An overview of PIMCO’s short-term bond strategy, which is designed to improve on the return potential provided by a typical money market vehicle, with modest additional risk.
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PIMCO’s Short-Term Strategy is designed to improve on the return provided by a typical money market vehicle. The Short-Term Strategy seeks to maximize current income while preserving capital and providing daily liquidity by investing in money market and short maturity fixed income securities. It differs from traditional money market strategies because it invests in longer maturities and a broader opportunity set of securities which may generate excess relative returns with only a modest increase in risk compared to traditional money market instruments.
The PIMCO Short-Term strategy seeks to generate a high level of current income, liquidity, and preservation of principal by investing in high quality, short-term securities. The Short-Term strategy benefits from our unique capabilities in economic forecasting, Federal Reserve Bank knowledge, and fixed income trading.
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 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 the current low interest rate environment increases this risk. Current 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. A Collateralized Mortgage Obligation (CMO) is a multi-class debt instrument backed by a pool of mortgage pass-through securities or mortgage loans. Investments in CMOs may involve a high degree of risk. 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. 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. 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. 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 this investment strategy will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest for a long-term especially during periods of downturn in the market. Diversification does not ensure against loss. Investors should consult their investment professional prior to making an investment decision.
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.
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