Tuesday, September 20, 2011
Pimco Offers a Response to Inflation
Reported by Neil Anderson, Managing Editor
Pimco [see profile]
now has another inflation hedging mutual fund to offer investors. Today the Newport Beach, California-based fixed income titan launched the Pimco Inflation Response Multi-Asset Fund
(PIRMX), PMed by managing director Mihir Worah
Dow Jones covered
"We believe that investors should always be prepared for the risk of rising inflation," Worah stated. "Traditional inflation hedges often don't provide an effective response to the wide-ranging drivers of inflation. The Pimco Inflation Response Multi-Asset Fund takes a comprehensive approach to arm investors with key inflation-sensitive assets and Pimco's real return expertise helps us determine how much of each asset to buy in any given environment."
The fund offers institutional shares for 80 basis points, P shares for 90 bps, administrative shares for 105 bps and D shares for 125 bps [see prospectus
]. Pimco handles the new fund's distribution, Boston Financial Data Services
handles transfer agency, Dechert
provides legal counsel, PricewaterhouseCoopers
offers independent accounting services, and State Street
Company Press Release
NEWPORT BEACH, CA--(September 20, 2011) - PIMCO, a leading global investment management firm, has launched the PIMCO Inflation Response Multi-Asset Fund for investors looking to hedge global inflation risks and take advantage of returns that inflation dynamics offer. The Inflation Response Multi-Asset Fund, which combines PIMCO's real return expertise and risk factor approach to asset allocation, is managed by Mihir Worah, a managing director in Newport Beach, California.
A long-term trend in rising commodity prices and weakening currencies of developed nations are stoking global inflation concerns. Yet many investors own assets that are not highly correlated to inflationary pressure. Furthermore, traditional inflation hedges are often limited in scope, which may be limiting in a multi-speed world.
The PIMCO Inflation Response Multi-Asset Fund uses a multi-asset approach to identify and hedge risk in the best way to protect against inflation and may even take advantage of it, by investing in a range of assets that might respond to different types of inflation, such as Treasury Inflation Protected Securities, commodities, emerging market currencies, real estate investment trusts and gold. PIMCO actively manages the asset allocation and underlying investments and incorporates tail risk hedging strategies intended to limit the impact of severe market shocks. These strategies are designed to protect against downside risk while positioning inflation-related assets to benefit from inflation dynamics. PIMCO defines tail risks as widespread, severe market declines.
"We believe that investors should always be prepared for the risk of rising inflation. In fact, although commodity prices have eased lately, we see them continuing to rise over the next few years," said Worah. "A weakening US dollar combined with what we see as the Federal Reserve's inflationary bias will also add to this longer-term inflation pressure."
Worah added: "Traditional inflation hedges often don't provide an effective response to the wide-ranging drivers of inflation. The PIMCO Inflation Response Multi-Asset Fund takes a comprehensive approach to arm investors with key inflation-sensitive assets and PIMCO's real return expertise helps us determine how much of each asset to buy in any given environment."
Institutional shares of the PIMCO Inflation Response Multi-Asset Fund will trade under the ticker symbol PIRMX. Additional tickers include "P" shares (PPRMX), "A" shares (PZRMX), "C" shares (PCRMX), "R" shares (PQRMX) and "D" shares (PDRMX).
PIMCO is a leading global investment management firm, with offices in 10 countries throughout North America, Europe and Asia. Founded in 1971, PIMCO offers a wide range of innovative solutions to help millions of investors worldwide meet their needs. Our goal is to provide attractive returns while maintaining a strong culture of risk management and long-term discipline. PIMCO is owned by Allianz Global Investors, a subsidiary of the Munich-based Allianz S.E., a leading global diversified financial services provider.
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 financial advisor or PIMCO representative, by visiting www.pimco.com/investments or by calling (888)87-PIMCO. Please read them carefully before you invest or send money.
A word about risk:
Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. 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. Currency rates may fluctuate significantly over short periods of time and may reduce the returns of a portfolio. 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. Treasury Inflation-Protected Securities (TIPS) are ILBs issued by the U.S. Government. 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. REITs are subject to risk, such as poor performance by the manager, adverse changes to tax laws or failure to qualify for tax-free pass-through of income. Commodities contain heightened risk including market, political, regulatory, and natural conditions, and may not be suitable for all investors. Bank loans are often less liquid than other types of debt instruments and general market and financial conditions may affect the prepayment of bank loans, as such the prepayments cannot be predicted with accuracy. There is no assurance that the liquidation of any collateral from a secured bank loan would satisfy the borrower's obligation, or that such collateral could be liquidated. Derivatives and commodity-linked derivatives may involve certain costs and risks such as liquidity, interest rate, market, c redit, management and the risk that a position could not be closed when most advantageous. Commodity-linked derivative instruments may involve additional costs and risks such as changes in commodity index volatility or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Investing in derivatives could lose more than the amount invested. 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. 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 of Pacific Investment Management Company LLC. ©2011, PIMCO.
PIMCO advised funds are distributed by PIMCO Investments LLC.
Except for the historical information and discussions contained herein, statements contained in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statement.
Stay ahead of the news ... Sign up for our email alerts now
Do You Recommend This Story?