PIMCO Investments LLC
Managed Accounts
Managed Accounts

PIMCO Total Return

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Strategy Overview

Highlights

  • A true core bond strategy focusing on high-quality intermediate-term bonds and aiming to avoid concentrated risk exposure.

  • Employs a variety of value-added strategies across the global bond markets to increase total return potential and reduce overall risk.

  • Has sought consistent, solid results in both up and down markets.

  • Use of a PIMCO managed commingled fund within the portfolio allows for greater diversification potential than smaller separate accounts could otherwise achieve.

  • Pursues maximum total return—income plus capital appreciation—an approach pioneered by PIMCO over 40 years ago.

Process & Philosophy

Total Return Philosophy

PIMCO differentiates itself from many managers by taking a total return approach to bond management. Rather than seek only income, PIMCO pursues maximum total return – income plus capital appreciation. PIMCO pioneered this philosophy 40 years ago, and it has been critical to the firm's long-term performance record. Our Total Return philosophy is founded on the principle of diversification. We believe that no single strategy should dominate returns. By relying on multiple sources of value that arise from a diversified portfolio, we seek to generate a solid, consistent track record. 
 

Investment Process

Our investment process utilizes both “top-down” and “bottom-up” strategies. Top-down strategies focus on duration, yield curve positioning, volatility, and sector rotation. These strategies are deployed from a macro view of the portfolio driven by our secular outlook of the forces likely to influence the economy and financial markets over the next three to five years and our cyclical views of two- to four-quarter trends. Implementation in portfolios is effected by selecting securities that achieve the designated objectives. Bottom-up strategies drive our security selection process and facilitate the identification and analysis of undervalued securities. Here, we employ advanced proprietary analytics and expertise in all major fixed-income sectors. The objective is to combine perspectives from both the portfolio and security levels to consistently add value over time within acceptable levels of portfolio risk.
 

Portfolio Construction

PIMCO Total Return managed account portfolios are constructed with three components: a core segment of individual bonds, and two sector-oriented PIMCO-managed commingled vehicles. The core segment normally represents 55–100% of the overall portfolio and focuses on liquid bonds of the highest credit quality. The commingled vehicles together represent 0% to normally no more than 45% of the portfolio and invest in specialized areas of the bond market. This innovative structure allows smaller managed account portfolios the flexibility to invest across all sectors of the bond market on a cost-effective basis.

Managers

Curtis Mewbourne

Mr. Mewbourne is a managing director and head of portfolio management in the New York office. He manages institutional accounts and mutual funds across a wide range of strategies. Prior to joining PIMCO in 1999, he was a bond trader at Salomon Brothers and at Lehman Brothers. He has 21 years of trading and portfolio management experience and holds an engineering degree in computer science from the University of Pennsylvania.

Nishant Upadhyay

Mr. Upadhyay is a senior vice president and portfolio manager in the New York office, focusing on the Diversified Income strategy, which invests in emerging markets, high yield and investment grade credits. Prior to joining PIMCO in 2004, he was a relationship manager in the corporate and investment banking division at Citigroup. Prior to that, he was a precious metals trader at ABN AMRO. He has 14 years of investment experience and holds an MBA from the Indian Institute of Management. He has an undergraduate degree from the University of Delhi.

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 suitable for all investors. Financial professionals seeking more information should contact their managed accounts department or call their PIMCO representative.

The Managed Accounts strategy consists of individual securities and a select combination of proprietary, commingled vehicles. These vehicles are available only through managed accounts utilizing the Managed Accounts strategy and are available by prospectus only.

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 certain risks including market, interest-rate, issuer, credit, and inflation risk; 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. 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.

The value of most bond funds and fixed income securities are impacted by changes in interest rates. Bonds and bond funds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise.

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.

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, 800-387-4626. ©2015, PIMCO