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PIMCO Commodity Real Return Strategy
Investment Style
PIMCO manages commodity real return strategy by combining a position in commodity-linked derivative instruments backed primarily by a portfolio of inflation-indexed securities. This provides a Double RealTM response to inflation rates and changes in inflation. Other fixed income instruments may also be used tactically in the portfolio. The commodity-linked derivatives capture the price return of the commodity futures market, while our active management of the fixed income assets seeks to add incremental return above those markets, along with additional inflation hedging. If our active management of the fixed income portion of the portfolio outperforms, we generate an incremental return over the commodity markets. Commodity real return strategy combines the benefits of the commodity markets with the potential for additional real returns, at lower volatility of relative performance than is commonly associated with fully active commodity management styles.
Benchmark
Dow Jones-AIG Commodity Index
Portfolio Duration
Duration will vary based on PIMCO’s forecast for interest rates and under normal circumstances will be similar to the Lehman U.S. TIPS Index duration.
Market Sectors Utilized
Government, Corporate, Mortgage, Asset Backed, Money Market, Emerging Markets, Inflation Linked, Hedged International, Equities and Convertible Securities.
Value Added

Commodity real return seeks to add value through multiple sources including:

  • Active Short Duration Management
  • Credit Analysis (Risk Premiums)
  • Yield Management
  • Quantitative Research
  • Cost Efficient Trading
For more information, please go to the Contact Us page.

 

Singapore
PIMCO Asia Pte Ltd
30 Cecil Street #23-01
Prudential Tower
Singapore 049712
65-6538-9600

Regulated by the Monetary Authority of Singapore as a holder of a capital markets services license in fund management. The services and products provided by PIMCO Asia Pte Ltd relate to advisory accounts which are available only to accredited investors as defined in the Securities and Futures Act. The investment management services and products are not available to persons where provision of such services and products is unauthorized.

Each sector of the bond market entails risk. The guarantee on Treasuries & Government Bonds is to the timely repayment of principal and interest. Value of the units or shares in a fund is not guaranteed. Mortgage-backed securities & Corporate Bonds may be sensitive to interest rates. When interest rates rise the value of fixed income securities generally declines. There is no assurance that private guarantors or insurers will meet their obligations. Investing in non-U.S. securities may entail risk due to foreign economic and political developments and may be enhanced when investing in emerging markets. Money markets are not insured or guaranteed by FDIC or any other government agency and there can be no assurance that any money market will be able to maintain a net asset value of $1.00 per share. Inflation indexed bonds principal value adjusts to the rate of inflation. If the index measuring inflation rises or falls, the principal value of the inflation-indexed bonds will be adjusted accordingly, and consequently the interest payable on these securities will be influenced. Investing in convertibles may entail risk. The portfolios that invest in convertibles may have to convert before otherwise beneficial, which may have an adverse effect on the portfolios ability to achieve its investment objective.

Commodities are assets that have tangible properties, such as oil, metals, and agricultural products. Overall market movements and other factors affecting the value of a particular industry or commodity, such as weather, disease, embargoes, or political and regulatory developments, may affect the value of commodity-linked derivative instruments. Duration is a measure of a portfolios price sensitivity expressed in years. The Dow Jones AIG Commodity Index is composed of futures contracts on 20 physical commodities. It is not possible to invest in an unmanaged index.

Past performance is no guarantee of future results. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission.

Copyright 2004, PIMCO


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