PIMCO – Media Relations
PIMCO To Launch Global Advantage Inflation-Linked Bond Strategy Fund
ETF with actively managed global inflation-linked bonds using a GDP-based investment approach
NEWPORT BEACH, CALIFORNIA (April 24, 2012) -- PIMCO, a leading global investment management firm, is listing on May 1 the Global Advantage Inflation-Linked Bond Strategy Fund (Ticker: ILB), which is designed to offer investors the potential for long-term returns above inflation by actively managing global inflation-linked bonds and currencies via the accessible and transparent ETF vehicle. The fund is managed by Mihir Worah, managing director and head of PIMCO’s real return portfolio management team.
ILB continues the expansion of PIMCO’s range of actively managed ETFs, which combine PIMCO’s time-tested global investment process and expertise in managing global fixed income with the tradability of an ETF vehicle, providing investors intraday pricing and daily portfolio disclosures in a single share class.
PIMCO believes globalization exposes investors to price pressures and growth patterns of countries around the world, creating a need for a fuller set of inflation-oriented investments. ILB uses global inflation-linked bonds and currencies to help diversify investors’ inflation protection strategies. Importantly, it will also be actively managed against a gross domestic product (GDP)-weighted benchmark,* with the intent to better align investors’ exposure to countries experiencing stronger growth. This is in contrast to traditional market-cap weighted benchmarks, which allocate relative to the inflation-linked bond issuance of each country.
“In this uncertain global economy, some of the key drivers of growth are developing economies, which are often more sensitive to inflationary pressures like commodity prices,” said Mr. Worah. “Our forward-looking Global Advantage approach aims to expose investors to the inflation-linked bonds and currencies of these faster-growing economies, potentially resulting in higher real yields than traditional investing using market cap-weighting.”
PIMCO is one of the world’s largest and most experienced managers of inflation-linked bonds, with a demonstrated, disciplined approach that combines global resources, expertise and bottom-up research with an investment process geared towards forecasting the global growth and inflationary trends, an essential element of inflation-linked bond investing. PIMCO manages more than $100 billion in dedicated inflation hedging strategies.
The Global Advantage Inflation-Linked Bond Strategy Fund will start trading on May 1 on the NYSE under the ticker ILB.
*The Fund’s primary benchmark index is the Barclays Capital Universal Government Inflation-Linked Bond Index. The Fund’s secondary benchmark index is the PIMCO Global Advantage Inflation-Linked Bond Index. The Fund believes that the secondary benchmark reflects the Fund’s investment strategy more accurately than the primary benchmark.
PIMCO is a leading global investment management firm, with offices in 11 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 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, which may be obtained by contacting your PIMCO representative. Please read the prospectus carefully before you invest or send money.
Exchange Traded Funds (“ETF”) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or “baskets” of shares. Shares of an ETF are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF’s prospectus.
A word about risk: Past performance is not a guarantee or reliable indicator of future results. Investing in the bond market is subject to certain risks including the risk that fixed income securities will decline in value because of changes in interest rates; the risk that fund shares could trade at prices other than the net asset value; and the risk that the manager's investment decisions might not produce the desired results. 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. 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. 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. 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. The Fund is non-diversified, which means that it may invest its assets in a smaller number of issuers than a diversified fund. 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.
The value of fixed income securities contained in the fund can be impacted by changes in interest rates. Bonds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise.
Foreign (non-U.S.) fixed income securities will settle in accordance with the normal rules of settlement in the applicable foreign (non-U.S.) market. Foreign holidays that may impact a foreign market may extend the period of time between the date of receipt of a redemption order and the redemption settlement date. Please see the Funds Statement of Additional Information at www.pimcoetfs.com
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.