycle, those seeking capital preservation may need to look beyond traditional cash investments.

For investors looking to have a lower volatility profile, PIMCO believes that short duration strategies are an appealing choice, especially as we approach a higher rate environment.

  • With money market reform happening in 2016, we anticipate a change in dynamics for money market funds.
  • Unlike what we’ve seen in previous Fed tightening cycles, we do not expect money market yields to recalibrate higher as the Fed raises interest rates. They’re going to remain more subdued.
  • This means that investors will need to look beyond the confines of a typical money market mandate for yield opportunities.

More from PIMCO on Rates

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Rising Rates and Bonds

A short video offering basic education on what the fed funds rate is and how changes in the rate may impact bond investments.

PIMCO’s Outlook for Rates

Even amid a tighter policy environment, interest rates should remain historically low in the years ahead.

Rising Rates: Dispelling the Myth

A reasoned analysis that takes into account historical interest rates, the likely path of rates going forward and the impact of past interest rate rises on returns suggests that rising rates may not be such a threat to bond investors.

The Benefits of Active Management When Rates Are Rising

After nearly seven years of a near zero federal funds rate, investors are concerned about an eventual Fed rate hike and investing in the current environment. We discussed rising rates and the benefits of active management with PIMCO managing director Jim Moore.

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A word about risk: All investments are subject to risk and may lose value

Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. 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 for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without notice.

Forecasts, estimates and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Forecasts and estimates have certain inherent limitations, and unlike an actual performance record, do not reflect actual trading, liquidity constraints, fees, and/or other costs. In addition, references to future results should not be construed as an estimate or promise of results that a client portfolio may achieve.

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. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.