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UK StocksPLUS
Investment Style
UK StocksPLUS is a unique equity strategy which offers the potential for consistent excess returns over the FTSE 100 while maintaining a very similar risk profile to that of the index. PIMCO manages UK StocksPLUS by combining a non-leveraged position in synthetic FTSE 100 Index instruments (primarily Index futures and sometimes Index swaps) with a short duration fixed income portfolio. The synthetic FTSE 100 Index instruments capture the returns of the Index, while our active management of the short duration fixed income assets seeks to add incremental return above the Index. Because the FTSE 100 futures contracts are priced such that a combination of futures and money market investments should produce a return equal to that of the FTSE 100 index, our active management of the short duration assets seeks to outperform money market rates, thereby generating an incremental return over the FTSE 100. Sometimes referred to as an enhanced index strategy, UK StocksPLUS combines the benefits of index fund management with the potential for excess returns, at lower volatility of relative performance (tracking error) than is commonly associated with fully active equity management styles.
Benchmark
FTSE Index
Portfolio Duration
Duration is not expected to normally exceed one year.
Market Sectors Utilized
Large Cap Equity backed by a diversified, short-term bond portfolio
Value Added
UK StocksPLUS seeks to add value above the equity index by outperforming the money market based financing rate associated with equity futures and swaps. The sources of value added stem from a longer term horizon of institutional equity investors relative to the short-term, money marke rate. Key sources of value add include:

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

 

 


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