PIMCO’s Real Return Practice Recognizing that inflation is a key risk factor for asset returns and that often their liabilities are in real (inflation-adjusted) terms, investors are increasingly cognizant of the need for inflation hedges. Investments in “real return” strategies provide an inflation hedge and can also offer important diversification for a portfolio.
PIMCO was an early leader in analyzing global ILB issues and in working with the U.S. Treasury Department prior to the introduction of the TIPS program in early 1997. PIMCO launched a dedicated TIPS strategy in the U.S. at the same time, and in 2003 launched the European-domiciled U.K. ILB strategy and the Global Real Return strategy.
Our ILB management includes dedicated ILB strategies and separately managed client portfolios with inflation-linked bond benchmarks, and also tactical allocations in client portfolios with conventional benchmarks. Separate real return portfolio offerings include short-maturity, long-maturity, regional, global and leveraged strategies. Our ILB exposures also include global ILB allocations in many client separate accounts. We are able to apply our relative value framework and institutional research capabilities across the global fixed income markets in an attempt to add value through the use of ILBs. This is for strategic applications in separate real return portfolios and for tactical applications in conventional debt portfolios.
We have committed substantial analytical resources to valuing global ILBs and to assessing relative values between ILBs and conventional debt. In our efforts to achieve value-added results, we actively apply the following strategies:
ILBs and commodities have displayed the characteristics of a distinct asset class:
These characteristics have provided opportunities for an improved efficient frontier.
Common portfolio risks and objectives may be actively and effectively managed using ILB investments:
Barclays Capital World Government Inflation-Linked Bond USD Hedged index that measures the performance of the major government inflation-linked bond markets. The Index includes inflationlinked debt issued by the following countries: Australia, Canada, France, Sweden, UK, & the United States. It is not possible to invest directly in an unmanaged index.
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.
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