Text on screen: PIMCO
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Text on screen: Marc P. Seidner, CIO Non-traditional Strategies
MARC SEIDNER: Active management of fixed income portfolios gives investors consistent opportunities to earn high levels of income and compound growth.
FULL PAGE GRAPHIC – CHART TITLE: Attractive yields create foundation for active fixed income opportunities
On the left is a bar chart labeled “Starting yields and realized returns in last 3 years, percent.” Three vertical bars are shown. The first bar, labeled “Starting yield,” totals 5.13 percent. The second bar, labeled “Realized 3‑year annualized return,” totals 5.41 percent. The third bar, labeled “Realized 3‑year cumulative return,” totals 17.14 percent. The bars are color‑coded to compare the Bloomberg U.S. Aggregate Index and PIMCO Total Return.
On the right is a line chart titled “Yield to Maturity, percent,” showing yields over time from March 2020 through March 2026. The blue line starts near 4.5 percent in 2020 and ends at 6.41 today. The green line starts near 2 percent in 202 and end at 4.68 today.”
At the bottom of the slide is a table showing historical performance after fees for the PIMCO Total Return Fund and the Bloomberg U.S. Aggregate Index across multiple time periods, including 10‑year, 5‑year, 3‑year, and 1‑year returns.
The starting point of yield for PIMCO's total return fund is 6.5%, which compares quite favorably to the yield of the aggregate index, which is about four and a half percent.
And valuations look quite a bit more attractive in fixed income markets than they do in equity markets and even in cash, the yield on cash is coming down.
We know that there's $8 trillion sitting in money market accounts, and the opportunity to lock in this attractive starting point of yield is extraordinarily compelling.
How do we structure a 6.5% yielding portfolio, high quality liquid intermediate duration portfolio?
Text on screen: Areas of opportunity: Emerging markets
Images on screen: Brazil, South Africa
In addition to that starting point of yield, emerging markets look very compelling to us today.
It's rare, but we're at a moment now where emerging market inflation is actually lower than developed market inflation, yet investors are still being afforded an attractive entry point of real yield, much higher real yield in emerging markets than they are in developed markets with another segments of the marketplace,
Text on screen: Areas of opportunity: Agency mortgage-backed securities
Images on screen: Residential neighborhood
agency mortgage-backed securities look incredibly compelling to us.
They have for quite some time now, they look even better today, starting point of five plus percent yields for high quality, very liquid securities in a world of three and a half, maybe going down to 3% cash rates, seems like a very good opportunity.
Text on screen: Areas of opportunity: Currencies
Images on screen: Japanese yen
Add in a little bit of currency exposure, add in a little bit of other well structured
Text on screen: Areas of opportunity: Securitized assets
Images on screen: Credit card purchases
high quality liquid securitized or asset backed exposure. And you end up with a portfolio that is attractive in yield, high quality and liquid, and gives investors an opportunity to lock in these elevated levels of yields and potentially outperform cash and continue to compound at very attractive rates of return.
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Disclosure
IMPORTANT NOTICE:
Please note that the following contains the opinions of the manager as of the date noted and may not have been updated to reflect real time market developments. All opinions are subject to change without notice.
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. Encourage your clients to read them carefully.
Past performance is not a guarantee or a reliable indicator of future results.
Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other PIMCO-advised Fund, including those with a similar name, investment objective or policies. A new or smaller Fund’s performance may not represent how the Fund is expected to or may perform in the long-term. New Funds have limited operating histories for investors to evaluate and new and smaller Funds may not attract sufficient assets to achieve investment and trading efficiencies. A Fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the Fund otherwise would not seek to do so, which may adversely affect performance.
It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the fund may not issue a Section 19 Notice in situations where the fund’s financial statements prepared later and in accordance with U.S. GAAP and/or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please see the fund’s most recent shareholder report for more details.
Although the Fund may seek to maintain stable distributions, the Fund’s distribution rates may be affected by numerous factors, including but not limited to changes in realized and projected market returns, fluctuations in market interest rates, Fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the Fund’s distribution rate or that the rate will be sustainable in the future.
For instance, during periods of low or declining interest rates, the Fund’s distributable income and dividend levels may decline for many reasons. For example, the Fund may have to deploy uninvested assets (whether from purchases of Fund shares, proceeds from matured, traded or called debt obligations or other sources) in new, lower yielding instruments. Additionally, payments from certain instruments that may be held by the Fund (such as variable and floating rate securities) may be negatively impacted by declining interest rates, which may also lead to a decline in the Fund’s distributable income and dividend levels.
Different fund types (e.g. ETFs, open-ended investment companies) and fund share classes are subject to different fees and expenses (which may affect performance). They may also have different minimum investment requirements and be entitled to different services.
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. 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. 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. 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.
Please refer to the Fund’s prospectus for a complete overview of the primary risks associated with the Fund.
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 appropriate 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.
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 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. PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world. ©2026, PIMCO.
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CMR2026-0409-5381735