Core Intermediate Managed Account
Investment Process
PIMCO is committed to active bond management within a long-term framework. Our investment process begins with our annual Secular Forum, where we develop our three- to five-year outlook for the global economy, inflation and interest rates. Through our quarterly cyclical forums, we assess the more short-term trends – those in the next 6 to 12 months – within our long-term outlook.
The investment forums help guide exposures in portfolios to specific factors, including interest rate sensitivity and credit risk. Rigorous bottom-up analysis, using advanced proprietary tools and the firm’s expertise across fixed income markets, drives the security selection process and facilitates the identification and analysis of undervalued securities.
The objective is to combine perspectives at both the portfolio and security levels to consistently add value over time with prudent acceptable levels of portfolio risk.
Portfolio Construction
PIMCO Core Intermediate Managed Account focuses on high quality and intermediate-term bonds across a range of fixed income markets U.S. government, including its agencies and instrumentalities, U.S. agency mortgage-backed securities, and investment grade corporate credit.
The managed account portfolio will consist of:
- Physical cash bonds denominated in U.S. dollar (USD).
- Minimum Average Portfolio Quality of A-, and Minimum Issue Quality of BBB-.
- The managed account’s average duration will normally reside within a range of 3-8 years, and can vary depending on PIMCO’s outlook for interest rates, the economy, and other fixed income related risk factors.
Emphasizes diversification – aiming to avoid concentrated risk exposures – in an effort to source yield from a diversified mix of securities that span the most liquid segments of the bond market.
Disclosures
The managed account strategies described in this material are offered by Pacific Investment Management Company LLC and are available exclusively through financial professionals. Managed accounts have a minimum asset level and may not be appropriate for all investors. Financial professionals seeking more information should contact their managed accounts department or call their PIMCO representative.
Past performance is not a guarantee or a reliable indicator of future results.
Individual account holdings will vary depending on the size of an account, cash flows and account restrictions. Portfolio holdings are subject to change daily without notice. At any time an individual account managed in this strategy may or may not include securities held by another portfolio. Consequently, any particular account may have portfolio characteristics and performance that differ from another individual account in this strategy.
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 low interest rate environments increase this risk. 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. 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. 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. Floating rate loans are not traded on an exchange and are subject to significant credit, valuation and liquidity risk. 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. 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.
The credit quality of a particular security or group of securities does not ensure the stability or safety of the overall portfolio.
PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. 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. 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.
Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660 is regulated by the U.S. Securities and Exchange Commission. PIMCO is a trademark of Allianz Asset. Management of America LLC in the United States and throughout the world. ©2024, PIMCO.
CMR2023-0828-3085636