What is Fundamental Index StocksPLUS?
PIMCO’s Fundamental Index StocksPLUSTM Strategies are an innovative approach to equity investing that aim to offer investors persistent, material outperformance over equity benchmarks, with index-like risk. There is growing awareness that traditional price-based equity benchmarks are flawed because they over-emphasise the most popular and most overvalued stocks, exposing investors to structural drags on performance. PIMCO’s Fundamental Index StocksPLUSTM Strategies are an alternative approach that avoids this pitfall. Rather than relying on traditional-price based indexes, it draws on a smarter approach that weights equities according to fundamentals. On top of this, it incorporates PIMCO’s unique StocksPLUSTM approach which provides a second source of potential excess return.
The Fundamental Index StocksPLUSTM Strategies are available in U.S. large company, global and emerging markets equity versions.
The Fundamental Index StocksPLUSTM Strategy draws on this core StocksPLUSTM methodology and combines it with a “smarter” fundamentals-based equity market exposure in the form of the Enhanced Research Affiliates Fundamental Index strategy (Enhanced RAFI®). Enhanced RAFI® aims to avoid structural inefficiencies in traditional equity benchmarks by weighting companies by fundamental factors – including sales, cash flows, dividends and book value, with additional screens for quality of earnings, financial distress and other parameters – in an effort to enhance returns. Traditional indexes, in contrast, weight companies by their market capitalization (outstanding shares times current price). By removing price from the index-construction process, Enhanced RAFI® attempts to eliminate the long-term performance drag caused by the systematic overweighting of overpriced stocks and underweighting of underpriced stocks – an inherent shortcoming of cap-weighted indexes. The result is a strategy that harnesses two distinct sources of alpha to seek to generate material outperformance over traditional cap-weighted equity benchmarks without significantly increasing its overall risk profile.
Past performance is not a guarantee or a reliable indicator of future results. Investing in the bond market is subject to certain risks that fixed income securities will decline in value because of changes in interest rates, and the risk that the manager’s investment decisions might not produce the desired results. 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. 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 rates, 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. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Diversification does not ensure against loss.
There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Outlook and strategies are subject to change without notice. Portfolio structure is subject to change without notice and may not be representative of current or future allocations.
PIMCO Europe Ltd (Company No. 2604517), PIMCO Europe, Ltd Munich Branch (Company No. 157591), PIMCO Europe, Ltd Amsterdam Branch (Company No. 24319743), and PIMCO Europe Ltd - Italy (Company No. 07533910969) are authorised and regulated by the Financial Conduct Authority (25 The North Colonnade, Canary Wharf, London E14 5HS) in the UK. The Amsterdam, Italy and Munich Branches are additionally regulated by the AFM, CONSOB in accordance with Article 27 of the Italian Consolidated Financial Act, and BaFin in accordance with Section 53b of the German Banking Act, respectively. PIMCO Europe Ltd services and products are available only to professional clients as defined in the Financial Services Authority’s Handbook and are not available to individual investors, who should not rely on this communication. | PIMCO Deutschland GmbH (Company No. 192083, Seidlstr. 24-24a, 80335 Munich, Germany) is authorised and regulated by the German Federal Financial Supervisory Authority (BaFin) (Marie- Curie-Str. 24-28, 60439 Frankfurt am Main) in Germany in accordance with Section 32 of the German Banking Act (KWG). The services and products provided by PIMCO Deutschland GmbH are available only to professional clients as defined in Section 31a para. 2 German Securities Trading Act (WpHG). They are not available to individual investors, who should not rely on this communication.
The information on this web site is for residents of Europe only.
All material contained on the Exchange-Traded Funds section of this website is purely for informational purposes only and is not intended as investment advice. Investors should seek financial advice before making any investment decisions.
The products and services are available only to residents of those jurisdictions. The information on this web site does not constitute an offer for products or services, or a solicitation of an offer to any persons outside of Europe who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence. Copyright ©2017 PIMCO Europe Limited. All rights reserved.
Are you sure you would like to leave?
You are currently running an old version of IE, please upgrade for better performance.